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> There is something fundamentally wrong with taxing an absence of income I disagree; in fact, I believe the opposite - that income is taxed way too much, simp
by tomp 11y ago
> There is something fundamentally wrong with taxing an absence of income
I disagree; in fact, I believe the opposite - that income is taxed way too much, simply because it's an easy target - "Look at those rich people drawing a huge salary!" In reality, people who have big salary are almost always not really rich - they are still employed by someone else, they can be fired at any time, and they don't own productive assets.
In an ideal world, ownership of assets would be taxed way more than it's now, or e.g. income tax (all income, including capital gains and dividends) would be proportional to your current assets, not just your income (i.e. if a millionaire earns $1, s/he would pay e.g. 80% tax, while a poor student would pay 0%).
- cm2187 11y agoI fully support the concept of a flat tax on salaries, dividends and capital gains, but again all of these are realised income, ie you received cash, you can pay some away in taxes. But if you own a painting and this painting increases in value, this is not an income until you sell it. There shouldn't be a tax on "non income".
- lmm 11y agoThis notion of "realising" income is what drives a lot of complexity and abuses in the American tax system (e.g. companies doing stock buybacks when it would be more efficient to pay dividends, except they're taxed differently). If income were as simple as "net worth at end of year - net worth at end of last year" that could remove a lot of that. (Bonus: income which goes back to society via consumption doesn't count, and so there's a natural progressiveness to this model: the money that you spend on living this year isn't taxed, only what you gained on top of that). If your painting increases in value that's an indication that the amount of value that that painting could generate for the rest of society has increased, therefore the incentives should encourage you to sell it, not discourage you from doing so.
- eru 11y agoOf course, accessing the value of your painting is hard without a sale. Unless you require people to voluntarily put a price tag on all their paintings (and other assets) at which they'd be forced to sell to any comer.
- lmm 11y agoPeople with expensive paintings have them valued all the time for insurance purposes. I'm sure a truly dedicated fraudster would find a way, but it raises the cost of tax evasion even if it doesn't eliminate it entirely.