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If you really want to prevent tax evasion then start taxing assets. You can’t really hide assets (excluding a few minor ones like diamonds, but these are a tiny

If you really want to prevent tax evasion then start taxing assets. You can’t really hide assets (excluding a few minor ones like diamonds, but these are a tiny fraction of all assets). If you tax assets like land, shares, buildings, mines, vehicles, bank accounts, gold, etc, then evasion is not possible and the useless wealthy that inherited (rather than created) the assets will start paying tax.

stevenmays 10y ago
Taxing assets will have a negative effect on the savings rate. Countries with higher savings rates are usually net exporters. And high savings rates are good because people usually need less services if they've saved.
- danieltillett 10y ago
  We have interest rates at record lows and a risk of deflation. There is way too much asset holding and too little consumption. Taxing assets more (and taxing production less) will result in few people holding onto assets that could be more productively used by others people. We want to get our limited resources into the hands of the people that can make the most of the assets.
cynicalkane 10y ago
You're commenting on an article about how easy it is to hide assets overseas, and you're telling me it's hard to hide assets?
- danieltillett 10y ago
  The assets are not really overseas - just their supposed intermediate owner is. Almost all the assets are physically located in the major western countries. My suggestion is tax the assets directly. Don’t tax their owner, just have the asset itself owe the tax. For example, if you have a building and land then $x dollars in tax are due each year by the land and building. You don’t then have to worry about who owns the asset or if the ultimate owner is on or offshore. Of course proposing such a suggestion is a great way to have the shortest career in politics possible. The mega wealthy are fully aware that if this idea ever gained traction they would be history - good thing I never plan to run for office :)
  - chii 10y ago
    How can an inanimate object owe tax? You'll have to eventually find the owner
    - evgen 10y ago
      We don't care who the owner is, just that the tax is paid. If a taxable object does not have its taxes paid the state declares it in arrears and siezes/sells the asset to pay the tax. Problem solved.
  - ddebernardy 10y ago
    FYI such a tax exists in France already: https://en.wikipedia.org/wiki/Solidarity_tax_on_wealth https://en.wikipedia.org/wiki/Solidarity_tax_on_wealth A purported merit is that it should desensitize to sit on real-estate assets. It also comes with the twist that you can get a rebate by investing in privately owned SMBs. Methinks that if you deploy that large scale you'd end up fueling tech-bubbles.
    - danieltillett 10y ago
      At least investing in small and medium sized businesses would be a productive use of capital compared to just being a wealthy landowner.
milesf 10y ago
Welcome to Canada :) Oh, and we're taxed on income as well. I think something like 44% of everything I earn goes to taxes.
- danieltillett 10y ago
  I could be wrong, but I was unaware that Canada had a straight asset tax on all assets. How does it work?
  - PDoyle 10y ago
    It doesn't. Not sure what that guy's talking about.
  - milesf 10y ago
    In Canada, it's easier to list what is not taxed rather than what is. You do not pay taxes on: - any GST/HST credit or Canada Child Tax Benefit payments, as well as those from related provincial and territorial programs. - child assistance payments and the supplement for handicapped children paid by the province of Quebec. - most amounts received from a Tax Free Savings Account (TFSA) - compensation received from a province or territory if you were a victim of a criminal act or a motor vehicle accident. - lottery winnings. - most gifts and inheritances. - amounts paid by Canada or an ally (if the amount is not taxable in that country) for disability or death due to war service. - most amounts received from a life insurance policy following someone’s death. - most payments of the type commonly referred to as “strike pay” you received from your union, even if you perform picketing duties as a requirement of membership. Barring those items, anything else you acquire including necessities like food, medicine, clothing, and shelter all have taxes on them. Some will argue that this is not a direct tax on assets, but whether it's indirect or direct it's still the government taking more.
dredmorbius 10y ago
Show me a breakdown of total US wealth by asset class. I suspect much of that's going to be in intermediate or structured classes, to wit: corporate structures. Not merely land / building / plant / stock, but corporate entities themselves. But seeing that spelled out might suggest the feasibility of your suggestion. It is interesting.
- danieltillett 10y ago
  You can of course tax shares just like any other asset. Anything that can’t be hidden can be taxed :) Don’t quote me on this, but as far as I am aware the major asset class in the USA is land and improvements. Rather hard to hide either of these :)
  - dredmorbius 10y ago
    I'm specifically interested in the breakdown. David Brin has been noodling along these lines for a while as well.

stevenmays 10y ago

Taxing assets will have a negative effect on the savings rate. Countries with higher savings rates are usually net exporters. And high savings rates are good because people usually need less services if they've saved.

danieltillett 10y ago
We have interest rates at record lows and a risk of deflation. There is way too much asset holding and too little consumption. Taxing assets more (and taxing production less) will result in few people holding onto assets that could be more productively used by others people. We want to get our limited resources into the hands of the people that can make the most of the assets.

cynicalkane 10y ago

You're commenting on an article about how easy it is to hide assets overseas, and you're telling me it's hard to hide assets?

danieltillett 10y ago
The assets are not really overseas - just their supposed intermediate owner is. Almost all the assets are physically located in the major western countries. My suggestion is tax the assets directly. Don’t tax their owner, just have the asset itself owe the tax. For example, if you have a building and land then $x dollars in tax are due each year by the land and building. You don’t then have to worry about who owns the asset or if the ultimate owner is on or offshore. Of course proposing such a suggestion is a great way to have the shortest career in politics possible. The mega wealthy are fully aware that if this idea ever gained traction they would be history - good thing I never plan to run for office :)
- chii 10y ago
  How can an inanimate object owe tax? You'll have to eventually find the owner
  - evgen 10y ago
    We don't care who the owner is, just that the tax is paid. If a taxable object does not have its taxes paid the state declares it in arrears and siezes/sells the asset to pay the tax. Problem solved.
- ddebernardy 10y ago
  FYI such a tax exists in France already: https://en.wikipedia.org/wiki/Solidarity_tax_on_wealth https://en.wikipedia.org/wiki/Solidarity_tax_on_wealth A purported merit is that it should desensitize to sit on real-estate assets. It also comes with the twist that you can get a rebate by investing in privately owned SMBs. Methinks that if you deploy that large scale you'd end up fueling tech-bubbles.
  - danieltillett 10y ago
    At least investing in small and medium sized businesses would be a productive use of capital compared to just being a wealthy landowner.

milesf 10y ago

Welcome to Canada :) Oh, and we're taxed on income as well. I think something like 44% of everything I earn goes to taxes.

danieltillett 10y ago
I could be wrong, but I was unaware that Canada had a straight asset tax on all assets. How does it work?
- PDoyle 10y ago
  It doesn't. Not sure what that guy's talking about.
- milesf 10y ago
  In Canada, it's easier to list what is not taxed rather than what is. You do not pay taxes on: - any GST/HST credit or Canada Child Tax Benefit payments, as well as those from related provincial and territorial programs. - child assistance payments and the supplement for handicapped children paid by the province of Quebec. - most amounts received from a Tax Free Savings Account (TFSA) - compensation received from a province or territory if you were a victim of a criminal act or a motor vehicle accident. - lottery winnings. - most gifts and inheritances. - amounts paid by Canada or an ally (if the amount is not taxable in that country) for disability or death due to war service. - most amounts received from a life insurance policy following someone’s death. - most payments of the type commonly referred to as “strike pay” you received from your union, even if you perform picketing duties as a requirement of membership. Barring those items, anything else you acquire including necessities like food, medicine, clothing, and shelter all have taxes on them. Some will argue that this is not a direct tax on assets, but whether it's indirect or direct it's still the government taking more.

dredmorbius 10y ago

Show me a breakdown of total US wealth by asset class. I suspect much of that's going to be in intermediate or structured classes, to wit: corporate structures. Not merely land / building / plant / stock, but corporate entities themselves. But seeing that spelled out might suggest the feasibility of your suggestion. It is interesting.

danieltillett 10y ago
You can of course tax shares just like any other asset. Anything that can’t be hidden can be taxed :) Don’t quote me on this, but as far as I am aware the major asset class in the USA is land and improvements. Rather hard to hide either of these :)
- dredmorbius 10y ago
  I'm specifically interested in the breakdown. David Brin has been noodling along these lines for a while as well.