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Why go straight to a wealth tax? In the US, there exists a comprehensive system for measuring economic activity and translating it to income. To measure wealth

Why go straight to a wealth tax? In the US, there exists a comprehensive system for measuring economic activity and translating it to income. To measure wealth would require a huge invasion of privacy (not only of the wealthy but the 'suspected wealthy') and a whole new system of identifying and tracking things of value. Why not fix the income tax? At least try fixing it using the existing system, before creating this huge new boondoggle. Hint: the top income tax bracket is about 400K. It was 500K in 1913 (~13 million today adjusted with conservative, CPI-based inflation figures). There's your problem. Nobody should be making 10 times more than the top bracket in a year. If they are, you add a new bracket and skim an extra few percent. Right now, the wealthiest make ~10,000 times more than the highest income tax bracket, plus they are typically paying the capital gains bracket, which is even worse, so they end up paying less than doctors and engineers. When politicians clamor for a wealth tax, it's because they are either A. clueless or B. don't actually care about the problem, but want more power and votes. I think it's the former for Bernie and the latter for Warren.

XorNot 6y ago
Because it's more nuanced then that: the point of the uber-wealthy is that their net worth is tied up in investments. But because those investments have theoretically actualizable values, they can still "spend" them in the form of taking out loans against their assessed value. Which then compounds because a loan devalues with inflation, the bigger the loan the lower your interest rate and so on and so forth. So it winds up taking very little increase in their theoretical investments to offset a slow drip of "actual money" they're borrowing to fund their lifesystems or buy off politicians or what have you. They don't pay income tax like you or I pay income tax because the volumes involved are large enough that the "startup capital" for tax evasion is practical.
- lend000 6y ago
  You're proposing unnecessary complexity to solve a phantom problem. The wealthiest person in the world just sells a few billion worth of stock each year to fund his lifestyle/other companies. He pays the rate for the top capital gains bracket. It isn't that complicated. More brackets would normalize the wealth distribution. Some of the wealthy do take out loans against assets, but these loans involve risk. Investments are not guaranteed to beat an interest rate, or banks would just buy the investment, instead of loaning out the money at the interest rate. Especially for the ultra wealthy, those assets are typically heavy in one or two companies (the companies they founded, for example). And even if they can beat the interest rate on average, they still are continually liquidating the asset over the course of the loan, incurring the income tax. They certainly aren't beating the income tax rate + interest rate, if you fix the brackets. Nowadays, the Fed has almost taken an assured position that it will print enough money to rescue the market no matter what happens/melt your cash, but that's a separate issue. Address the inflationary monetary policy; don't create a huge wealth tax band-aid when a simpler solution exists.

XorNot 6y ago

Because it's more nuanced then that: the point of the uber-wealthy is that their net worth is tied up in investments. But because those investments have theoretically actualizable values, they can still "spend" them in the form of taking out loans against their assessed value. Which then compounds because a loan devalues with inflation, the bigger the loan the lower your interest rate and so on and so forth. So it winds up taking very little increase in their theoretical investments to offset a slow drip of "actual money" they're borrowing to fund their lifesystems or buy off politicians or what have you. They don't pay income tax like you or I pay income tax because the volumes involved are large enough that the "startup capital" for tax evasion is practical.

lend000 6y ago
You're proposing unnecessary complexity to solve a phantom problem. The wealthiest person in the world just sells a few billion worth of stock each year to fund his lifestyle/other companies. He pays the rate for the top capital gains bracket. It isn't that complicated. More brackets would normalize the wealth distribution. Some of the wealthy do take out loans against assets, but these loans involve risk. Investments are not guaranteed to beat an interest rate, or banks would just buy the investment, instead of loaning out the money at the interest rate. Especially for the ultra wealthy, those assets are typically heavy in one or two companies (the companies they founded, for example). And even if they can beat the interest rate on average, they still are continually liquidating the asset over the course of the loan, incurring the income tax. They certainly aren't beating the income tax rate + interest rate, if you fix the brackets. Nowadays, the Fed has almost taken an assured position that it will print enough money to rescue the market no matter what happens/melt your cash, but that's a separate issue. Address the inflationary monetary policy; don't create a huge wealth tax band-aid when a simpler solution exists.