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> Wealth tax proposals I've seen don't kick in until $50 million or $100 million. The very first U.S. income tax, imposed during the Civil War (the nation's bl
by zeveb 6y ago
> Wealth tax proposals I've seen don't kick in until $50 million or $100 million.
The very first U.S. income tax, imposed during the Civil War (the nation's bloodiest conflict), was 3% on income over $12,720, rising all the way to 5% on income over $159,000 (in 2020 dollars). This was unconstitutional at the time, and was eventually repealed.
The first income tax imposed after the ratification of the 16th Amendment was 1% on income over $78,510, with an additional 6% on income over $26,170,000 (2020 dollars).
The current U.S. income tax ranges from 10% to 37%, with a standard deduction of at least $12,200. There are also payroll taxes under FICA, which are even more.
I recount all this riveting history as evidence for my contention that there is absolutely no way that a wealth tax would remain at 1% for anything above $50 million. I guarantee that within a few years to decades most citizens would be required to pay wealth taxes, and that they would amount to a considerable amount even before taking into account their compounding nature.
> This means that there is a floor on how "poor" the government can make you via a wealth tax.
The only floor is zero: a government can, if it chooses, take everything from its subjects — or just from some of them.
- spencerflem 6y agoThe fact that the government taxes normal people at a rate much higher than they deserve seems to be an argument for a wealth tax and not against it
- zeveb 6y agoIf it taxes the income of normal people at a higher rate than they deserve, why do you think it would refrain from taxing the wealth of normal people higher than they deserve?
- spencerflem 6y agoI guess I was assuming that if they were to put in a wealth tax, the point would be to tax the very rich more (and thus everyone else less / provide healthcare / some sort of ubi). It could certainly be done in a regressive way, but I don't see that as innevitable or any worse than the status quo, since income taxes can be raised just as easily. Either way - I think we fundamtally agree that there needs to be more tax on the rich, be it investments, wealth tax, inheritance, or that sort of thing.
- zeveb 6y ago> It could certainly be done in a regressive way, but I don't see that as innevitable or any worse than the status quo, since income taxes can be raised just as easily. I am not (here) worried about it being regressive: I am worried about it being yet another mechanism for the state to take a larger fraction of GDP (about 2½% in 1900; almost 20% at the height of the Second World War; about 17% now, according to Wikipedia). > Either way - I think we fundamtally agree that there needs to be more tax on the rich, be it investments, wealth tax, inheritance, or that sort of thing. I certainly don't! I agree that we need a government; I agree that we need taxes to fund the government (I disagree with those who think that we can fund the government on a voluntary basis); I agree that taxes need to be fair in some sense. I suspect that fairer taxes would be higher for the middle classes, to be honest. Certainly the countries with effective welfare states seem to have more taxes on the middle than the U.S. does.