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Do any wealth taxes being seriously discussed not have floors/exemptions for primary residences/marginal rates/whatever? Why is a wealth tax a bad tax? Why is

by patmcc 6y ago

Do any wealth taxes being seriously discussed not have floors/exemptions for primary residences/marginal rates/whatever? Why is a wealth tax a bad tax? Why is it worse than income tax or a VAT or anything else we currently do? Many places currently have property taxes (a type of wealth tax) and they tend to work well. You need to redo your math. If your net worth is $10+ million and isn't increasing by at least ~4% a year you're doing something very wrong. So ~1% of your wealth going to taxes is eminently affordable. No need to lose control. Capital flight can be handled with exit taxes and restrictions on foreign ownership. Brain drain is usually high income (not high net worth) individuals leaving. The reason net-worth based taxation has been "falling out of favour" is because billionaires have an outsized impact on media and politics, and that very clearly suits their interests. He could be - but if that was the case he'd have better arguments. Why didn't he talk about capital flight and brain drain, and how other taxes would be more appropriate? He's a skilled essayist; he chose his words carefully, and he used language around stocks, founders, and ownership specifically to appeal to tech geeks who expect to start successful companies.

TazeTSchnitzel 6y ago
> Many places currently have property taxes (a type of wealth tax) and they tend to work well. Don't forget inheritance tax/estate tax! It's a wealth tax, just applied after (or near to) death.
- patmcc 6y ago
  I'm pretty opposed to estate taxes, they tend to penalize sudden deaths really heavily and place unfair stress and complication on widows/widowers. Plus the rates are sometimes high enough that they can lead to asset liquidation, selling of companies, etc. which I'm not a huge fan of. An annual wealth tax is much more sustainable for an individual or business.
  - tekknik 6y ago
    How does an estate tax place undue complications on widows but a wealth tax doesn’t place undue complications on individuals?
    - patmcc 6y ago
      Estate taxes are often on the order of ~20%+, so they can necessitate the sale of assets (real estate, companies, etc.) - and in the case of a sudden death, this can come at a very inopportune time, as well as being stressful on people who have just had a loved one die. An annual wealth tax of ~1% doesn't come with the same complications - just like income tax, it can be predicted, saved for, etc. Also most people with sizable estates (who have some idea they'll die in the next several years) can gift away or otherwise arrange to avoid estate taxes pretty successfully, so I don't think of them as especially useful. I don't worry about it too much since estate taxes are usually on quite large estates (>$5mil), but I just don't see it as a very good tax.
      - tekknik 6y ago
        This didn’t at all answer the question. You’ve basically said since it’s a static amount and because someone just died and also because it affects only large amounts it’s ok. None of this has anything to do with burden.
  - around_here 6y ago
    Estate taxes almost always apply to estates valued at > $5m. Why anyone who isn't super rich would give two squirts boggles my mind, and it a symptom of the American "temporarily embarrassed millionaire" mindset. Sadly, the professional/managerial class seems to be wholly preoccupied with these fantasies.
AdrianB1 6y ago
> If your net worth is $10+ million and isn't increasing by at least ~4% a year you're doing something very wrong. So the argument a tax is good is that it's your fault if you don't make enough money? Is it everyone's purpose in life to make enough money to pay taxes? > So ~1% of your wealth going to taxes is eminently affordable. Being affordable does not mean it is right. I can afford a $1200 iPhone, but I will never spend that kind of money on a phone, so asking me to pay $1200 for a phone is not right just because I can afford it.
- patmcc 6y ago
  I was responding to a specific point - that a wealth tax means that someone will lose control of their company. That's all I was arguing against with those points.
  - AdrianB1 6y ago
    And I responded to your arguments, word for word.
    - patmcc 6y ago
      No, you responded to arguments you thought I made, namely: 1) That a wealth tax is good because you should be making more money than the tax. 2) That a wealth tax is right simply because it's affordable. I didn't make either of those arguments. For 1 - regardless of whether you're making or losing money, any sensible wealth tax is marginal, only on net worth of amounts over $10mil (or whatever). So the very worst a wealth tax will do is keep you at that cap - you don't pay anything on your first $10mil (or whatever). For 2 - no, I'm saying a wealth tax is affordable, so it's clearly not wrong based on that alone. I'd say a wealth tax is right because it's progressive, not unaffordable, and ultimately not significantly impactful on the people it would impact (rich people). We need to have taxes of some kind. What do you think is the most "right" kind to have? Why is it more right than a wealth tax?
      - tekknik 6y ago
tekknik 6y ago
> You need to redo your math. If your net worth is $10+ million and isn't increasing by at least ~4% a year you're doing something very wrong. So ~1% of your wealth going to taxes is eminently affordable. No need to lose control. So now if I make $10mil, which is plenty to live off of today and likely in the near future, and want to call it quits and retire, I now have to continue to make 4% (why 4% also, seems arbitrary) so I can support a wealth tax? Do you not see you’re taking an option away by forcing someone to cover this tax with further gains?

by patmcc 6y ago

TazeTSchnitzel 6y ago

> Many places currently have property taxes (a type of wealth tax) and they tend to work well. Don't forget inheritance tax/estate tax! It's a wealth tax, just applied after (or near to) death.

patmcc 6y ago
I'm pretty opposed to estate taxes, they tend to penalize sudden deaths really heavily and place unfair stress and complication on widows/widowers. Plus the rates are sometimes high enough that they can lead to asset liquidation, selling of companies, etc. which I'm not a huge fan of. An annual wealth tax is much more sustainable for an individual or business.
- tekknik 6y ago
  How does an estate tax place undue complications on widows but a wealth tax doesn’t place undue complications on individuals?
  - patmcc 6y ago
    Estate taxes are often on the order of ~20%+, so they can necessitate the sale of assets (real estate, companies, etc.) - and in the case of a sudden death, this can come at a very inopportune time, as well as being stressful on people who have just had a loved one die. An annual wealth tax of ~1% doesn't come with the same complications - just like income tax, it can be predicted, saved for, etc. Also most people with sizable estates (who have some idea they'll die in the next several years) can gift away or otherwise arrange to avoid estate taxes pretty successfully, so I don't think of them as especially useful. I don't worry about it too much since estate taxes are usually on quite large estates (>$5mil), but I just don't see it as a very good tax.
    - tekknik 6y ago
      This didn’t at all answer the question. You’ve basically said since it’s a static amount and because someone just died and also because it affects only large amounts it’s ok. None of this has anything to do with burden.
- around_here 6y ago
  Estate taxes almost always apply to estates valued at > $5m. Why anyone who isn't super rich would give two squirts boggles my mind, and it a symptom of the American "temporarily embarrassed millionaire" mindset. Sadly, the professional/managerial class seems to be wholly preoccupied with these fantasies.

AdrianB1 6y ago

> If your net worth is $10+ million and isn't increasing by at least ~4% a year you're doing something very wrong. So the argument a tax is good is that it's your fault if you don't make enough money? Is it everyone's purpose in life to make enough money to pay taxes? > So ~1% of your wealth going to taxes is eminently affordable. Being affordable does not mean it is right. I can afford a $1200 iPhone, but I will never spend that kind of money on a phone, so asking me to pay $1200 for a phone is not right just because I can afford it.

patmcc 6y ago
I was responding to a specific point - that a wealth tax means that someone will lose control of their company. That's all I was arguing against with those points.
- AdrianB1 6y ago
  And I responded to your arguments, word for word.
  - patmcc 6y ago
    No, you responded to arguments you thought I made, namely: 1) That a wealth tax is good because you should be making more money than the tax. 2) That a wealth tax is right simply because it's affordable. I didn't make either of those arguments. For 1 - regardless of whether you're making or losing money, any sensible wealth tax is marginal, only on net worth of amounts over $10mil (or whatever). So the very worst a wealth tax will do is keep you at that cap - you don't pay anything on your first $10mil (or whatever). For 2 - no, I'm saying a wealth tax is affordable, so it's clearly not wrong based on that alone. I'd say a wealth tax is right because it's progressive, not unaffordable, and ultimately not significantly impactful on the people it would impact (rich people). We need to have taxes of some kind. What do you think is the most "right" kind to have? Why is it more right than a wealth tax?
    - tekknik 6y ago

tekknik 6y ago

> You need to redo your math. If your net worth is $10+ million and isn't increasing by at least ~4% a year you're doing something very wrong. So ~1% of your wealth going to taxes is eminently affordable. No need to lose control. So now if I make $10mil, which is plenty to live off of today and likely in the near future, and want to call it quits and retire, I now have to continue to make 4% (why 4% also, seems arbitrary) so I can support a wealth tax? Do you not see you’re taking an option away by forcing someone to cover this tax with further gains?