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The Moral Case for a Wealth Tax Has Never Been Clearer

48 points by voisin 6y ago

sova 6y ago
The assumption that a "wealth tax" will lead to a more equitable system is predicated on the assumption that: the government can use your dollar more effectively than you can at creating an equitable [wild, wild] world. "It is very easy to dream about how to give away other people's money," as a cynic on youtube recently commented. But to look to the government as some sort of Arbiter of Fairness, as Thomas Sowell might say "Cosmic Justice," is very naive. The government has no one person you can point to and hold accountable, but when you look in the mirror there is definitely someone who fits that description. I do not think the solution to a more equitable society is greater taxation, because typically, the wealthy will not have it (and will do all in their power to prevent it), and the tax dollars already at play have yet to achieve it. Were it the case that we were part of the way there and simply needed more funding, the argument might have merit, but the fact remains that many points of access are not equal and it does not come down to simple taxation, the problem is a societal, individual, collective, and motivational one. Without addressing the actual root causes of inequity, distributing -or "redistributing" as people like to say- funds will amount to little more than an invitation to use force to take from the haves and deign to the have-nots, without creating any meaningful method of creating more value or unlocking more creativity in between.
- aiscapehumanity 6y ago
  Proposing a counter argument that's a non-solution is all this is.
  - sova 6y ago
    If a group of toddlers gets their cat is stuck in a tree, calling the largest toddler over to fetch it will also not work. We have to be more creative than resorting to brutalist means. True, I did not offer a solution, but if I suggested that roads 1 and 2 are not correct, where is the man to show me roads 3 and 4?
- senthil_rajasek 6y ago
  "assumption that a 'wealth tax' will lead to a more equitable system" Where is this assumption stated? I always thought Wealth Tax was to prevent concentration of wealth.
  - chucknthem 6y ago
    If not for more equitable society, what's wrong with concentration of wealth?
    - edoceo 6y ago
      Lots of hand wavy things and also the presumption that wealth must have come at some undue cost to others (eg low wages)
    - drewrv 6y ago
      Wealth begets power. We have checks in place for political power (term limits, separate branches of government). We have restrictions on arms (tanks, anti-aircraft guns).
  - vermilingua 6y ago
    Preventing concentration of wealth... to what end, are you assuming? “Where is this assumption stated?” makes nearly no sense when you’re talking about a worldwide political discourse.
  - andrewflnr 6y ago
    Preventing concentration of wealth can only be valuable if it leads to a more equitable system. Otherwise it would have the same moral weight as preventing oversized dirt clods.
    - senthil_rajasek 6y ago
      Preventing concentration of wealth is more valuable than preventing oversized dirt clods. It prevents concentration of power.
- handmodel 6y ago
  Property tax is already a form of a wealth tax. The estate tax was a one-time wealth tax. It is true that wealthy people do get around many rules but that is not a reason to not have a property tax or to never have an estate tax tax - largely they still pay as paying a lot to move money around is often times not worth it. The government doesn't have to use your "dollar more effectively than you" if you have different goals. If the government wants to build a school and you don't want a school you don't get to choose not to pay taxes for the school. Other than just increasing the national debt (which I'm for) we tax people. A wealth tax would be a way to either increase revenue to increase spending OR increase revenue so that other forms of revenue can be cut.
  - starik36 6y ago
    > increasing the national debt (which I'm for) Sigh. Let's kick the can down the road some more.
    - beamatronic 6y ago
      If 2008 taught us anything, the money printer solves all problems. It’s all imaginary anyway.
      - medium_burrito 6y ago
        money printer go brrrrrrrrrrrrrrrrrr
        RickJWagner 6y ago
        I see that often at 'Bogleheads.org'. Is it a cultural reference from somewhere?
      - torstenvl 6y ago
        That is a terrible take-away from 2008. Are you accounting for any of the (gestures broadly) terrible consequences of that course of action?
- brundolf 6y ago
  > The assumption that a "wealth tax" will lead to a more equitable system is predicated on the assumption that: the government can use your dollar more effectively than you can at creating an equitable [wild, wild] world. If the money is directly redistributed to those who need it, how is that the government deciding how it should be used? Personal responsibility is well and good - we should all aspire to be more charitable - but it's become clear that it doesn't scale. Free-market capitalism is specifically designed to decouple the seeking of profit from the real-world consequences of that activity. This is what makes it so powerful, and also why it can be so destructive. It should be no surprise to us that a system designed to simplify and abstract people's relationship with society ends up eroding things like empathy and social consciousness. If you ask me, human society can't effectively scale to this level at all. But here we are, and burying our heads in the sand when it comes to clear and present (and deepening) issues is foolishness.
  - sova 6y ago
    >If the money is directly redistributed to those who need it, how is that the government deciding how it should be used? When has this ever happened in the history of mankind? As soon as the government gets cash, when is it "redistributed?" Aside from 1) waiting on charity from the rich or 2) forcing people to yield more of their resources to the government that may or may not [history leans to not] do what you suggest, there is likely a plethora of ways, at the very least a third way. I'm not saying don't give people money, but I am saying it's naive to assume the government can do it. Demanding that we involve government is similar to children demanding parents come resolve their disputes and affairs. There must be a way forward without resorting to shouting "mom! dad!"
    - brundolf 6y ago
      > When has this ever happened in the history of mankind? It happened across the world this year, in response to the pandemic. People in several countries were given enough money to make up for lost income. And even in the U.S. people were given a (comparatively paltry, but not insignificant) stimulus check. Beyond that: universal basic income has been discussed and trialed quite a bit. As a permanent fixture of society I'm not yet sold on it, but as a temporary measure to stave off some of our acutely-deepening inequality, I think it would be a simple and direct (indeed, maybe the most literal) form of wealth redistribution. That's not to say I don't think the government can spend some of the money on society better than our billionaires will (who, with few exceptions, simply don't spend their money on society at all). But I also don't think wealth redistribution has to assume that.
- groceryheist 6y ago
  What's the root cause of inequality? There are certainly historical causes of inequality (e.g. slavery, feudalism, colonialism). These root causes are largely in the past, though they have modern residues (e.g. racism, sexism, western chauvinism) which contribute to inequaliy. I think they are often less important than how already existing inequality is amplified by cumulative advantage dynamics (the rich get richer). A wealth tax directly reduces the amplification and wealth can be redistributed to reduce inequality (not just of wealth, but of education, skills, and status too) on the other end.
  - seibelj 6y ago
    The root cause of wealth inequality is that some people value accumulating wealth more than others. At the working class level it’s some people taking jobs cleaning sewers vs. mopping floors. Without inequality no one would do the “dirty” jobs.
    - Dylan16807 6y ago
      "Some people will do less pleasant jobs for more pay" is a very tiny fraction of inequality. It's technically a root cause but not one of the big problem ones. For the most part, once you add in the other factors, the dirtier jobs pay you worse!
      - seibelj 6y ago
        I could not disagree with you more. If you want to do back-breaking labor for equal money as cushy jobs, be my guest. But my experience is that the difficulty, skill, and (gasp!) risk of a job determines how well it’s compensated. If you want to imagine that all jobs can pay equally well, enjoy the ruination of your country if your preferred political party ever manages to seize power.
        Dylan16807 6y ago
        Cushy jobs pay much more than labor jobs! > If you want to imagine that all jobs can pay equally well That's not what I said at all. I said that harder jobs paying more is NOT the problem. I don't want all jobs to pay the same. I'm happy with some jobs paying ten times as much as other jobs. But there's a limit to overall inequality before problems start to happen.
- grey-area 6y ago
  Nope. It’s predicated on the observation that the rate of return on capital exceeds the rate of economic growth. Taxing income is perverse and disincentivizes work. Taxing capital makes a lot more sense IMO. Income you get by working. Capital you get by inheriting, saving or by having capital, which earns you more. To be clear I think capital is good and necessary but I see no reason why work should be taxed more. Wealth is created by work, not capital.
  - generalizations 6y ago
    And yet people will still look for places to store wealth. All this would do is create more complex forms of money laundering.
    - cycomanic 6y ago
      So you actually agree a wealth tax is a good thing, your argument is just, "we can't make it perfect we should not do it at all" That's not a helpful argument because it is so general that we can bring it up against anything. I'm very certain you don't follow this principle in real life either.
      - generalizations 6y ago
        > So you actually agree > I'm very certain you don't follow Don't say what I think for me. It's condescending, makes you look like you're more interested in cheap points, and suggests that you can't actually come up with an intellectual response. I don't think it's a good thing; I think it's better to address the root of the problem rather than the symptom; and it's worth noting when a course of action isn't going to work. Otherwise you fall prey to the classic mockery: "we need to do something! This is something. We should do it."
        grey-area 6y ago
        Well you’re certainly living up to your username today ;) All taxes are avoided to some extent but assets are actually easier to tax in many ways than income. If you want to have money and things it’s hard to hide that, whereas if you have capital you don’t even need income and can easily avoid taxes on it.
- aqme28 6y ago
  I don't understand this argument. You're framing it as though it's a choice between the government and yourself. Of course you're going to use that money more effectively for your own interests. The problem is that it's not "you," it's the ultrawealthy, and their interests do not align with yours. While you're right that government accountability isn't perfect, at least there's an attempt at it.
  - mcphage 6y ago
    > While you're right that government accountability isn't perfect, at least there's an attempt at it. But see, with the ultrawealthy, there's someone we can hold accountable. For instance, if Jeff Bezos isn't doing his part, we could just... ...hmm. Oh, right! We could tax him more. Wait, not that!
- seer 6y ago
  Not that I’m advocating it or anything, but if we took an equitable amount of money from everyone, and then burned it in a pit, might be better to society in general. Democracy, well most human social structures really, live on trust. Trust that we are all in it together and are better of participating in it. When people start to perceive that others are taking advantage of them, unfairly, the social structure starts to crumble. Even if that advantage is then used to your benefit, the perception of it matters most. In times past we’ve been “fixing” this by shaping the perception, manipulating people into believing that whatever way of government is used is good for them. Then silencing any doubters. In the 21 century its becoming harder to do that outright, because information is so readily available, so they have resorted to reducing its signal to noise ratio (fake news etc). In any case, perception is key. If “the rich” (they) are treated better than “us”, and they are not supposed to, then you start having cracks in the fabric of society. The appeal for something like wealth tax is not that it would make it better for everyone in the long run, but rather it would be perceived as more fair and lead to less discontent. Weather thats a good trade is up for debate though, you could always hire more cops to “enforce the peace”
- drewrv 6y ago
  There are countless examples of wasteful or pointless government programs, and countless successes too. This article feels pretty specific to me though. It’s saying the federal stimulus in the spring was mostly successful, however the situation is still ongoing and the federal government isn’t likely to act again. Therefore it’s up to the state to do something similar, and the state can afford it by raising taxes on capital gains. I personally know people that were saved by the $1,200 earlier this year. Waitstaff, retail workers, even some healthcare workers. This is a clear example of “we are part of the way there and need more funding”. The vaccines are being manufactured, we just need to give people more time. > Without addressing the actual root causes of inequity, distributing... funds will amount to little more than an invitation to use force to take from the haves and deign to the have-nots I’m curious what you think the causes of inequality are? Picketty makes a strong case that it’s caused by the fact that wealth grows more wealth at a faster rate than labor grows wealth. In which case a wealth tax or capital gains tax would cut right to the heart of inequality.
  - sova 6y ago
    A perpetual stimulus or a guaranteed income would certainly solve a lot of problems for all. Even though it will likely often trickle up to the landlords, it will enable a lot more freedom and economic output, and it does not have to be a fixed value for everyone, it could adjust based on income, a Guaranteed Progressive Income [0]. But what does that have to do with a wealth tax? I don't think the two are as connected as people would like to believe. To use a naturalist's metaphor, wealth comes from having seeds and trees, with orchards bearing fruit. There are people with some trees and plenty of seeds to keep sowing, and there are some people with no seeds and simply waiting on the receipt of fruit. There is likely enough creative output thanks to the endeavors of prior generations to create enough orchards for us that handing out decent fruit rations would be great with little negative consequence, but wealth comes from planting and nurturing new seeds to grow new trees to create new fruit. In short, if we could empower people to start their own endeavors that could blossom fruitfully, that would be a better strike at the heart of inequality than simply shaking bear some trees at the more fecund and productive orchards. Picketty is not wrong, but that sounds more like oak trees and their ability to propagate thanks to squirrels running off with the nuts and burying them far and wide than some sort of ontological argument about society. While a GPI (Guaranteed Progessive Income) will help, we need to focus on creating the causes for our own orchards, our own wealth. If someone else's presence of wealth prevents one's success, then maybe it is time for intervention, such as in the new era of logical and necessary Anti-Trust suits, but if the only obstacle is not having enough resources to start with (education, capital, knowhow, access to resources) it is difficult to see how shaking apples off another's tree will increase or improve those things directly. What's the ideal world? What's the ideal result? Perhaps we can work backwards from the Utopia we want to have, rather than incrementally towards a swamp of disincentives that counteract original aims. [0] https://satisologie.substack.com/p/guaranteed-progressive-income https://satisologie.substack.com/p/guaranteed-progressive-in...
- titzer 6y ago
  > is predicated on the assumption that: the government can use your dollar more effectively than you can at creating an equitable [wild, wild] world. When you realize the "you" isn't you as an individual--a middle, or upper-middle class person who might see another dollar in taxation--but the "you" is mega corporations and billionaires who only use their money in pursuit of more profit and building walled gardens to keep the grubby masses away, that might soften this hard-line libertarian view a bit. Corporations are soulless and amoral. And they have been caught time and time again sacrificing people's livelihoods, health and safety, mental and physical, to their bottom line. Corporations are also responsible for the vast majority of pollution on this planet and produce 100% of the trash littering the oceans. (you won't find a mom&pop's root beer can floating out there, anywhere). In general I've found that my 20s libertarian view was highly biased to an underlying assumption that my experience is typical, and that the only thing that needed fixing was getting the government out of "my" life and wallet, and that everything would just magically follow from my own personal freedom. The reality is that every one of these typical people are very small fish buffeted and cajoled by advertising and the abusive power of rich people.
- anemoiac 6y ago
  Is there any reason to not read this as “we can’t have a more equitable society unless the market happens to create one?” On a related note, why does it seem as if some countries (all of Western Europe, for example) have managed to create more equitable societies using government policies?
stevenalowe 6y ago
Several paragraphs of emotional appeal attempting to support a jealousy tax that would be easily avoided and ineffective. Pass.
- tt433 6y ago
  Yeah just because criminals do crimes and avoid prosecution, we should give up prosecuting crimes. Schools can build themselves.
  - xyzzyz 6y ago
    I mean, I’m not sure your crime prosecution analogy works all that great considering how many times this year we’ve heard about defunding the police, and in how many cities the local prosecutors have been executing policy precisely of giving up prosecuting crime.
    - tt433 6y ago
      They're at least explicitly saying out loud what some of their choices about not prosecuting are. Most of the time the thought that goes into those decisions isn't shared with the public. The prosecutor has a wide degree of independence, and they are always accountable to someone. Even prosecutors who aren't "progressive" choose not to prosecute some crimes, to litigate everything would be ridiculous and counter productive to the business of government and commerce. My guess is your hair is on end because of a prosecutor(s) who was installed by the public.
- AndrewBissell 6y ago
  Every year Forbes publishes a list of the wealthiest people in the world with a number next to their name. If Forbes can do it I'm sure a properly staffed and funded IRS could too.
  - missedthecue 6y ago
    Finding their name isn't their hard part. Calculating their assets is. Imagine the following I own a $100M building outright that I rent to tenants (say an office building) - it's illiquid with a thin market and I can't just move a building. So let's say I do this: I enter into a terminally settled, non-transferable, future-callable, sale-leaseback with a partial-repo feature, with an overseas bank. The mechanics are this: I 'sell' the building to, say, Nomura in Japan. This is the 'sale', but I don't take any cash. Instead, Nomura agrees to a 999-year lease where I can operate the building and the rent payments are settled via the sale proceeds I never received - this is the terminally settled part. I rent to tenants and keep the net operating profit. 'Future-callable' means I can undo this in the future; 'repoed' means that if I need some of the money that Nomura is holding from the proceeds, I can get it back in part. You say, "but the operating lease has value!" - but does it? Its non-transferable, so it has no market value whatsoever, and I can zero the economics of it so it has no model value; you can't value that using any generally accepted measure. There are some detailed complicating factors in this example, but they can be sorted out; importantly, transactions like this are fairly common for (completely legal) reasons. The main thing I have done is taken the building out of my calculation of 'wealth' - I would have owed 6% times $100M, but now I don't 'have' a $100M building to tax - Nomura has the building, and they're in Japan. I will owe either income tax or corporation tax, but I would have owed that anyway. Wealth tax zeroed. Now multiply this by literally tens of thousands of millionaires and their respective assets. At some point, the cost of extracting the tax is more than the receipts collected! And this doesn't even touch on the fact that there are many asset rich, cash poor people. For instance if you own $25 million in shares in a pre-ipo unicorn, and you're making $175k in salary per year, where are you going to cough up the millions annually to afford the tax? These are real problems and it appears that the sole motivation why some want a wealth tax is not because it makes sense by any economic or policy standard, or that it might improve the lot of the man lesser-off, but because they want to make other people poorer. Full stop. And that seems to me to be a morally toxic and ideologically disgusting criteria for developing law.
just-juan-post 6y ago
An alternative to raising taxes is to decrease spending.
- blargmaster42_8 6y ago
  That's Nazi talk
- xyzzyz 6y ago
  Collecting revenues is not the point of wealth taxes. These are explicitly meant to punish success at getting wealthy.
  - Dylan16807 6y ago
    The "punishment" of being slightly less rich is not a punishment. Revenue is the point. Or, more specifically, lowering the tax burden on the people that can't trivially shrug it off. Also it's possible to be in favor of reduced spending and a wealth tax, so that certain other taxes can be double decreased.
    - xyzzyz 6y ago
      > Or, more specifically, lowering the tax burden on the people that can't trivially shrug it off. If you look at the estimates of the actual revenues obtained from wealth tax, you’ll see that they are laughably low compared to total tax receipts, and as such will not reduce the tax burden on anyone in any meaningful way.
- 0xy 6y ago
  Both the left and right throw cash at their pet projects with no accountability and no standards of success. When voting, you vote for where the cash firehose gets pointed. You never vote to taper off the firehose.
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throwawaysea 6y ago
So someone can play by the rules, pay all the taxes as they go, and then suddenly have what they’ve already earned confiscated under threat of government force? I feel like that’s normalizing a world without private ownership of anything. After all, a wealth tax would mean that the government can change its mind and seize what you own retroactively at any time. What separates such a “free” society from the CCP? This is the opposite of moral. Not to mention, with the government’s famous lack of efficiency and accountability, all the stolen wealth wouldn’t accomplish much. And once the one-time cash grab is spent, what are they going to do next? Why would the next wave of builders trust in an environment and government that could take away what they’ve worked hard to build and earn?
- onlyrealcuzzo 6y ago
  Property tax was one of the first taxes, and property was essentially the major form of wealth from the advent of property rights until the last 100 years. We have always had a wealth tax -- albeit not federally.
  - throwawaysea 6y ago
    I disagree with property taxes as well. It is perverse because it means you can play the game (economically) based on one set of incentives, devoting your best years to some effort, only to have the fruits of your efforts taken away after the fact. It is simply not compatible with the notion of private ownership. And yes, home ownership with property taxes means you don't really own that property in a true sense.
fspeech 6y ago
Estate tax is an accepted way of taxing wealth.
- jeffbee 6y ago
  So are property taxes. We already have tons of wealth taxes.
markdown 6y ago
A land value tax would be far superior. I strongly recommend everyone read Henry George's Progress and Poverty. I don't think there's a better way out there to solve this problem. https://www.gutenberg.org/ebooks/55308 https://www.gutenberg.org/ebooks/55308
Hokusai 6y ago
I agree with the article, but a wealth tax would not only increase revenue to pay for health care, education and other social benefits, it will also reduce corruption. There is a point that money is not used anymore to purchase services and goods but it is just raw power. Let money accumulate and an oligarchy will run your town, city or country. Capitalism needs many business to compete to be effective, duopolies and other concentrations of power will kill capitalism. Tax the mega rich if you want a capitalist USA, because the alternative is an oligarchy running your business and a death sentence for the USA competitiveness.
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hpoe 6y ago
So to me the whole argument around inequality seems like a red herring simply because it focuses not on absolute improvement but relative comparison, feels a bit like a crab in the bucket mentality to me. Now I understand the argument of why should so and so have $5 billion when other people are starving or can't afford their medicine, but to me that is a problem around people not having access to healthcare or food which seems incredibly orthogonal to how much money Jeff Bezos has. I just don't get it, the whole idea of economic inequality to me seems like it is just trying to avoid talking about real issues. I mean sure wealth was more equitably distributed in fudeal europe but I'd much rather live now. As long as the absolute standard of living is generally rising why does inequality matter? Genuinely would love to hear the reasoning behind this.
- fh973 6y ago
  It isn't orthogonal anymore when it comes to housing. Money seeks returns and uses private housing as an investment vehicle.
- silexia 6y ago
  I think we can all agree the tax system in most countries is very unfair. My suggestion to make it fair is to simply abolish all taxes in nations with sovereign currencies. The government just prints the money it needs for it's budget each year and uses it. Inflation is basically your tax rate and everyone can look at the government budget and plan accordingly. This has the added benefit of getting rid of the entire redundant industry of tax CPAs and tax lawyers, freeing hundreds of thousands of smart people to actually produce new wealth in the economy. It makes all illegal activities taxed just like legal activities. It combines all the benefits people are wishing for when they promote a flat tax or wealth tax or simpler taxes into one easy system. Even a child could understand this tax code intuitively.
  - samatman 6y ago
    I've considered this as well. It has one big problem, which is huge headaches around lending at interest. This is surmountable if the rate of issuance is reasonably predictable, but compound interest is already difficult for many people to understand, this would make it worse. The problem that eventually the numbers get silly isn't a problem, because, first of all, it happened: a coke should cost a nickel, not a buck. Second, just drop a zero from time to time, easy, and an opportunity to change up the look of the currency.
andrewflnr 6y ago
Stop regressive taxes, stop letting capital gains off the hook, yeah, these are all good. But I can't help but think that if you start from the phrase "wealth tax" rather than any specific injustice, the result will be something stupid that complicates tax code for at best marginal benefit. Maybe this is another case of leftists self-sabotaging with the names they pick for their movements, but I'm pessimistic. Hint: if your policy contains a dollar-amount cutoff, you're already off the rails.
etaioinshrdlu 6y ago
Maybe we could fully replace income tax with a flat wealth tax. It might lead to better social mobility. The trend of the phrase "wealth tax" being effectively an untouchable third rail is quite silly to me -- it does not inherently mean higher taxes at all.
zpeti 6y ago
How about first we try and get back to actual capitalism? Like the stuff where the rich actually go bankrupt when their businesses fail, or where bankers go to jail for defrauding their customers? Believe it or not when a business goes bust often the jobs don’t disappear, you just get new owners (which sometimes, though rarely can be the employees themselves), and the rich get poorer. I’m not on the left but I agree with the left that right now it’s capitalism for you and socialism for he rich. But that’s because of government intervention, and bailouts, and keeping the status quo in place. That’s why the rich keep getting richer. It’s with government help and regulations. More government, and more taxes will only make it worse. You can’t make something better with more of a bad thing.
spinny 6y ago
The problem is not other people money. It's lazy broke bums attempting to take other people's money
topkai22 6y ago
I don't find the article very convincing, so let me try to give a different argument. Governments need money to perform the duties they've been assigned. The costs of the duties assigned to them tend to go up during times of economic crisis (especially social safety net measures, but even public safety and education costs go up), while revenues tend to go down. Different taxation regimes exaberate or smooth this descrepancy in different circumstances. Right now states with largely property tax based revenue streams are probably doing comparatively well, where a state like Nevada, which is dependent on sales tax and entertainment tax revenue is really hurting. Diversifying the tax base to include a wealth tax has the same benefit that diversification does elsewhere - it increases resialancy of the tax system to any one type of shock, which allows governments to continue providing services when they are needed most. Now there is also a moral element to the progressive (paid more by the rich as a portion of assets) nature of a wealth tax versus the regressive nature of sales taxes (paid more by the poor as a percentage of income), and that is also worth considering, as are the practical and moral considerations that a wealth tax would likely have negative economic effects. However, right now in a period of crisis I find the main moral question to be “how can society live up to its existing obligations (explicit and implied)” and how can we ensure we do so in the future. A diversification of the tax structure (via a wealth or capital gains tax) can help with that, and therefore there is a decent moral case for pursuing such, outside of distribution questions.
erostrate 6y ago
I find it strange how many prefer to preserve a system where the 400 richest billionaires own more wealth than the poorest 150 million citizens (3200 billions), rather than see 1% of this wealth wasted by government inefficiencies. "Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.”
- loraa 6y ago
  Because the government is corrupt and proven to be bad with money.
glerk 6y ago
France experimented with a wealth tax for a few years until they decided to scrap it after they realized it resulted in _lost_ tax revenue [1]. Morality aside, every billionaire probably has the resources to retain a few lawyers and tax accountants and find a loophole to avoid this, or failing that, move to a more billionaire friendly country (and there is no shortage of those). [1] https://www.npr.org/sections/money/2019/02/26/698057356/if-a-wealth-tax-is-such-a-good-idea-why-did-europe-kill-theirs https://www.npr.org/sections/money/2019/02/26/698057356/if-a...
akamaka 6y ago
This article is not really worthy of Hacker News. We already have a tax system that is designed to do a fair amount of wealth redistribution. That moral argument was fought and largely won a long time ago. Now, that system certainly needs tweaking, and the technical details of that are worth discussing. What is the optimal amount of money that can be taxed from the wealthy before we suffer consequences like capital flight or low private investment into the economy? Throwing around “wealth tax” as a slogan to argue over is not going to bring about that constructive discussion, though.
babesh 6y ago
Common arguments for a wealth tax that I have heard (some are moral values). --- (Utility) - some people are poor - some people are wealthy We can take some of that wealth and help the poor --- (Equity) There shouldn't be much wealth inequality because inequality is inherently bad. --- (Corruption) Wealth as a form of power converts into political power which accumulates more wealth. --- (Fairness) It is easier to accumulate wealth if you are already wealthy. Therefore the rich get richer and the poor get poorer. --- (Community) The wealth that we create is built upon the preexisting wealth created by others before us and by the community we live in. Therefore, should part of the wealth we create be shared communally? The arguments for wealth tax don't usually take into account - wealth accumulation as a driver for increasing wealth for everyone (even if it increases inequality) - whether government is an efficient means of redistributing wealth - whether there are moral arguments against wealth redistribution as a form of coercion As is often the case in history, this argument will probably not be decided by reason but by power.
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loraa 6y ago
Sadly too many people think they will get free houses, money and cars from this without having to work. After driving past community housing to see all the new model BMWs all the welfare people have, it seems lots of people will always continue to make bad decisions.
blackrock 6y ago
LOL. The flaw in this reasoning, is in assuming that the rich have any morals to begin with.
apta 6y ago
The less taxes the better. Islam has solved this problem over 1400 years ago, no income taxes, no land tax, no property tax, etc. If more societies applied something similar to Islam's Zakat, we'd be much better off.
amai 6y ago
related: Davos 2019: Historian Rutger Bregman berates billionaires at World Economic Forum over tax avoidance https://www.youtube.com/watch?v=r5LtFnmPruU https://www.youtube.com/watch?v=r5LtFnmPruU
nojvek 6y ago
One actionable thing is capital gains tax is way too low. 5% is very little. That’s how the top 1% make money. It should be the same as what the bottom 90% pay. Income tax at federal level should be same as capital gains tax. Obviously this would be very hard to pass through Congress as that’s how the senators also make most of their gains.

48 points by voisin 6y ago

sova 6y ago

The assumption that a "wealth tax" will lead to a more equitable system is predicated on the assumption that: the government can use your dollar more effectively than you can at creating an equitable [wild, wild] world. "It is very easy to dream about how to give away other people's money," as a cynic on youtube recently commented. But to look to the government as some sort of Arbiter of Fairness, as Thomas Sowell might say "Cosmic Justice," is very naive. The government has no one person you can point to and hold accountable, but when you look in the mirror there is definitely someone who fits that description. I do not think the solution to a more equitable society is greater taxation, because typically, the wealthy will not have it (and will do all in their power to prevent it), and the tax dollars already at play have yet to achieve it. Were it the case that we were part of the way there and simply needed more funding, the argument might have merit, but the fact remains that many points of access are not equal and it does not come down to simple taxation, the problem is a societal, individual, collective, and motivational one. Without addressing the actual root causes of inequity, distributing -or "redistributing" as people like to say- funds will amount to little more than an invitation to use force to take from the haves and deign to the have-nots, without creating any meaningful method of creating more value or unlocking more creativity in between.

aiscapehumanity 6y ago
Proposing a counter argument that's a non-solution is all this is.
- sova 6y ago
  If a group of toddlers gets their cat is stuck in a tree, calling the largest toddler over to fetch it will also not work. We have to be more creative than resorting to brutalist means. True, I did not offer a solution, but if I suggested that roads 1 and 2 are not correct, where is the man to show me roads 3 and 4?
senthil_rajasek 6y ago
"assumption that a 'wealth tax' will lead to a more equitable system" Where is this assumption stated? I always thought Wealth Tax was to prevent concentration of wealth.
- chucknthem 6y ago
  If not for more equitable society, what's wrong with concentration of wealth?
  - edoceo 6y ago
    Lots of hand wavy things and also the presumption that wealth must have come at some undue cost to others (eg low wages)
  - drewrv 6y ago
    Wealth begets power. We have checks in place for political power (term limits, separate branches of government). We have restrictions on arms (tanks, anti-aircraft guns).
- vermilingua 6y ago
  Preventing concentration of wealth... to what end, are you assuming? “Where is this assumption stated?” makes nearly no sense when you’re talking about a worldwide political discourse.
- andrewflnr 6y ago
  Preventing concentration of wealth can only be valuable if it leads to a more equitable system. Otherwise it would have the same moral weight as preventing oversized dirt clods.
  - senthil_rajasek 6y ago
    Preventing concentration of wealth is more valuable than preventing oversized dirt clods. It prevents concentration of power.
handmodel 6y ago
Property tax is already a form of a wealth tax. The estate tax was a one-time wealth tax. It is true that wealthy people do get around many rules but that is not a reason to not have a property tax or to never have an estate tax tax - largely they still pay as paying a lot to move money around is often times not worth it. The government doesn't have to use your "dollar more effectively than you" if you have different goals. If the government wants to build a school and you don't want a school you don't get to choose not to pay taxes for the school. Other than just increasing the national debt (which I'm for) we tax people. A wealth tax would be a way to either increase revenue to increase spending OR increase revenue so that other forms of revenue can be cut.
- starik36 6y ago
  > increasing the national debt (which I'm for) Sigh. Let's kick the can down the road some more.
  - beamatronic 6y ago
    If 2008 taught us anything, the money printer solves all problems. It’s all imaginary anyway.
    - medium_burrito 6y ago
      money printer go brrrrrrrrrrrrrrrrrr
      - RickJWagner 6y ago
        I see that often at 'Bogleheads.org'. Is it a cultural reference from somewhere?
    - torstenvl 6y ago
      That is a terrible take-away from 2008. Are you accounting for any of the (gestures broadly) terrible consequences of that course of action?
brundolf 6y ago
> The assumption that a "wealth tax" will lead to a more equitable system is predicated on the assumption that: the government can use your dollar more effectively than you can at creating an equitable [wild, wild] world. If the money is directly redistributed to those who need it, how is that the government deciding how it should be used? Personal responsibility is well and good - we should all aspire to be more charitable - but it's become clear that it doesn't scale. Free-market capitalism is specifically designed to decouple the seeking of profit from the real-world consequences of that activity. This is what makes it so powerful, and also why it can be so destructive. It should be no surprise to us that a system designed to simplify and abstract people's relationship with society ends up eroding things like empathy and social consciousness. If you ask me, human society can't effectively scale to this level at all. But here we are, and burying our heads in the sand when it comes to clear and present (and deepening) issues is foolishness.
- sova 6y ago
  >If the money is directly redistributed to those who need it, how is that the government deciding how it should be used? When has this ever happened in the history of mankind? As soon as the government gets cash, when is it "redistributed?" Aside from 1) waiting on charity from the rich or 2) forcing people to yield more of their resources to the government that may or may not [history leans to not] do what you suggest, there is likely a plethora of ways, at the very least a third way. I'm not saying don't give people money, but I am saying it's naive to assume the government can do it. Demanding that we involve government is similar to children demanding parents come resolve their disputes and affairs. There must be a way forward without resorting to shouting "mom! dad!"
  - brundolf 6y ago
    > When has this ever happened in the history of mankind? It happened across the world this year, in response to the pandemic. People in several countries were given enough money to make up for lost income. And even in the U.S. people were given a (comparatively paltry, but not insignificant) stimulus check. Beyond that: universal basic income has been discussed and trialed quite a bit. As a permanent fixture of society I'm not yet sold on it, but as a temporary measure to stave off some of our acutely-deepening inequality, I think it would be a simple and direct (indeed, maybe the most literal) form of wealth redistribution. That's not to say I don't think the government can spend some of the money on society better than our billionaires will (who, with few exceptions, simply don't spend their money on society at all). But I also don't think wealth redistribution has to assume that.
groceryheist 6y ago
What's the root cause of inequality? There are certainly historical causes of inequality (e.g. slavery, feudalism, colonialism). These root causes are largely in the past, though they have modern residues (e.g. racism, sexism, western chauvinism) which contribute to inequaliy. I think they are often less important than how already existing inequality is amplified by cumulative advantage dynamics (the rich get richer). A wealth tax directly reduces the amplification and wealth can be redistributed to reduce inequality (not just of wealth, but of education, skills, and status too) on the other end.
- seibelj 6y ago
  The root cause of wealth inequality is that some people value accumulating wealth more than others. At the working class level it’s some people taking jobs cleaning sewers vs. mopping floors. Without inequality no one would do the “dirty” jobs.
  - Dylan16807 6y ago
    "Some people will do less pleasant jobs for more pay" is a very tiny fraction of inequality. It's technically a root cause but not one of the big problem ones. For the most part, once you add in the other factors, the dirtier jobs pay you worse!
    - seibelj 6y ago
      I could not disagree with you more. If you want to do back-breaking labor for equal money as cushy jobs, be my guest. But my experience is that the difficulty, skill, and (gasp!) risk of a job determines how well it’s compensated. If you want to imagine that all jobs can pay equally well, enjoy the ruination of your country if your preferred political party ever manages to seize power.
      - Dylan16807 6y ago
        Cushy jobs pay much more than labor jobs! > If you want to imagine that all jobs can pay equally well That's not what I said at all. I said that harder jobs paying more is NOT the problem. I don't want all jobs to pay the same. I'm happy with some jobs paying ten times as much as other jobs. But there's a limit to overall inequality before problems start to happen.
grey-area 6y ago
Nope. It’s predicated on the observation that the rate of return on capital exceeds the rate of economic growth. Taxing income is perverse and disincentivizes work. Taxing capital makes a lot more sense IMO. Income you get by working. Capital you get by inheriting, saving or by having capital, which earns you more. To be clear I think capital is good and necessary but I see no reason why work should be taxed more. Wealth is created by work, not capital.
- generalizations 6y ago
  And yet people will still look for places to store wealth. All this would do is create more complex forms of money laundering.
  - cycomanic 6y ago
    So you actually agree a wealth tax is a good thing, your argument is just, "we can't make it perfect we should not do it at all" That's not a helpful argument because it is so general that we can bring it up against anything. I'm very certain you don't follow this principle in real life either.
    - generalizations 6y ago
      > So you actually agree > I'm very certain you don't follow Don't say what I think for me. It's condescending, makes you look like you're more interested in cheap points, and suggests that you can't actually come up with an intellectual response. I don't think it's a good thing; I think it's better to address the root of the problem rather than the symptom; and it's worth noting when a course of action isn't going to work. Otherwise you fall prey to the classic mockery: "we need to do something! This is something. We should do it."
      - grey-area 6y ago
        Well you’re certainly living up to your username today ;) All taxes are avoided to some extent but assets are actually easier to tax in many ways than income. If you want to have money and things it’s hard to hide that, whereas if you have capital you don’t even need income and can easily avoid taxes on it.
aqme28 6y ago
I don't understand this argument. You're framing it as though it's a choice between the government and yourself. Of course you're going to use that money more effectively for your own interests. The problem is that it's not "you," it's the ultrawealthy, and their interests do not align with yours. While you're right that government accountability isn't perfect, at least there's an attempt at it.
- mcphage 6y ago
  > While you're right that government accountability isn't perfect, at least there's an attempt at it. But see, with the ultrawealthy, there's someone we can hold accountable. For instance, if Jeff Bezos isn't doing his part, we could just... ...hmm. Oh, right! We could tax him more. Wait, not that!
seer 6y ago
Not that I’m advocating it or anything, but if we took an equitable amount of money from everyone, and then burned it in a pit, might be better to society in general. Democracy, well most human social structures really, live on trust. Trust that we are all in it together and are better of participating in it. When people start to perceive that others are taking advantage of them, unfairly, the social structure starts to crumble. Even if that advantage is then used to your benefit, the perception of it matters most. In times past we’ve been “fixing” this by shaping the perception, manipulating people into believing that whatever way of government is used is good for them. Then silencing any doubters. In the 21 century its becoming harder to do that outright, because information is so readily available, so they have resorted to reducing its signal to noise ratio (fake news etc). In any case, perception is key. If “the rich” (they) are treated better than “us”, and they are not supposed to, then you start having cracks in the fabric of society. The appeal for something like wealth tax is not that it would make it better for everyone in the long run, but rather it would be perceived as more fair and lead to less discontent. Weather thats a good trade is up for debate though, you could always hire more cops to “enforce the peace”
drewrv 6y ago
There are countless examples of wasteful or pointless government programs, and countless successes too. This article feels pretty specific to me though. It’s saying the federal stimulus in the spring was mostly successful, however the situation is still ongoing and the federal government isn’t likely to act again. Therefore it’s up to the state to do something similar, and the state can afford it by raising taxes on capital gains. I personally know people that were saved by the $1,200 earlier this year. Waitstaff, retail workers, even some healthcare workers. This is a clear example of “we are part of the way there and need more funding”. The vaccines are being manufactured, we just need to give people more time. > Without addressing the actual root causes of inequity, distributing... funds will amount to little more than an invitation to use force to take from the haves and deign to the have-nots I’m curious what you think the causes of inequality are? Picketty makes a strong case that it’s caused by the fact that wealth grows more wealth at a faster rate than labor grows wealth. In which case a wealth tax or capital gains tax would cut right to the heart of inequality.
- sova 6y ago
  A perpetual stimulus or a guaranteed income would certainly solve a lot of problems for all. Even though it will likely often trickle up to the landlords, it will enable a lot more freedom and economic output, and it does not have to be a fixed value for everyone, it could adjust based on income, a Guaranteed Progressive Income [0]. But what does that have to do with a wealth tax? I don't think the two are as connected as people would like to believe. To use a naturalist's metaphor, wealth comes from having seeds and trees, with orchards bearing fruit. There are people with some trees and plenty of seeds to keep sowing, and there are some people with no seeds and simply waiting on the receipt of fruit. There is likely enough creative output thanks to the endeavors of prior generations to create enough orchards for us that handing out decent fruit rations would be great with little negative consequence, but wealth comes from planting and nurturing new seeds to grow new trees to create new fruit. In short, if we could empower people to start their own endeavors that could blossom fruitfully, that would be a better strike at the heart of inequality than simply shaking bear some trees at the more fecund and productive orchards. Picketty is not wrong, but that sounds more like oak trees and their ability to propagate thanks to squirrels running off with the nuts and burying them far and wide than some sort of ontological argument about society. While a GPI (Guaranteed Progessive Income) will help, we need to focus on creating the causes for our own orchards, our own wealth. If someone else's presence of wealth prevents one's success, then maybe it is time for intervention, such as in the new era of logical and necessary Anti-Trust suits, but if the only obstacle is not having enough resources to start with (education, capital, knowhow, access to resources) it is difficult to see how shaking apples off another's tree will increase or improve those things directly. What's the ideal world? What's the ideal result? Perhaps we can work backwards from the Utopia we want to have, rather than incrementally towards a swamp of disincentives that counteract original aims. [0] https://satisologie.substack.com/p/guaranteed-progressive-income https://satisologie.substack.com/p/guaranteed-progressive-in...
titzer 6y ago
> is predicated on the assumption that: the government can use your dollar more effectively than you can at creating an equitable [wild, wild] world. When you realize the "you" isn't you as an individual--a middle, or upper-middle class person who might see another dollar in taxation--but the "you" is mega corporations and billionaires who only use their money in pursuit of more profit and building walled gardens to keep the grubby masses away, that might soften this hard-line libertarian view a bit. Corporations are soulless and amoral. And they have been caught time and time again sacrificing people's livelihoods, health and safety, mental and physical, to their bottom line. Corporations are also responsible for the vast majority of pollution on this planet and produce 100% of the trash littering the oceans. (you won't find a mom&pop's root beer can floating out there, anywhere). In general I've found that my 20s libertarian view was highly biased to an underlying assumption that my experience is typical, and that the only thing that needed fixing was getting the government out of "my" life and wallet, and that everything would just magically follow from my own personal freedom. The reality is that every one of these typical people are very small fish buffeted and cajoled by advertising and the abusive power of rich people.
anemoiac 6y ago
Is there any reason to not read this as “we can’t have a more equitable society unless the market happens to create one?” On a related note, why does it seem as if some countries (all of Western Europe, for example) have managed to create more equitable societies using government policies?

stevenalowe 6y ago

Several paragraphs of emotional appeal attempting to support a jealousy tax that would be easily avoided and ineffective. Pass.

tt433 6y ago
Yeah just because criminals do crimes and avoid prosecution, we should give up prosecuting crimes. Schools can build themselves.
- xyzzyz 6y ago
  I mean, I’m not sure your crime prosecution analogy works all that great considering how many times this year we’ve heard about defunding the police, and in how many cities the local prosecutors have been executing policy precisely of giving up prosecuting crime.
  - tt433 6y ago
    They're at least explicitly saying out loud what some of their choices about not prosecuting are. Most of the time the thought that goes into those decisions isn't shared with the public. The prosecutor has a wide degree of independence, and they are always accountable to someone. Even prosecutors who aren't "progressive" choose not to prosecute some crimes, to litigate everything would be ridiculous and counter productive to the business of government and commerce. My guess is your hair is on end because of a prosecutor(s) who was installed by the public.
AndrewBissell 6y ago
Every year Forbes publishes a list of the wealthiest people in the world with a number next to their name. If Forbes can do it I'm sure a properly staffed and funded IRS could too.
- missedthecue 6y ago
  Finding their name isn't their hard part. Calculating their assets is. Imagine the following I own a $100M building outright that I rent to tenants (say an office building) - it's illiquid with a thin market and I can't just move a building. So let's say I do this: I enter into a terminally settled, non-transferable, future-callable, sale-leaseback with a partial-repo feature, with an overseas bank. The mechanics are this: I 'sell' the building to, say, Nomura in Japan. This is the 'sale', but I don't take any cash. Instead, Nomura agrees to a 999-year lease where I can operate the building and the rent payments are settled via the sale proceeds I never received - this is the terminally settled part. I rent to tenants and keep the net operating profit. 'Future-callable' means I can undo this in the future; 'repoed' means that if I need some of the money that Nomura is holding from the proceeds, I can get it back in part. You say, "but the operating lease has value!" - but does it? Its non-transferable, so it has no market value whatsoever, and I can zero the economics of it so it has no model value; you can't value that using any generally accepted measure. There are some detailed complicating factors in this example, but they can be sorted out; importantly, transactions like this are fairly common for (completely legal) reasons. The main thing I have done is taken the building out of my calculation of 'wealth' - I would have owed 6% times $100M, but now I don't 'have' a $100M building to tax - Nomura has the building, and they're in Japan. I will owe either income tax or corporation tax, but I would have owed that anyway. Wealth tax zeroed. Now multiply this by literally tens of thousands of millionaires and their respective assets. At some point, the cost of extracting the tax is more than the receipts collected! And this doesn't even touch on the fact that there are many asset rich, cash poor people. For instance if you own $25 million in shares in a pre-ipo unicorn, and you're making $175k in salary per year, where are you going to cough up the millions annually to afford the tax? These are real problems and it appears that the sole motivation why some want a wealth tax is not because it makes sense by any economic or policy standard, or that it might improve the lot of the man lesser-off, but because they want to make other people poorer. Full stop. And that seems to me to be a morally toxic and ideologically disgusting criteria for developing law.

just-juan-post 6y ago

An alternative to raising taxes is to decrease spending.

blargmaster42_8 6y ago
That's Nazi talk
xyzzyz 6y ago
Collecting revenues is not the point of wealth taxes. These are explicitly meant to punish success at getting wealthy.
- Dylan16807 6y ago
  The "punishment" of being slightly less rich is not a punishment. Revenue is the point. Or, more specifically, lowering the tax burden on the people that can't trivially shrug it off. Also it's possible to be in favor of reduced spending and a wealth tax, so that certain other taxes can be double decreased.
  - xyzzyz 6y ago
    > Or, more specifically, lowering the tax burden on the people that can't trivially shrug it off. If you look at the estimates of the actual revenues obtained from wealth tax, you’ll see that they are laughably low compared to total tax receipts, and as such will not reduce the tax burden on anyone in any meaningful way.
0xy 6y ago
Both the left and right throw cash at their pet projects with no accountability and no standards of success. When voting, you vote for where the cash firehose gets pointed. You never vote to taper off the firehose.

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throwawaysea 6y ago

So someone can play by the rules, pay all the taxes as they go, and then suddenly have what they’ve already earned confiscated under threat of government force? I feel like that’s normalizing a world without private ownership of anything. After all, a wealth tax would mean that the government can change its mind and seize what you own retroactively at any time. What separates such a “free” society from the CCP? This is the opposite of moral. Not to mention, with the government’s famous lack of efficiency and accountability, all the stolen wealth wouldn’t accomplish much. And once the one-time cash grab is spent, what are they going to do next? Why would the next wave of builders trust in an environment and government that could take away what they’ve worked hard to build and earn?

onlyrealcuzzo 6y ago
Property tax was one of the first taxes, and property was essentially the major form of wealth from the advent of property rights until the last 100 years. We have always had a wealth tax -- albeit not federally.
- throwawaysea 6y ago
  I disagree with property taxes as well. It is perverse because it means you can play the game (economically) based on one set of incentives, devoting your best years to some effort, only to have the fruits of your efforts taken away after the fact. It is simply not compatible with the notion of private ownership. And yes, home ownership with property taxes means you don't really own that property in a true sense.

fspeech 6y ago

Estate tax is an accepted way of taxing wealth.

jeffbee 6y ago
So are property taxes. We already have tons of wealth taxes.

markdown 6y ago

A land value tax would be far superior. I strongly recommend everyone read Henry George's Progress and Poverty. I don't think there's a better way out there to solve this problem. https://www.gutenberg.org/ebooks/55308 https://www.gutenberg.org/ebooks/55308

Hokusai 6y ago

I agree with the article, but a wealth tax would not only increase revenue to pay for health care, education and other social benefits, it will also reduce corruption. There is a point that money is not used anymore to purchase services and goods but it is just raw power. Let money accumulate and an oligarchy will run your town, city or country. Capitalism needs many business to compete to be effective, duopolies and other concentrations of power will kill capitalism. Tax the mega rich if you want a capitalist USA, because the alternative is an oligarchy running your business and a death sentence for the USA competitiveness.

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hpoe 6y ago

So to me the whole argument around inequality seems like a red herring simply because it focuses not on absolute improvement but relative comparison, feels a bit like a crab in the bucket mentality to me. Now I understand the argument of why should so and so have $5 billion when other people are starving or can't afford their medicine, but to me that is a problem around people not having access to healthcare or food which seems incredibly orthogonal to how much money Jeff Bezos has. I just don't get it, the whole idea of economic inequality to me seems like it is just trying to avoid talking about real issues. I mean sure wealth was more equitably distributed in fudeal europe but I'd much rather live now. As long as the absolute standard of living is generally rising why does inequality matter? Genuinely would love to hear the reasoning behind this.

fh973 6y ago
It isn't orthogonal anymore when it comes to housing. Money seeks returns and uses private housing as an investment vehicle.
silexia 6y ago
I think we can all agree the tax system in most countries is very unfair. My suggestion to make it fair is to simply abolish all taxes in nations with sovereign currencies. The government just prints the money it needs for it's budget each year and uses it. Inflation is basically your tax rate and everyone can look at the government budget and plan accordingly. This has the added benefit of getting rid of the entire redundant industry of tax CPAs and tax lawyers, freeing hundreds of thousands of smart people to actually produce new wealth in the economy. It makes all illegal activities taxed just like legal activities. It combines all the benefits people are wishing for when they promote a flat tax or wealth tax or simpler taxes into one easy system. Even a child could understand this tax code intuitively.
- samatman 6y ago
  I've considered this as well. It has one big problem, which is huge headaches around lending at interest. This is surmountable if the rate of issuance is reasonably predictable, but compound interest is already difficult for many people to understand, this would make it worse. The problem that eventually the numbers get silly isn't a problem, because, first of all, it happened: a coke should cost a nickel, not a buck. Second, just drop a zero from time to time, easy, and an opportunity to change up the look of the currency.

andrewflnr 6y ago

Stop regressive taxes, stop letting capital gains off the hook, yeah, these are all good. But I can't help but think that if you start from the phrase "wealth tax" rather than any specific injustice, the result will be something stupid that complicates tax code for at best marginal benefit. Maybe this is another case of leftists self-sabotaging with the names they pick for their movements, but I'm pessimistic. Hint: if your policy contains a dollar-amount cutoff, you're already off the rails.

etaioinshrdlu 6y ago

Maybe we could fully replace income tax with a flat wealth tax. It might lead to better social mobility. The trend of the phrase "wealth tax" being effectively an untouchable third rail is quite silly to me -- it does not inherently mean higher taxes at all.

zpeti 6y ago

How about first we try and get back to actual capitalism? Like the stuff where the rich actually go bankrupt when their businesses fail, or where bankers go to jail for defrauding their customers? Believe it or not when a business goes bust often the jobs don’t disappear, you just get new owners (which sometimes, though rarely can be the employees themselves), and the rich get poorer. I’m not on the left but I agree with the left that right now it’s capitalism for you and socialism for he rich. But that’s because of government intervention, and bailouts, and keeping the status quo in place. That’s why the rich keep getting richer. It’s with government help and regulations. More government, and more taxes will only make it worse. You can’t make something better with more of a bad thing.

spinny 6y ago

The problem is not other people money. It's lazy broke bums attempting to take other people's money

topkai22 6y ago

I don't find the article very convincing, so let me try to give a different argument. Governments need money to perform the duties they've been assigned. The costs of the duties assigned to them tend to go up during times of economic crisis (especially social safety net measures, but even public safety and education costs go up), while revenues tend to go down. Different taxation regimes exaberate or smooth this descrepancy in different circumstances. Right now states with largely property tax based revenue streams are probably doing comparatively well, where a state like Nevada, which is dependent on sales tax and entertainment tax revenue is really hurting. Diversifying the tax base to include a wealth tax has the same benefit that diversification does elsewhere - it increases resialancy of the tax system to any one type of shock, which allows governments to continue providing services when they are needed most. Now there is also a moral element to the progressive (paid more by the rich as a portion of assets) nature of a wealth tax versus the regressive nature of sales taxes (paid more by the poor as a percentage of income), and that is also worth considering, as are the practical and moral considerations that a wealth tax would likely have negative economic effects. However, right now in a period of crisis I find the main moral question to be “how can society live up to its existing obligations (explicit and implied)” and how can we ensure we do so in the future. A diversification of the tax structure (via a wealth or capital gains tax) can help with that, and therefore there is a decent moral case for pursuing such, outside of distribution questions.

erostrate 6y ago

I find it strange how many prefer to preserve a system where the 400 richest billionaires own more wealth than the poorest 150 million citizens (3200 billions), rather than see 1% of this wealth wasted by government inefficiencies. "Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.”

loraa 6y ago
Because the government is corrupt and proven to be bad with money.

glerk 6y ago

France experimented with a wealth tax for a few years until they decided to scrap it after they realized it resulted in _lost_ tax revenue [1]. Morality aside, every billionaire probably has the resources to retain a few lawyers and tax accountants and find a loophole to avoid this, or failing that, move to a more billionaire friendly country (and there is no shortage of those). [1] https://www.npr.org/sections/money/2019/02/26/698057356/if-a-wealth-tax-is-such-a-good-idea-why-did-europe-kill-theirs https://www.npr.org/sections/money/2019/02/26/698057356/if-a...

akamaka 6y ago

This article is not really worthy of Hacker News. We already have a tax system that is designed to do a fair amount of wealth redistribution. That moral argument was fought and largely won a long time ago. Now, that system certainly needs tweaking, and the technical details of that are worth discussing. What is the optimal amount of money that can be taxed from the wealthy before we suffer consequences like capital flight or low private investment into the economy? Throwing around “wealth tax” as a slogan to argue over is not going to bring about that constructive discussion, though.

babesh 6y ago

Common arguments for a wealth tax that I have heard (some are moral values). --- (Utility) - some people are poor - some people are wealthy We can take some of that wealth and help the poor --- (Equity) There shouldn't be much wealth inequality because inequality is inherently bad. --- (Corruption) Wealth as a form of power converts into political power which accumulates more wealth. --- (Fairness) It is easier to accumulate wealth if you are already wealthy. Therefore the rich get richer and the poor get poorer. --- (Community) The wealth that we create is built upon the preexisting wealth created by others before us and by the community we live in. Therefore, should part of the wealth we create be shared communally? The arguments for wealth tax don't usually take into account - wealth accumulation as a driver for increasing wealth for everyone (even if it increases inequality) - whether government is an efficient means of redistributing wealth - whether there are moral arguments against wealth redistribution as a form of coercion As is often the case in history, this argument will probably not be decided by reason but by power.

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loraa 6y ago

Sadly too many people think they will get free houses, money and cars from this without having to work. After driving past community housing to see all the new model BMWs all the welfare people have, it seems lots of people will always continue to make bad decisions.

blackrock 6y ago

LOL. The flaw in this reasoning, is in assuming that the rich have any morals to begin with.

apta 6y ago

The less taxes the better. Islam has solved this problem over 1400 years ago, no income taxes, no land tax, no property tax, etc. If more societies applied something similar to Islam's Zakat, we'd be much better off.

amai 6y ago

related: Davos 2019: Historian Rutger Bregman berates billionaires at World Economic Forum over tax avoidance https://www.youtube.com/watch?v=r5LtFnmPruU https://www.youtube.com/watch?v=r5LtFnmPruU

nojvek 6y ago

One actionable thing is capital gains tax is way too low. 5% is very little. That’s how the top 1% make money. It should be the same as what the bottom 90% pay. Income tax at federal level should be same as capital gains tax. Obviously this would be very hard to pass through Congress as that’s how the senators also make most of their gains.