4 ms·

I'm not sure I agree with taxing the "wealth", instead of income. Sure, on paper, Buffett's wealth went up by $23B; but these are just imaginary numbers based o

I'm not sure I agree with taxing the "wealth", instead of income. Sure, on paper, Buffett's wealth went up by $23B; but these are just imaginary numbers based on the whims of the market. The tax should be on what amount of money actually flowed into his bank account.

mathattack 5y ago
Over the long term it makes sense. Over the short term it’s more difficult if the assets aren’t liquid.
lumost 5y ago
The problem is that there is no way to track what flows into his bank account. Evidence says that he can avoid being taxed on any dollars flowing to his bank account. This wasn't a huge problem a century ago due to the Estate tax ensuring that estates would shrink over time and eventually be taxed. In stark contrast to European laws that required estates to be maintained in their entirety to preserve the aristocracy. If Buffett can avoid tax during life and death and pass on a preserved estate then there is no guardrail against a gentle class. Fundamentally it also means that we've setup a tax system more akin to a feudal system where workers pay taxes and aristocrats receive benefits.
- kwhitefoot 5y ago
  Off topic, just for your information: gentile in English is not the same word as in, for example, French. The English word means not-Jewish whereas I think you probably meant gentle which has an archaic meaning of noble. See https://www.lexico.com/definition/gentle https://www.lexico.com/definition/gentle
  - lumost 5y ago
    Great Callout! I've updated the text to reflect the correct word.
  - filoeleven 5y ago
    The modern equivalent (though it is not often encountered either) is “genteel”, which I think roughly mimics the French pronunciation of the original word, but with a hard “g”. Sure looks like a cognate to me.
- tannhauser23 5y ago
  What are you talking about? You think Warren Buffet can covertly sell his holdings and not have anybody find out? If he executes any sales the brokers will have the records; if he transfer the funds to any bank in the world, there will be plethora of records for regulators to access. There's no way he can secretly hide large transfers.
- whakim 5y ago
  The estate tax wasn't even enacted until 1916 so there wasn't a period of time where "estates would shrink over time" (for tax reasons, at least; the two World Wars plus inflation actually existing did lead to huge changes in the wealth distribution). And by the early 20th century land was no longer the single dominant form of capital in the portfolios of the wealthiest individuals.
jl2718 5y ago
You can follow this logic all the way down: - tax on wealth - tax on growth - tax on capital gains - tax on dollar deposits - tax on spending - tax on value-added - tax on labor Oh wait, that doesn't work at all. - no tax Which is the correct answer that ends up in everybody paying for the economy in proportion to their benefit from it. We're already operating like this: https://www.sifma.org/resources/research/us-treasury-securities-statistics/ https://www.sifma.org/resources/research/us-treasury-securit...
ggggtez 5y ago
But what do you think about him borrowing money using his "worthless" stock as collateral? Clearly the increase in stock price is valuable to banks. So why not the IRS?

mathattack 5y ago

Over the long term it makes sense. Over the short term it’s more difficult if the assets aren’t liquid.

lumost 5y ago

The problem is that there is no way to track what flows into his bank account. Evidence says that he can avoid being taxed on any dollars flowing to his bank account. This wasn't a huge problem a century ago due to the Estate tax ensuring that estates would shrink over time and eventually be taxed. In stark contrast to European laws that required estates to be maintained in their entirety to preserve the aristocracy. If Buffett can avoid tax during life and death and pass on a preserved estate then there is no guardrail against a gentle class. Fundamentally it also means that we've setup a tax system more akin to a feudal system where workers pay taxes and aristocrats receive benefits.

kwhitefoot 5y ago
Off topic, just for your information: gentile in English is not the same word as in, for example, French. The English word means not-Jewish whereas I think you probably meant gentle which has an archaic meaning of noble. See https://www.lexico.com/definition/gentle https://www.lexico.com/definition/gentle
- lumost 5y ago
  Great Callout! I've updated the text to reflect the correct word.
- filoeleven 5y ago
  The modern equivalent (though it is not often encountered either) is “genteel”, which I think roughly mimics the French pronunciation of the original word, but with a hard “g”. Sure looks like a cognate to me.
tannhauser23 5y ago
What are you talking about? You think Warren Buffet can covertly sell his holdings and not have anybody find out? If he executes any sales the brokers will have the records; if he transfer the funds to any bank in the world, there will be plethora of records for regulators to access. There's no way he can secretly hide large transfers.
whakim 5y ago
The estate tax wasn't even enacted until 1916 so there wasn't a period of time where "estates would shrink over time" (for tax reasons, at least; the two World Wars plus inflation actually existing did lead to huge changes in the wealth distribution). And by the early 20th century land was no longer the single dominant form of capital in the portfolios of the wealthiest individuals.

jl2718 5y ago

You can follow this logic all the way down: - tax on wealth - tax on growth - tax on capital gains - tax on dollar deposits - tax on spending - tax on value-added - tax on labor Oh wait, that doesn't work at all. - no tax Which is the correct answer that ends up in everybody paying for the economy in proportion to their benefit from it. We're already operating like this: https://www.sifma.org/resources/research/us-treasury-securities-statistics/ https://www.sifma.org/resources/research/us-treasury-securit...

ggggtez 5y ago

But what do you think about him borrowing money using his "worthless" stock as collateral? Clearly the increase in stock price is valuable to banks. So why not the IRS?