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I agree, but how would we enforce a wealth tax? Seems like it'd be really easy for rich people to hide their money in assets. What about just printing money? N

I agree, but how would we enforce a wealth tax? Seems like it'd be really easy for rich people to hide their money in assets. What about just printing money? Not ideal obviously, but there'd be no way to avoid the inflation "tax".

conanbatt 9y ago
There are many ways to protect yourself from inflation. And inflation has also devastating consequences to all assets and incomes.
aceon48 9y ago
Inflation harms wage earners farrrr more than capital holders. Capital holders can put it into assets that rise with inflation. IMO it's one of the driving factors of inequality of the past few decades. Those with capital / assets can leverage up, borrow more money, and then pay it back with lesser inflated dollars.
- JamesBarney 9y ago
  Unexpected inflation moves money from people with nominal assets to people with nominal debts. Basically the very rich(who hold most nominal assets like bonds) to everyone who has a mortgage. Also the IMF's stance on inflation and inequality is moving from hyperinflation to sustainable inflation leads to reduced inequality but there aren't advantages to moving to a lower inflation than that.
duality 9y ago
Avoiding inflation due to printing more cash would look like not holding cash. Your proposal would tax people whose lives involve mostly currency, not other assets. I think it would actually have the opposite of the effect you intend.
zanny 9y ago
You can do a wealth tax by targeting the big ticket items. Rather than invade everyone's home with tax collectors to guesstimate how much every couch cushion you have is worth, you can hit probably 98% of wealth by just taxing the calculated value of owned land and buildings (which is already being appraised for property taxes in most states) and stocks, bonds, and options. So we already invade your privacy to appraise the former, and the later has to be be public because companies need to know who owns what shares and the trading platforms need to associate users to shares they own. Both can be used by government to provide ownership details. You would also want to wealth tax companies for total global cash-on-hand assets they have as well. Those are also required to be public record already. That way private business executives cannot tax haven their own stuff under an LLC, and companies like Google / FB are punished for hoarding hundreds of billions in offshore accounts they have no intent to spend or bring back into the states. Of course, this is all saying "government should do X" which is just for entertainment, pretty much. The US is in no condition to act in the will of the people at all right now anyway, so its all speculation - you would have to fix the broken democracy first.
- pjmorris 9y ago
  > you can hit probably 98% of wealth by just taxing the calculated value of owned land and buildings (which is already being appraised for property taxes in most states) Henry George proposed this in the 1800's [0] [0] https://en.wikipedia.org/wiki/Georgism https://en.wikipedia.org/wiki/Georgism
  - dredmorbius 9y ago
    And David Ricardo prior to him (George credits Ricardo lavishly, though I seldom see this mentioned).
    - conanbatt 9y ago
      And Milton Friedman after both of those
- flyinglizard 9y ago
  Once you start targeting public market holdings, it would just create an even stronger incentive for companies to remain private. Soon enough you'd have secondary markets for high rollers dealing in shares of private entities, which would be completely inaccessible to the average Joe - and congratulations, you've increased inequality. In fact, this is already the situation in technology investments to a large extent. Companies remain private for longer to avoid post IPO regulations and restrictions, and the only guys who can invest are the insiders who get the opportunity through their network. The companies are only pumped to the public when the ascent in value has pretty much diminished (SNAP, anyone?).
- sokoloff 9y ago
  > You would also want to wealth tax companies for total global cash-on-hand assets they have as well. Those are also required to be public record already. I'm not familiar with this being a requirement for foreign, private companies. (Reading between the lines, I'd expect a marked increase in investments in foreign, private companies under such a taxation scheme.)
mamon 9y ago
For starters you could just swap the tax rates: make income tax of 15% and capital gains tax of 35%.
- dlp211 9y ago
  That is such a simplification of income tax though. For example a family of 4 making $50k/yr pays about $40 in federal income taxes. If that same family make $75k it goes up to about $2500. Both of those as a percentage of income are far below 15%. Hell, I made more than the SS max last year and my effective tax rate was below 15%. See Mike Pence as another example, guy made over $100k and had an effective rate of something like 12%.
barrkel 9y ago
Most wealthy people don't keep their wealth in currency. Profit generating entities keep on generating profit even with inflation - input prices go up but so do sale prices. Inflation had a bigger affect when it changes, rather than when it is staying steady. If anything a higher inflation rate would mostly hurt homeowners because prices would be less supported by cheaper money.
cakedoggie 9y ago
> Not ideal obviously, but there'd be no way to avoid the inflation "tax". Buying property?

conanbatt 9y ago

There are many ways to protect yourself from inflation. And inflation has also devastating consequences to all assets and incomes.

aceon48 9y ago

Inflation harms wage earners farrrr more than capital holders. Capital holders can put it into assets that rise with inflation. IMO it's one of the driving factors of inequality of the past few decades. Those with capital / assets can leverage up, borrow more money, and then pay it back with lesser inflated dollars.

JamesBarney 9y ago
Unexpected inflation moves money from people with nominal assets to people with nominal debts. Basically the very rich(who hold most nominal assets like bonds) to everyone who has a mortgage. Also the IMF's stance on inflation and inequality is moving from hyperinflation to sustainable inflation leads to reduced inequality but there aren't advantages to moving to a lower inflation than that.

duality 9y ago

Avoiding inflation due to printing more cash would look like not holding cash. Your proposal would tax people whose lives involve mostly currency, not other assets. I think it would actually have the opposite of the effect you intend.

zanny 9y ago

You can do a wealth tax by targeting the big ticket items. Rather than invade everyone's home with tax collectors to guesstimate how much every couch cushion you have is worth, you can hit probably 98% of wealth by just taxing the calculated value of owned land and buildings (which is already being appraised for property taxes in most states) and stocks, bonds, and options. So we already invade your privacy to appraise the former, and the later has to be be public because companies need to know who owns what shares and the trading platforms need to associate users to shares they own. Both can be used by government to provide ownership details. You would also want to wealth tax companies for total global cash-on-hand assets they have as well. Those are also required to be public record already. That way private business executives cannot tax haven their own stuff under an LLC, and companies like Google / FB are punished for hoarding hundreds of billions in offshore accounts they have no intent to spend or bring back into the states. Of course, this is all saying "government should do X" which is just for entertainment, pretty much. The US is in no condition to act in the will of the people at all right now anyway, so its all speculation - you would have to fix the broken democracy first.

pjmorris 9y ago
> you can hit probably 98% of wealth by just taxing the calculated value of owned land and buildings (which is already being appraised for property taxes in most states) Henry George proposed this in the 1800's [0] [0] https://en.wikipedia.org/wiki/Georgism https://en.wikipedia.org/wiki/Georgism
- dredmorbius 9y ago
  And David Ricardo prior to him (George credits Ricardo lavishly, though I seldom see this mentioned).
  - conanbatt 9y ago
    And Milton Friedman after both of those
flyinglizard 9y ago
Once you start targeting public market holdings, it would just create an even stronger incentive for companies to remain private. Soon enough you'd have secondary markets for high rollers dealing in shares of private entities, which would be completely inaccessible to the average Joe - and congratulations, you've increased inequality. In fact, this is already the situation in technology investments to a large extent. Companies remain private for longer to avoid post IPO regulations and restrictions, and the only guys who can invest are the insiders who get the opportunity through their network. The companies are only pumped to the public when the ascent in value has pretty much diminished (SNAP, anyone?).
sokoloff 9y ago
> You would also want to wealth tax companies for total global cash-on-hand assets they have as well. Those are also required to be public record already. I'm not familiar with this being a requirement for foreign, private companies. (Reading between the lines, I'd expect a marked increase in investments in foreign, private companies under such a taxation scheme.)

mamon 9y ago

For starters you could just swap the tax rates: make income tax of 15% and capital gains tax of 35%.

dlp211 9y ago
That is such a simplification of income tax though. For example a family of 4 making $50k/yr pays about $40 in federal income taxes. If that same family make $75k it goes up to about $2500. Both of those as a percentage of income are far below 15%. Hell, I made more than the SS max last year and my effective tax rate was below 15%. See Mike Pence as another example, guy made over $100k and had an effective rate of something like 12%.

barrkel 9y ago

Most wealthy people don't keep their wealth in currency. Profit generating entities keep on generating profit even with inflation - input prices go up but so do sale prices. Inflation had a bigger affect when it changes, rather than when it is staying steady. If anything a higher inflation rate would mostly hurt homeowners because prices would be less supported by cheaper money.

cakedoggie 9y ago

> Not ideal obviously, but there'd be no way to avoid the inflation "tax". Buying property?