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Counter argument. https://www.economist.com/news/leaders/21731626-case-taxing-inherited-assets-strong-hated-tax-fair-one https://www.economist.com/news/leaders/

Counter argument. https://www.economist.com/news/leaders/21731626-case-taxing-inherited-assets-strong-hated-tax-fair-one https://www.economist.com/news/leaders/21731626-case-taxing-... In my opinion, a wealth tax (of which estate tax is one example) is much fairer than an income tax. It is somewhat difficult to levy, but I don't think it's inherently more difficult than measuring income for income tax. It's just that we've spent a century working on income monitoring laws and regulation.

DoofusOfDeath 9y ago
I'm unable to find a satisfying definition of "fairness" when it comes to taxation. So for now I try to think about a tax's likely consequences. Honest question: Have you had more luck?
- logfromblammo 9y ago
  I think that an "increase in wealth" tax might be accomplished by taxing income, but deducting all consumer spending. If you earn $70k and spend $60k on rent, utilities, groceries, car repairs, and such, then $10k is taxable. If you earn $40k and spend $40k, essentially living paycheck-to-paycheck, $0 is taxable. If you earn $300k and spend $100k, then $200k is taxable. Purchase of financial instruments and equities are not deductible. If you add to that an exemption of the higher of 5% of income or $20k--so as to not punish people for having a reasonable savings rate--and progressively tax the remainder, that seems pretty "fair" to me (aside from the question of whether any tax can be truly fair). Those who end up paying it are only the ones who can afford to pay it, and they pay in proportion to the extent to which they benefited from the economy. This kind of tax, like any other, also has possible unintended consequences.
- jannotti 9y ago
  Well, I'm not sure there's any definition that's going to come straight from first principles, but I see a wealth tax as something closer to the way we tax corporations, which is to tax "profit" not "revenue". A personal income tax is more of a revenue tax - even if someone has to spend every dollar they make on kids, health care, rent, etc - we still tax it. We try to fix this a little, by offering deductions that we think make sense. But a wealth tax seems like a more direct way to get at this idea. Levy a tax on the money that people are able to accumulate, not on the money that flows through them.

DoofusOfDeath 9y ago

I'm unable to find a satisfying definition of "fairness" when it comes to taxation. So for now I try to think about a tax's likely consequences. Honest question: Have you had more luck?

logfromblammo 9y ago
I think that an "increase in wealth" tax might be accomplished by taxing income, but deducting all consumer spending. If you earn $70k and spend $60k on rent, utilities, groceries, car repairs, and such, then $10k is taxable. If you earn $40k and spend $40k, essentially living paycheck-to-paycheck, $0 is taxable. If you earn $300k and spend $100k, then $200k is taxable. Purchase of financial instruments and equities are not deductible. If you add to that an exemption of the higher of 5% of income or $20k--so as to not punish people for having a reasonable savings rate--and progressively tax the remainder, that seems pretty "fair" to me (aside from the question of whether any tax can be truly fair). Those who end up paying it are only the ones who can afford to pay it, and they pay in proportion to the extent to which they benefited from the economy. This kind of tax, like any other, also has possible unintended consequences.
jannotti 9y ago
Well, I'm not sure there's any definition that's going to come straight from first principles, but I see a wealth tax as something closer to the way we tax corporations, which is to tax "profit" not "revenue". A personal income tax is more of a revenue tax - even if someone has to spend every dollar they make on kids, health care, rent, etc - we still tax it. We try to fix this a little, by offering deductions that we think make sense. But a wealth tax seems like a more direct way to get at this idea. Levy a tax on the money that people are able to accumulate, not on the money that flows through them.