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There's a simple solution to it, no? Abolish all taxes on income, dividends, or capital gains. Introduce a single tax on wealth. Every year tax a certain percen

There's a simple solution to it, no? Abolish all taxes on income, dividends, or capital gains. Introduce a single tax on wealth. Every year tax a certain percentage of one's capital holdings, whether capital gain is realized or not.

naveen99 9y ago
What about a business that is worth 10 million dollars but has a bad year and makes no profit. So now the owner has to pay a tax on the 10 million dollar wealth and liquidate his business ?
- baursak 9y ago
  Why would they liquidate their business? I'm not advocating for a 100% rate. If they continuously lose money year after year, then the wealth tax would just be an additional incentive for them to shutdown, yes.
Flozzin 9y ago
If you are wealthy and have a lot of holdings, create an offshore company and move all your wealth to it, then just get a company credit card. All your wealth and possessions is now owned by that company... Spit balling here, but I'm not sure a wealth tax will fix it.
- baursak 9y ago
  If you're an owner of an asset, and your primary residence is in the country of wealth taxation, you pay a wealth tax on the value of that asset, no matter where that asset is located. Another problem though is valuation of that asset. There will be huge incentives to show lower valuations, but that's already a case for things like real-estate property taxes, and somehow the system still works.
djrogers 9y ago
Under your proposal, the roughly 50% of Americans with zero net wealth would pay nothing. That’s fine on paper, but it would actually incent people to stay in debt and dis-incent the accumulation of savings. Look at it this way, I can either buy a bigger house with more debt whenever I have some extra money laying around, or I can save that cash and have the government take some of it every year. You also incent people to spend money on non-material things like travel and entertainment, rather than spending cash on a reasonable car (because leasing the car and blowing the other $20k in Vegas sounds like more fun). There’s a simple maxim in taxes and economics - do not tax activities you want to encourage, and tax those which you want to curtail.
- baursak 9y ago
  I wouldn't start taxing any wealth below a certain threshold at all. Like $200K or something. If you buys a bigger house, if equity portion of that house is above a taxable threshold -- say a $1M house, and you have $200K equity, then that equity will be taxed. Very minimally I might add. > do not tax activities you want to encourage, and tax those which you want to curtail. That's not working out currently. Unless you want to encourage massive wealth inequality.

naveen99 9y ago

What about a business that is worth 10 million dollars but has a bad year and makes no profit. So now the owner has to pay a tax on the 10 million dollar wealth and liquidate his business ?

baursak 9y ago
Why would they liquidate their business? I'm not advocating for a 100% rate. If they continuously lose money year after year, then the wealth tax would just be an additional incentive for them to shutdown, yes.

Flozzin 9y ago

If you are wealthy and have a lot of holdings, create an offshore company and move all your wealth to it, then just get a company credit card. All your wealth and possessions is now owned by that company... Spit balling here, but I'm not sure a wealth tax will fix it.

baursak 9y ago
If you're an owner of an asset, and your primary residence is in the country of wealth taxation, you pay a wealth tax on the value of that asset, no matter where that asset is located. Another problem though is valuation of that asset. There will be huge incentives to show lower valuations, but that's already a case for things like real-estate property taxes, and somehow the system still works.

djrogers 9y ago

Under your proposal, the roughly 50% of Americans with zero net wealth would pay nothing. That’s fine on paper, but it would actually incent people to stay in debt and dis-incent the accumulation of savings. Look at it this way, I can either buy a bigger house with more debt whenever I have some extra money laying around, or I can save that cash and have the government take some of it every year. You also incent people to spend money on non-material things like travel and entertainment, rather than spending cash on a reasonable car (because leasing the car and blowing the other $20k in Vegas sounds like more fun). There’s a simple maxim in taxes and economics - do not tax activities you want to encourage, and tax those which you want to curtail.

baursak 9y ago
I wouldn't start taxing any wealth below a certain threshold at all. Like $200K or something. If you buys a bigger house, if equity portion of that house is above a taxable threshold -- say a $1M house, and you have $200K equity, then that equity will be taxed. Very minimally I might add. > do not tax activities you want to encourage, and tax those which you want to curtail. That's not working out currently. Unless you want to encourage massive wealth inequality.