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The other problem with wealth taxes is that they don’t work. If we tax wealth beginning at 50mil suddenly we will have tons of 49millionaires. Just imagine if t

The other problem with wealth taxes is that they don’t work. If we tax wealth beginning at 50mil suddenly we will have tons of 49millionaires. Just imagine if the wealth tax began at 50k rather than 50mil. The hottest growth job would be tax lawyers.

dgacmu 7y ago
Only a poorly designed wealth tax would have that property. This is exactly why progressive tax systems use marginal rates. People wouldn't stop saving at 49 million when they had to pay tax of 1% on the money above 50 million. they wouldn't stop at 99 million if they had to pay 2% on the parts above 100 million.
- londons_explore 7y ago
  A lot of people don't understand marginal tax rates. If the population you are taxing doesn't understand the tax system, they will behave according to their understanding of it, rather than reality. I have met plenty of people who say "don't give me a pay rise, I don't want to hit the 40% tax rate", even with a marginal tax scheme with no discontinuities.
  - imgabe 7y ago
    Someone with a net worth of $50 million should understand marginal tax rates, or at the very least be able to hire someone who does.
  - croon 7y ago
    You can offer to take the bullet for them. Win-win!
  - hackeraccount 7y ago
    That's not totally illogical. Generally pay raises come with an expectation of effort and commitment. Maybe the people saying no don't think the after tax amount covers the increases in those things.
- vasilipupkin 7y ago
  The issue isn’t that people wouldn’t try getting richer above 50 mln, the issue is that they would try to make it look like they have less than that to avoid extra taxes. Most obviously, a couple worth 98 million can get divorced and, voila, each of them is worth 49 million and they completely avoid the tax. These effects make it difficult to rely on the supposed revenue wealth tax is designed to collect.
  - deleted 7y ago
    [deleted]
hocuspocus 7y ago
Wealth tax starts well below 100k in most Swiss cantons and it doesn't cause any particular issue.
- xorfish 7y ago
  However there are no capital gains taxes and rates are mostly around 0.4%. There is an equivalent to property taxes where a virtual income of your own home is taxed. It would probably be equal to a 0.7% property tax.
- mattrp 7y ago
  That’s because of all the non-Swiss who domicile in Switzerland but earn income outside of Switzerland. But this example does serve to illustrate that a wealth tax in US won’t be restricted to the “rich” forever... eventually almost everyone will pay it.
  - hocuspocus 7y ago
    Lump sum tax deals for foreigners have nothing to do with wealth tax really.

dgacmu 7y ago

Only a poorly designed wealth tax would have that property. This is exactly why progressive tax systems use marginal rates. People wouldn't stop saving at 49 million when they had to pay tax of 1% on the money above 50 million. they wouldn't stop at 99 million if they had to pay 2% on the parts above 100 million.

londons_explore 7y ago
A lot of people don't understand marginal tax rates. If the population you are taxing doesn't understand the tax system, they will behave according to their understanding of it, rather than reality. I have met plenty of people who say "don't give me a pay rise, I don't want to hit the 40% tax rate", even with a marginal tax scheme with no discontinuities.
- imgabe 7y ago
  Someone with a net worth of $50 million should understand marginal tax rates, or at the very least be able to hire someone who does.
- croon 7y ago
  You can offer to take the bullet for them. Win-win!
- hackeraccount 7y ago
  That's not totally illogical. Generally pay raises come with an expectation of effort and commitment. Maybe the people saying no don't think the after tax amount covers the increases in those things.
vasilipupkin 7y ago
The issue isn’t that people wouldn’t try getting richer above 50 mln, the issue is that they would try to make it look like they have less than that to avoid extra taxes. Most obviously, a couple worth 98 million can get divorced and, voila, each of them is worth 49 million and they completely avoid the tax. These effects make it difficult to rely on the supposed revenue wealth tax is designed to collect.
- deleted 7y ago
  [deleted]

hocuspocus 7y ago

Wealth tax starts well below 100k in most Swiss cantons and it doesn't cause any particular issue.

xorfish 7y ago
However there are no capital gains taxes and rates are mostly around 0.4%. There is an equivalent to property taxes where a virtual income of your own home is taxed. It would probably be equal to a 0.7% property tax.
mattrp 7y ago
That’s because of all the non-Swiss who domicile in Switzerland but earn income outside of Switzerland. But this example does serve to illustrate that a wealth tax in US won’t be restricted to the “rich” forever... eventually almost everyone will pay it.
- hocuspocus 7y ago
  Lump sum tax deals for foreigners have nothing to do with wealth tax really.