7 ms·

> I agree that a wealth tax is not the way to go. Why not? A tax on wealth, even a small one, is the only mechanism to avoid a long-term drift towards a feuda

> I agree that a wealth tax is not the way to go. Why not? A tax on wealth, even a small one, is the only mechanism to avoid a long-term drift towards a feudal-like state of society.

Spooky23 5y ago
Exactly. The strategic problem here is that the changes that took place in the Vietnam era and 80s ultimately creates a concentration of capital and power that is beyond anything we’ve seen since Roman times. In the mid-term we’re looking at some sort of weird hybrid plutocrat/government hybrid with an American flavor and a Chinese flavor. Everyone else is in the middle with the scraps.
hitpointdrew 5y ago
Because they don't work. Many EU countries have attempted them and they have all failed. There are a host of issues with wealth taxes, one of which is simply placing value on illiquid assets is difficult. How much is that rare art price worth? Well no one knows until you put it on the market. Then there are issues with immaterial things like rights, that would be very tricky to value. What if you had the rights to all of Bill Cosby's recorded stand-up acts? That could have been valued highly before the rape convictions, now it is essentially worthless. A wealth tax would just create a battle of litigation between the wealthy and IRS, and the wealthy would win. The real solution is to just have a VAT like every other developed nation in the world, is the only way to get slice of the pie from the wealthy.
- ekelsen 5y ago
  It's not that hard to find a price for a rare art piece, or almost any other asset. Make the owner declare its value, tax it at the value. But anyone can buy it at that price. If they want to keep it, they'll need to value it correctly, and thus it will get taxed correctly.
  - tornato7 5y ago
    This is called a Harberger tax and there has been extensive research on it: https://chicagounbound.uchicago.edu/cgi/viewcontent.cgi?article=12668&context=journal_articles https://chicagounbound.uchicago.edu/cgi/viewcontent.cgi?arti...
  - ccn0p 5y ago
    this would effectively auction off everything you own. What if an original piece of art is priceless to you? Where does it end?
    - NullPrefix 5y ago
      If it is actually priceless, then you should not be able to hog it for yourself. /s
  - sokoloff 5y ago
    Can you imagine the day that you declare a value on your house and the following week someone much richer than you comes along and tells you to "beat it; I just bought this place!"
    - lovecg 5y ago
      Would do wonders for the Bay Area housing market! On a serious note, this proposal was originally coupled with a pretty radical (from our point of view) approach to land ownership. Land is closer to zero-sum than many other things (ignoring artificial islands etc.), so this forces a more efficient pricing/land use at the expense of doing away with private property rights for land.
      - sokoloff 5y ago
        Worried that a competitor is catching up or threatening your market? Use your cash reserves to buy their factory out from under them. Don’t bother competing with Tesla, just make sure they can’t keep going once they get a little traction.
- wing-_-nuts 5y ago
  Your overall point is right, a wealth tax would be massively complex. In all honesty it's probably only worth implementing on billionaires (and using some of the funds raised for beefing up the IRS legal team and auditors). One thing I want to point out, the reason why 'wealth taxes have always failed' is because it's against the interests of the wealthy, and the wealthy are powerful. Look how scared republicans are of grover norquist and the billionaires that back him. It's hard not to argue the same thing is happening in the EU as well.
  - dexterdog 5y ago
    How do you even implement in on "only billionaires?" Wouldn't everybody need to doc their wealth to prove that they are not a billionaire?
    - wing-_-nuts 5y ago
      Billionaires are largely majority shareholders in corporations. I'd say that's a fine place to look. Maybe the IRS can look at the assets of anyone who's suspected to be worth 750M or more. Again, as I said, you could fund better enforcement of this by funding an IRS task force who's job it is to find and tax them. I can't believe something so simple as 'billionaires should pay more than 23% (or whatever it is) taxes are controversial, but here we are. I especially love how the Koch brothers effectively funded an astroturf campaign that hijacked the republican party, to get blue collar folks to argue against taxes on the 1%. That is some rich irony.
      - dexterdog 5y ago
        Nobody is saying they shouldn't pay taxes. People are saying they shouldn't be taxed on their wealth partially because anybody with an inkling of historic knowledge knows that a wealth tax will be coming to the masses shortly thereafter. Taxes are already far too complicated.
- plmu 5y ago
  Most European countries, including Switzerland, still have them. They do work with some limits. And they are absolutely necessary to prevent that, once you have made money, you can profit for the rest of your life including future generations. If there is no form of weath + inheritance tax, a feudal society is unavoidable. Even if difficult, we'd better try.
  - imtringued 5y ago
    I don't see the problem. As long as there is 2% inflation that wealth needs to be put to work in a way that ends up employing someone, therefore the employee benefits from the existence of the wealth that someone else carried hundreds of years into the future.
    - ac29 5y ago
      > As long as there is 2% inflation that wealth needs to be put to work in a way that ends up employing someone What exactly do you mean by this? Holding wealth in bars of gold doesnt need to employee anyone (if you have enough of them, you might want security personnel, but you could also just own a Gold ETF or something).
  - chrismcb 5y ago
    Why should we try? Other than wanting to be greedy and steal from the rich, what reason do we have to try?
- slg 5y ago
  Many of these things are already valued, including some by the government such as lot of real estate. We can work to use those valuations. We can make it so insurance companies need to report valuations to the government for example. A painting worth 7 figures is going to be listed in some insurance policy. Report that number to the government and there is no legal argument to be had. Either it is being overvalued for insurance fraud purposes or undervalued for tax fraud purposes. The conflicting incentives should yield a relatively accurate valuation. We also don’t need to make perfect the enemy of the good. We don’t need to account for absolutely every piece of wealth if we cover the big ones. We can also continue to revise these tax policies as new loopholes are discovered and exploited.
  - tannhauser23 5y ago
    "there is no legal argument to be had" Oh bless your heart.
    - slg 5y ago
      Arguing that one valuation is too low/high is and admission that the valuation is wrong and you are therefore open to accusations of fraud. So maybe “no legal argument” is an oversimplification, but no reasonable legal argument can be made without an admission that the other party needs to update their valuation in their benefit.
  - pinky1417 5y ago
    Perfect *is* the enemy of the good here. Major components of the economy are not valued regularly, e.g. private businesses. Sure, if a buyer paid $10MM last week for a private business, we might say it's worth $10MM today. But what about a business that was started from scratch by the founder? Or one that was last sold 30 years ago? Or one in a very niche industry? Put simply, valuation is not only a science, but an art... and it's an expensive art. The cost and difficulty of administration alone would be reason enough to steer clear of a wealth tax. Lastly, although I'm not a fan of higher taxes on anyone, even simply a more progressive income tax would make more sense than a wealth tax.
- pnutjam 5y ago
  Question? How do you feel about healthcare? Why is this the one place we should follow the rest of the world, wealth tax / VAT? One might suspect the wealthy are just dropping turds in the punchbowl.
- eecc 5y ago
  The Dutch (notoriously not the most Socialist of the lot) tax office assumes that any wealth above a certain “pocket money” stash, your first house and lifelong savings (money you effectively lock out of your reach until you reach pension) are invested and therefore taxed at ~20% on the assumed ~2% ROI. Seems roughly fair
  - HWR_14 5y ago
    How do you separate wealth building from consumption? If you buy 10 art pieces that could be an investment or an aesthetic/decorating choice. If you buy a TV it's almost certainly going to be worth nothing in a a few years.
tryptophan 5y ago
>feudal-like state of society Do you have a source for this? People keep repeating this over and over, but I have never seen a shred of evidence for it. It seems some people have just decided that they hate inheritance and thats just it, no evidence required. I would encourage you to look at the most unequal countries in the world by wealth. You may find it surprising that none of them are "feudal". https://en.wikipedia.org/wiki/List_of_countries_by_wealth_inequality https://en.wikipedia.org/wiki/List_of_countries_by_wealth_in... Edit: I don't mean to be snarky, apologies if it comes off that way. Unfounded ideas just bother me, and I would love to gain new perspective forming info.
- scottLobster 5y ago
  He said "feudal-like". One of the key aspects of feudal society is an aristocratic elite that controls almost all the property and rents it out to the rest of the population. Take a look at the current housing market craze where wealthy/institutional buyers are taking advantage of low interest rates to buy properties with all-cash, inspection-waived offers above asking price, in some cases whole neighborhoods at a time, so as to rent them out. This is a privilege unavailable even to the upper middle class, and could very well turn into a sort of neo-feudalism if left unchecked. It's also not unprecedented for companies to own entire towns and pay employees in company "scrip" that was only redeemable at company stores, a practice which lasted well into the 1950s and (after some googling) apparently was tried by the Mexican subsidiary of Walmart as recently as 2008. Looking at the broader state of the economy, wages have been stagnant for decades; property, healthcare & childcare (at least in the US) and education are more expensive than ever. With the exception of food, everything that matters in life is more unattainable for the average person, and everything that doesn't matter is super-cheap, with no signs of those trends reversing. How does that not turn into a form of neo-feudalism if left unchecked? The last time we "checked" it (in the US) it took decades of labor protests/riots that often turned bloody and the effects of a couple of world wars. Historically plagues (that actually kill a lot of people indiscriminately) and wars are just about the only re-distributive methods that have proven successful in the long term. Unless we want a repeat of some real nasty history, we need a historically unprecedented way to redistribute wealth.
- JAlexoid 5y ago
kristjansson 5y ago
We have a small tax on the wealth of the rich, called the estate tax. It's assessed when the owner will feel the pain the least.
- dexterdog 5y ago
  And we have piles of loopholes that make it effectively only a tax on the stupid rich.
MR4D 5y ago
Your argument doesn't seem to agree with the evidence. Feudal economies were actually powered by wealth taxes. So putting in a wealth tax won't do anything to avoid it becoming a feudal society. Further, confiscatory taxes[0] (of which wealth taxes are but one type) are favored by dictatorial regimes throughout history. I don't think we want to go down that road. Wikipedia has a great summary on feudal taxes[1], and they are based on wealth (usually land and hides). It's actually a pretty good summary of a long period of time, and a complex topic to begin with. [0] - https://www.merriam-webster.com/dictionary/confiscate https://www.merriam-webster.com/dictionary/confiscate [1] - https://en.wikipedia.org/wiki/Taxation_in_medieval_England https://en.wikipedia.org/wiki/Taxation_in_medieval_England
- eecc 5y ago
  And the Decima (10%) to the Church, and another to the Landlord for the rent of their lands. So please let’s not hot-take it to the extreme
chrismcb 5y ago
A tax on wealth is heinous, and in the long run won't work. First of all, how do you define wealth? An average over the year, end of year, middle of year? Who defines it? Part of the problem is wealth doesn't really mean anything. You can claim something is with X but until you actually sell it, it really isn't worth anything. The other issue is, I could work hard, build a company up, make the same income as the previous year, but now my wealth had increased because my company increased. So I gave to pay more taxes? Or I own some collectible that goes up in value, and I have to pay more taxes just because someone out there wants what I have? No, a wealth tax is criminal.

> I agree that a wealth tax is not the way to go. Why not? A tax on wealth, even a small one, is the only mechanism to avoid a long-term drift towards a feudal-like state of society.

Spooky23 5y ago

Exactly. The strategic problem here is that the changes that took place in the Vietnam era and 80s ultimately creates a concentration of capital and power that is beyond anything we’ve seen since Roman times. In the mid-term we’re looking at some sort of weird hybrid plutocrat/government hybrid with an American flavor and a Chinese flavor. Everyone else is in the middle with the scraps.

hitpointdrew 5y ago

Because they don't work. Many EU countries have attempted them and they have all failed. There are a host of issues with wealth taxes, one of which is simply placing value on illiquid assets is difficult. How much is that rare art price worth? Well no one knows until you put it on the market. Then there are issues with immaterial things like rights, that would be very tricky to value. What if you had the rights to all of Bill Cosby's recorded stand-up acts? That could have been valued highly before the rape convictions, now it is essentially worthless. A wealth tax would just create a battle of litigation between the wealthy and IRS, and the wealthy would win. The real solution is to just have a VAT like every other developed nation in the world, is the only way to get slice of the pie from the wealthy.

ekelsen 5y ago
It's not that hard to find a price for a rare art piece, or almost any other asset. Make the owner declare its value, tax it at the value. But anyone can buy it at that price. If they want to keep it, they'll need to value it correctly, and thus it will get taxed correctly.
- tornato7 5y ago
  This is called a Harberger tax and there has been extensive research on it: https://chicagounbound.uchicago.edu/cgi/viewcontent.cgi?article=12668&context=journal_articles https://chicagounbound.uchicago.edu/cgi/viewcontent.cgi?arti...
- ccn0p 5y ago
  this would effectively auction off everything you own. What if an original piece of art is priceless to you? Where does it end?
  - NullPrefix 5y ago
    If it is actually priceless, then you should not be able to hog it for yourself. /s
- sokoloff 5y ago
  Can you imagine the day that you declare a value on your house and the following week someone much richer than you comes along and tells you to "beat it; I just bought this place!"
  - lovecg 5y ago
    Would do wonders for the Bay Area housing market! On a serious note, this proposal was originally coupled with a pretty radical (from our point of view) approach to land ownership. Land is closer to zero-sum than many other things (ignoring artificial islands etc.), so this forces a more efficient pricing/land use at the expense of doing away with private property rights for land.
    - sokoloff 5y ago
      Worried that a competitor is catching up or threatening your market? Use your cash reserves to buy their factory out from under them. Don’t bother competing with Tesla, just make sure they can’t keep going once they get a little traction.
wing-_-nuts 5y ago
Your overall point is right, a wealth tax would be massively complex. In all honesty it's probably only worth implementing on billionaires (and using some of the funds raised for beefing up the IRS legal team and auditors). One thing I want to point out, the reason why 'wealth taxes have always failed' is because it's against the interests of the wealthy, and the wealthy are powerful. Look how scared republicans are of grover norquist and the billionaires that back him. It's hard not to argue the same thing is happening in the EU as well.
- dexterdog 5y ago
  How do you even implement in on "only billionaires?" Wouldn't everybody need to doc their wealth to prove that they are not a billionaire?
  - wing-_-nuts 5y ago
    Billionaires are largely majority shareholders in corporations. I'd say that's a fine place to look. Maybe the IRS can look at the assets of anyone who's suspected to be worth 750M or more. Again, as I said, you could fund better enforcement of this by funding an IRS task force who's job it is to find and tax them. I can't believe something so simple as 'billionaires should pay more than 23% (or whatever it is) taxes are controversial, but here we are. I especially love how the Koch brothers effectively funded an astroturf campaign that hijacked the republican party, to get blue collar folks to argue against taxes on the 1%. That is some rich irony.
    - dexterdog 5y ago
      Nobody is saying they shouldn't pay taxes. People are saying they shouldn't be taxed on their wealth partially because anybody with an inkling of historic knowledge knows that a wealth tax will be coming to the masses shortly thereafter. Taxes are already far too complicated.
plmu 5y ago
Most European countries, including Switzerland, still have them. They do work with some limits. And they are absolutely necessary to prevent that, once you have made money, you can profit for the rest of your life including future generations. If there is no form of weath + inheritance tax, a feudal society is unavoidable. Even if difficult, we'd better try.
- imtringued 5y ago
  I don't see the problem. As long as there is 2% inflation that wealth needs to be put to work in a way that ends up employing someone, therefore the employee benefits from the existence of the wealth that someone else carried hundreds of years into the future.
  - ac29 5y ago
    > As long as there is 2% inflation that wealth needs to be put to work in a way that ends up employing someone What exactly do you mean by this? Holding wealth in bars of gold doesnt need to employee anyone (if you have enough of them, you might want security personnel, but you could also just own a Gold ETF or something).
- chrismcb 5y ago
  Why should we try? Other than wanting to be greedy and steal from the rich, what reason do we have to try?
slg 5y ago
Many of these things are already valued, including some by the government such as lot of real estate. We can work to use those valuations. We can make it so insurance companies need to report valuations to the government for example. A painting worth 7 figures is going to be listed in some insurance policy. Report that number to the government and there is no legal argument to be had. Either it is being overvalued for insurance fraud purposes or undervalued for tax fraud purposes. The conflicting incentives should yield a relatively accurate valuation. We also don’t need to make perfect the enemy of the good. We don’t need to account for absolutely every piece of wealth if we cover the big ones. We can also continue to revise these tax policies as new loopholes are discovered and exploited.
- tannhauser23 5y ago
  "there is no legal argument to be had" Oh bless your heart.
  - slg 5y ago
    Arguing that one valuation is too low/high is and admission that the valuation is wrong and you are therefore open to accusations of fraud. So maybe “no legal argument” is an oversimplification, but no reasonable legal argument can be made without an admission that the other party needs to update their valuation in their benefit.
- pinky1417 5y ago
  Perfect *is* the enemy of the good here. Major components of the economy are not valued regularly, e.g. private businesses. Sure, if a buyer paid $10MM last week for a private business, we might say it's worth $10MM today. But what about a business that was started from scratch by the founder? Or one that was last sold 30 years ago? Or one in a very niche industry? Put simply, valuation is not only a science, but an art... and it's an expensive art. The cost and difficulty of administration alone would be reason enough to steer clear of a wealth tax. Lastly, although I'm not a fan of higher taxes on anyone, even simply a more progressive income tax would make more sense than a wealth tax.
pnutjam 5y ago
Question? How do you feel about healthcare? Why is this the one place we should follow the rest of the world, wealth tax / VAT? One might suspect the wealthy are just dropping turds in the punchbowl.
eecc 5y ago
The Dutch (notoriously not the most Socialist of the lot) tax office assumes that any wealth above a certain “pocket money” stash, your first house and lifelong savings (money you effectively lock out of your reach until you reach pension) are invested and therefore taxed at ~20% on the assumed ~2% ROI. Seems roughly fair
- HWR_14 5y ago
  How do you separate wealth building from consumption? If you buy 10 art pieces that could be an investment or an aesthetic/decorating choice. If you buy a TV it's almost certainly going to be worth nothing in a a few years.

tryptophan 5y ago

>feudal-like state of society Do you have a source for this? People keep repeating this over and over, but I have never seen a shred of evidence for it. It seems some people have just decided that they hate inheritance and thats just it, no evidence required. I would encourage you to look at the most unequal countries in the world by wealth. You may find it surprising that none of them are "feudal". https://en.wikipedia.org/wiki/List_of_countries_by_wealth_inequality https://en.wikipedia.org/wiki/List_of_countries_by_wealth_in... Edit: I don't mean to be snarky, apologies if it comes off that way. Unfounded ideas just bother me, and I would love to gain new perspective forming info.

scottLobster 5y ago
He said "feudal-like". One of the key aspects of feudal society is an aristocratic elite that controls almost all the property and rents it out to the rest of the population. Take a look at the current housing market craze where wealthy/institutional buyers are taking advantage of low interest rates to buy properties with all-cash, inspection-waived offers above asking price, in some cases whole neighborhoods at a time, so as to rent them out. This is a privilege unavailable even to the upper middle class, and could very well turn into a sort of neo-feudalism if left unchecked. It's also not unprecedented for companies to own entire towns and pay employees in company "scrip" that was only redeemable at company stores, a practice which lasted well into the 1950s and (after some googling) apparently was tried by the Mexican subsidiary of Walmart as recently as 2008. Looking at the broader state of the economy, wages have been stagnant for decades; property, healthcare & childcare (at least in the US) and education are more expensive than ever. With the exception of food, everything that matters in life is more unattainable for the average person, and everything that doesn't matter is super-cheap, with no signs of those trends reversing. How does that not turn into a form of neo-feudalism if left unchecked? The last time we "checked" it (in the US) it took decades of labor protests/riots that often turned bloody and the effects of a couple of world wars. Historically plagues (that actually kill a lot of people indiscriminately) and wars are just about the only re-distributive methods that have proven successful in the long term. Unless we want a repeat of some real nasty history, we need a historically unprecedented way to redistribute wealth.
JAlexoid 5y ago

kristjansson 5y ago

We have a small tax on the wealth of the rich, called the estate tax. It's assessed when the owner will feel the pain the least.

dexterdog 5y ago
And we have piles of loopholes that make it effectively only a tax on the stupid rich.

MR4D 5y ago

Your argument doesn't seem to agree with the evidence. Feudal economies were actually powered by wealth taxes. So putting in a wealth tax won't do anything to avoid it becoming a feudal society. Further, confiscatory taxes[0] (of which wealth taxes are but one type) are favored by dictatorial regimes throughout history. I don't think we want to go down that road. Wikipedia has a great summary on feudal taxes[1], and they are based on wealth (usually land and hides). It's actually a pretty good summary of a long period of time, and a complex topic to begin with. [0] - https://www.merriam-webster.com/dictionary/confiscate https://www.merriam-webster.com/dictionary/confiscate [1] - https://en.wikipedia.org/wiki/Taxation_in_medieval_England https://en.wikipedia.org/wiki/Taxation_in_medieval_England

eecc 5y ago
And the Decima (10%) to the Church, and another to the Landlord for the rent of their lands. So please let’s not hot-take it to the extreme

chrismcb 5y ago

A tax on wealth is heinous, and in the long run won't work. First of all, how do you define wealth? An average over the year, end of year, middle of year? Who defines it? Part of the problem is wealth doesn't really mean anything. You can claim something is with X but until you actually sell it, it really isn't worth anything. The other issue is, I could work hard, build a company up, make the same income as the previous year, but now my wealth had increased because my company increased. So I gave to pay more taxes? Or I own some collectible that goes up in value, and I have to pay more taxes just because someone out there wants what I have? No, a wealth tax is criminal.