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> The specific proposals by Ms. Warren and one of her rivals, Senator Bernie Sanders, to impose a new federal tax on wealth are innovations that require careful

> The specific proposals by Ms. Warren and one of her rivals, Senator Bernie Sanders, to impose a new federal tax on wealth are innovations that require careful consideration. The NYT and myself have a very different definition of “innovation”.

fastball 7y ago
Even if "innovative" was just a synonym of "original", it's not even an original idea, as many European countries have already tried a wealth tax -- and I'm fairly certain every country that has tried it has repealed it not long after.
- Harvey-Specter 7y ago
  Was the repeal a result of it not working, or a result of a more billionaire-friendly party returning to power?
  - jerf 7y ago
    "Working" in the political arena has a flexible meaning. They "work" in terms of, yes, they collect money. However, they always collect way less money than the people who made the initial promises said, because the people who were making the promises always assume that if they tax wealth at 75%, their income will be 75% of the current tax base, at the time the wealth tax is proposed and/or passed. The problem is, if you make staying within your tax zone suddenly cost, say, literally 3 billion dollars (and that's the sort of thing we're talking about here), then you just gave the wealth a 3 billion dollar incentive to leave before your tax can come into effect, and the end result is the tax base is much smaller than was anticipated. So they don't "work" in the sense that they will not collect anything near what the advocates promise they will, and they also chase the wealth away, which, for all the rhetoric about inequality and such, isn't necessarily a good thing for a polity. Generally when people want "equality", they want their wealth level to be raised, not to attain "equality" by lowering the average wealth level. Chasing, say, Jeff Bezos out of the country, along with whatever bits of Amazon he decides to take with him, is not going to be a net gain for the US, just as one example. They also "work" in the sense that the Gini coefficient probably will indeed go down, so advocates can claim success. But it may not be what you were looking for. (Also, for the record, I am neither particularly celebrating nor particularly condemning anything or anyone here. This is just how the incentives line up. You can't wish incentive structures away. Effective law takes incentives into account and harnesses them for the desired result. Generally, solving the Big Problems requires something other than the most obvious, direct approach, because there's a selection effect; if the most obvious, direct approach solved the problem, we wouldn't have it.)
    - zzzcpan 7y ago
      > then you just gave the wealth a 3 billion dollar incentive to leave before your tax can come into effect You can impose tax on leaving bigger than 3 billion dollars effectively removing leaving incentive. Also you are assuming they are fluid and actually can leave and stay wealthy somewhere else, which is likely not the case for most of the wealth on the planet.
      - jerf 7y ago
        "You can impose tax on leaving bigger than 3 billion dollars effectively removing leaving incentive." In the US, the country in question, you'd have some constitutional problems with that plan. That's a bad thing; you need this wealth confiscation to be clearly legal, because you have incentivized billions of dollars worth of legal expenditure to prevent it from happening. (There's those nasty incentives again.) Also, it turns out that demonstrating to the entire world that you'll just take whatever you want, whenever you want, and punish anyone who tries to protect themselves from that, doesn't exactly incentivize a healthy business environment or encourage the kind of investment you need to create the wealth that you need to bring inequality down by bringing most people up. People need predictability to make plans for the future; this sort of thing extremely strongly incentivizes even shorter term planning than we sometimes get, because nobody knows whether you're going to come along and take most of their stuff tomorrow, or even retroactively. It's not a good plan to create a wealth-producing society. It's really, really easy to "solve" the wealth inequality problem by simply destroying all (or almost all) wealth, everywhere. It's been done in several countries in the past century. It's not usually the solution people want when they're talking about wealth inequality... oh, they might take a small hit in spite if they knew it was really going to stick it to those "wealthy fat cats", but for the most part, people expect the end of "wealth inequality" to increase their own wealth, not destroy it. "Also you are assuming they are fluid and actually can leave and stay wealthy somewhere else, which is likely not the case for most of the wealth on the planet." It is the case for the sort of wealth we are talking about, though. Yes, you can indeed tax the lower and lower-middle classes very hard, because they tend to be unable to move. Not exactly a "wealth" tax anymore, though, is it? Billionaires can move wealth. After all, if we're talking a 75% confiscation rate, it's worth it to move overseas even if they take a 50% bath. Billions of dollars worth of incentives cover a lot of things.
  - gonzo41 7y ago
    Almost certainly the later. I know this is a hawkish view, but certain individuals have so much wealth and political influence that it's not so far fetched to consider them like a hostile sovereignty that has effective regulatory capture of the the countries they exist in. People generally don't like to be treated like serfs. The taxes will eventually stick, or there will be trouble.
- cdmckay 7y ago
  They still have it where I live (Catalonia, Spain). Also, the fact that was repealed doesn’t really say whether or not it was a good policy or not.
- criley2 7y ago
  Spain, Belgium, Switzerland and Norway have some form of a wealth tax, and it can bring them between 0.5 to 3+% of total revenue. If America could raise 1% of its revenue from wealth taxes, that would be a yearly revenue of ~$31.8B. For reference, NASA's yearly budget is around $21B, and the cost of free college for all Americans would be around $45B depending on plan and how aggressive a single payer could reduce costs.
- tomelders 7y ago
  A clever twist in Warren's proposal is that the Government has the right to buy your property for whatever you've listed it for. Now I'm sure any attempt to actually do that would end in a court case, but it's not really worth the risk to the owner of said wealth to offer the government all your Rembrants at bargain basement prices.
  - sfg 7y ago
    Only the government for privacy's sake?
  - offshore1243 7y ago
    A clever twist for the billionaire would be just to offshore their assets so the US government can't seize them
  - offshore4432 7y ago
    Couldn't they just offshore their assets?
  - joncrocks 7y ago
    What value goes down on paper? The value that something has to you? The price that someone else would pay? Let say you have Warren Buffett's shoes. Warren Buffett paid $X for those shoes. A pair of new shoes would cost him $Y. Someone might pay $Z as they are Warren Buffett's shoes. Someone might pay $V just to inconvenience Warren (so he would have to go to the shoe store). Maybe they have some sentimental value to Warren, so he would pay $T not to lose them. What are the shoes worth?
    - mcphage 7y ago
      > What value goes down on paper? The value that something has to you? The price that someone else would pay? I mean, I don't know anything beyond what the person you're responding to said, but they made it pretty clear: > the Government has the right to buy your property for whatever you've listed it for
  - foogazi 7y ago
- todipa 7y ago
  I think Argentina has a an asset tax on anything above USD $300,000 at 0.75% but they also have basis adjustments for inflation which I think is fair. The basis of all your assets increases as a result of inflation.
czbond 7y ago
A person is a person and all of us must be equal - until it comes to paying things. Then it's ok to burden the rich for paying for dramatically more than their fair share. When one runs out of other ideas, and can't extract money from the bottom 50% of US citizens who do not pay taxes, yet want to continue spending instead of cutting entitlements - treating rich people as another revenue source will continue.
- onion2k 7y ago
  Then it's ok to burden the rich for paying for dramatically more than their fair share. They own dramatically more than their fair share so it all balances out.
- close04 7y ago
  That's because having that much money gives you disproportionate power. That power should come at a cost. Democracy is supposed to represent each individual equally yet money (powerful lobbies) have swayed that in the favor of a very small few since forever. If equality is important when paying taxes then it should be equally important when pulling strings. And if we're talking about fairness if you were always happy with one of these imbalances then it's only fair to accept the second.
  - czbond 7y ago
    Edit: Why would taxing "power" solve anything? We tax responsibilities and assets. Sure there are massive inequalities in the US - but it is not because of "wealthy people". I could suggest it is because of the mainly failings of humans as a barely evolved species to create scaleable entities (businesses) as it requires a huge human effort, skill, luck, and capaiblity to do. Most humans give up on the really hard stuff required to build strategic levers that multiply their monetary outcomes. And instead focus on small ROI skills (monetarily speaking). I disagree - I believe this is mostly projection. Most wealthy people aren't exorbitantly wealthy. There are 607 billionaires in the US (thats not many). They're not all hiring lobbyists, and trying to corrupt the US. Neither are the deca-millionaires, they're just either building things (businesses to employ others) or getting better at their craft.

fastball 7y ago

Even if "innovative" was just a synonym of "original", it's not even an original idea, as many European countries have already tried a wealth tax -- and I'm fairly certain every country that has tried it has repealed it not long after.

Harvey-Specter 7y ago
Was the repeal a result of it not working, or a result of a more billionaire-friendly party returning to power?
- jerf 7y ago
  "Working" in the political arena has a flexible meaning. They "work" in terms of, yes, they collect money. However, they always collect way less money than the people who made the initial promises said, because the people who were making the promises always assume that if they tax wealth at 75%, their income will be 75% of the current tax base, at the time the wealth tax is proposed and/or passed. The problem is, if you make staying within your tax zone suddenly cost, say, literally 3 billion dollars (and that's the sort of thing we're talking about here), then you just gave the wealth a 3 billion dollar incentive to leave before your tax can come into effect, and the end result is the tax base is much smaller than was anticipated. So they don't "work" in the sense that they will not collect anything near what the advocates promise they will, and they also chase the wealth away, which, for all the rhetoric about inequality and such, isn't necessarily a good thing for a polity. Generally when people want "equality", they want their wealth level to be raised, not to attain "equality" by lowering the average wealth level. Chasing, say, Jeff Bezos out of the country, along with whatever bits of Amazon he decides to take with him, is not going to be a net gain for the US, just as one example. They also "work" in the sense that the Gini coefficient probably will indeed go down, so advocates can claim success. But it may not be what you were looking for. (Also, for the record, I am neither particularly celebrating nor particularly condemning anything or anyone here. This is just how the incentives line up. You can't wish incentive structures away. Effective law takes incentives into account and harnesses them for the desired result. Generally, solving the Big Problems requires something other than the most obvious, direct approach, because there's a selection effect; if the most obvious, direct approach solved the problem, we wouldn't have it.)
  - zzzcpan 7y ago
    > then you just gave the wealth a 3 billion dollar incentive to leave before your tax can come into effect You can impose tax on leaving bigger than 3 billion dollars effectively removing leaving incentive. Also you are assuming they are fluid and actually can leave and stay wealthy somewhere else, which is likely not the case for most of the wealth on the planet.
    - jerf 7y ago
      "You can impose tax on leaving bigger than 3 billion dollars effectively removing leaving incentive." In the US, the country in question, you'd have some constitutional problems with that plan. That's a bad thing; you need this wealth confiscation to be clearly legal, because you have incentivized billions of dollars worth of legal expenditure to prevent it from happening. (There's those nasty incentives again.) Also, it turns out that demonstrating to the entire world that you'll just take whatever you want, whenever you want, and punish anyone who tries to protect themselves from that, doesn't exactly incentivize a healthy business environment or encourage the kind of investment you need to create the wealth that you need to bring inequality down by bringing most people up. People need predictability to make plans for the future; this sort of thing extremely strongly incentivizes even shorter term planning than we sometimes get, because nobody knows whether you're going to come along and take most of their stuff tomorrow, or even retroactively. It's not a good plan to create a wealth-producing society. It's really, really easy to "solve" the wealth inequality problem by simply destroying all (or almost all) wealth, everywhere. It's been done in several countries in the past century. It's not usually the solution people want when they're talking about wealth inequality... oh, they might take a small hit in spite if they knew it was really going to stick it to those "wealthy fat cats", but for the most part, people expect the end of "wealth inequality" to increase their own wealth, not destroy it. "Also you are assuming they are fluid and actually can leave and stay wealthy somewhere else, which is likely not the case for most of the wealth on the planet." It is the case for the sort of wealth we are talking about, though. Yes, you can indeed tax the lower and lower-middle classes very hard, because they tend to be unable to move. Not exactly a "wealth" tax anymore, though, is it? Billionaires can move wealth. After all, if we're talking a 75% confiscation rate, it's worth it to move overseas even if they take a 50% bath. Billions of dollars worth of incentives cover a lot of things.
- gonzo41 7y ago
  Almost certainly the later. I know this is a hawkish view, but certain individuals have so much wealth and political influence that it's not so far fetched to consider them like a hostile sovereignty that has effective regulatory capture of the the countries they exist in. People generally don't like to be treated like serfs. The taxes will eventually stick, or there will be trouble.
cdmckay 7y ago
They still have it where I live (Catalonia, Spain). Also, the fact that was repealed doesn’t really say whether or not it was a good policy or not.
criley2 7y ago
Spain, Belgium, Switzerland and Norway have some form of a wealth tax, and it can bring them between 0.5 to 3+% of total revenue. If America could raise 1% of its revenue from wealth taxes, that would be a yearly revenue of ~$31.8B. For reference, NASA's yearly budget is around $21B, and the cost of free college for all Americans would be around $45B depending on plan and how aggressive a single payer could reduce costs.
tomelders 7y ago
A clever twist in Warren's proposal is that the Government has the right to buy your property for whatever you've listed it for. Now I'm sure any attempt to actually do that would end in a court case, but it's not really worth the risk to the owner of said wealth to offer the government all your Rembrants at bargain basement prices.
- sfg 7y ago
  Only the government for privacy's sake?
- offshore1243 7y ago
  A clever twist for the billionaire would be just to offshore their assets so the US government can't seize them
- offshore4432 7y ago
  Couldn't they just offshore their assets?
- joncrocks 7y ago
  What value goes down on paper? The value that something has to you? The price that someone else would pay? Let say you have Warren Buffett's shoes. Warren Buffett paid $X for those shoes. A pair of new shoes would cost him $Y. Someone might pay $Z as they are Warren Buffett's shoes. Someone might pay $V just to inconvenience Warren (so he would have to go to the shoe store). Maybe they have some sentimental value to Warren, so he would pay $T not to lose them. What are the shoes worth?
  - mcphage 7y ago
    > What value goes down on paper? The value that something has to you? The price that someone else would pay? I mean, I don't know anything beyond what the person you're responding to said, but they made it pretty clear: > the Government has the right to buy your property for whatever you've listed it for
- foogazi 7y ago
todipa 7y ago
I think Argentina has a an asset tax on anything above USD $300,000 at 0.75% but they also have basis adjustments for inflation which I think is fair. The basis of all your assets increases as a result of inflation.

czbond 7y ago

A person is a person and all of us must be equal - until it comes to paying things. Then it's ok to burden the rich for paying for dramatically more than their fair share. When one runs out of other ideas, and can't extract money from the bottom 50% of US citizens who do not pay taxes, yet want to continue spending instead of cutting entitlements - treating rich people as another revenue source will continue.

onion2k 7y ago
Then it's ok to burden the rich for paying for dramatically more than their fair share. They own dramatically more than their fair share so it all balances out.
close04 7y ago
That's because having that much money gives you disproportionate power. That power should come at a cost. Democracy is supposed to represent each individual equally yet money (powerful lobbies) have swayed that in the favor of a very small few since forever. If equality is important when paying taxes then it should be equally important when pulling strings. And if we're talking about fairness if you were always happy with one of these imbalances then it's only fair to accept the second.
- czbond 7y ago
  Edit: Why would taxing "power" solve anything? We tax responsibilities and assets. Sure there are massive inequalities in the US - but it is not because of "wealthy people". I could suggest it is because of the mainly failings of humans as a barely evolved species to create scaleable entities (businesses) as it requires a huge human effort, skill, luck, and capaiblity to do. Most humans give up on the really hard stuff required to build strategic levers that multiply their monetary outcomes. And instead focus on small ROI skills (monetarily speaking). I disagree - I believe this is mostly projection. Most wealthy people aren't exorbitantly wealthy. There are 607 billionaires in the US (thats not many). They're not all hiring lobbyists, and trying to corrupt the US. Neither are the deca-millionaires, they're just either building things (businesses to employ others) or getting better at their craft.