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Your reply could have been written to be a lot less insulting and assume I'm aware of policy implications of this proposal but did not choose delve into 150 yea

Your reply could have been written to be a lot less insulting and assume I'm aware of policy implications of this proposal but did not choose delve into 150 years of research in a two line reply on HN. I wasn't proposing that this become policy for all assets. Would it allow you to accurately assess the price of rare high valued art for the purposes of a wealth tax -- yes. It would also allow you to value other assets as well, but there are drawbacks. I don't think your example of speculation is particularly good example of a drawback though. If you need to set the price at X so that someone doesn't buy it from you now, then that means its value is indeed just below X (assuming you've set X correctly). If you're the only person in the world you thinks that the value of your asset will be 10X in 10 years, then you can safely set the value at X now and nobody will buy it from you. If you aren't the only person in the world who thinks this and someone is willing to buy it from you now for 2X, then I guess the value of the asset right now is 2X.

yupper32 5y ago
It's a completely ridiculous policy that would require enumerating every item in history and deciding if people are able to buy it from you. My fridge? My dog? My shoes? My car? My bike? My boat? My model railroad set? My grandmothers ashes? My underwear? Oops I accidentally undervalued my gaming computer on my taxes and now people are knocking on my door. You'd end up with a document 3 million pages long and vengeful neighbors and exes buying each others items to fuck with each other. You're calling it a strawman argument, but these are actual things that would have to be addressed. No amount of "delving into 150 years of research" gets around all the massive, massive holes in your ridiculous idea.
- ekelsen 5y ago
  When you come up with a problem (in seconds) with a policy (especially one described in essentially one line), ask yourself, what reasonable change could I make to the original idea to make it more reasonable. For example, you could easily say that only assets that would be declared as having a value over X amount need to be declared in this way. Choose X to be somewhere in the neighborhood of a house, and you would get almost all the value of such a policy without any of the drawbacks you just listed.
  - yupper32 5y ago
    You still have a massive massive number of loop-holes to fill and complexities to answer for. Does my collection of rare coins count as one asset as a whole, or individual assets that are each under X amount? Who decides what my random painting is worth so I know if I have to declare it? What happens when my asset depreciates? Also, once you go to X being "somewhere in the neighborhood of a house" you lose a TON of taxable income with this policy to the point where it's probably not worth it. You're not going to gain much money taxing a few mega-yachts and rare paintings, especially when you have to include the money spent dealing with more complicated taxes and audits. We can just raise income and capital gains taxes instead and it's a whole lot easier. Wealth taxes that include assets are so fragile and complicated.
    - ekelsen 5y ago
      The purpose of a wealth tax is (mostly) not to raise revenue, it is to provide a downward pressure on the wealth of the wealthiest individuals. I also think you're making a poor estimate of what the distribution of wealth looks like. Yes, there are lots of small items, but the vast majority of wealth is stored in items/things/land/etc. of significant value. Perhaps more than anything it is stored as equity in companies. For income taxes the top 1 percent paid a greater share of individual income taxes (38.5 percent) than the bottom 90 percent combined (29.9 percent). For wealth the distribution is even more skewed. I agree there are a lot of things to figure out. That was and is true of our current system too. At one point the rules for all its loop-holes didn't exist and they had to be created and that didn't happen overnight. If your asset depreciates, then you say its worth less next year. You decide what your random painting is worth. If you don't report an asset that should be reported, I can see multiple mechanisms: (1) You sell it for more than X. At this point it becomes clear it should have been reported and back taxes are owed. (2) You bought it for X. If you don't report, questions would be asked. (3) There is no record of purchase and you never sell it. You might avoid paying taxes. I'm not sure what assets of significant value (over $500K) would fall into this category. I don't have a great answer completely off the cuff about how to deal with things like a collection of rare coins. Perhaps the best answer is the easiest answer: they are just treated separately.
cableshaft 5y ago
It sounds ridiculous on the face of it to me (one exception: in board games. There's something similar in board games like Isle of Skye where you set a price for tiles that you must pay if other players don't buy them from you, but that's just a 45 minute board game for victory points, not real physical assets) But I'm willing to read more about the idea, if you have an article or two that makes a good case for your proposal, please post and I'll give it a look. I saw in another comment someone called it the Harberger tax, and linked to a 66 page paper that I'm just not going to read for the sake of an internet post. I could have been less antagonistic in my reply, I apologize for that. I do think you're overestimating how well people can judge, individually, what something is worth accurately on declaration, both now and in the future, especially if it's an asset they don't ever want to part with. But again, I'd be happy to read articles from experts that make a case for this.
- ekelsen 5y ago
  A decent intro is the first chapter of Radical Markets, available here: http://assets.press.princeton.edu/chapters/s11222.pdf http://assets.press.princeton.edu/chapters/s11222.pdf but it also isn't short. Also a video here: https://www.youtube.com/watch?v=uj186urDU8c https://www.youtube.com/watch?v=uj186urDU8c Neither of these is particularly short and still don't address all (or even many) of the practical issues. As with most real policy and law, I don't think something can be both short and cover all the real world cases. There's unfortunately a reason most laws are really long. I believe the chapter of the book addresses the issue of how will people know what values to set. In addition to the solution proposed in the book, another alternative (of mine), is to allow people to pay some amount of retroactive tax. Let's say someone tries to buy the asset from you for your set price, but you don't want to sell. You can raise the price to some amount the buyer no longer wants to pay, but since you were underpaying taxes on the asset, you need to make them up. Would such a proposal probably mean people set lower prices than are correct -- yes; would it still make sense for things like homes -- yes.
  - cableshaft 5y ago
    I'll at least check out the video. I can put that on in the background while I'm doing dishes later. Thanks for the links. Also specifically for houses, at what point are you expected to make such a declaration? You don't really own the house until you've completely paid off the mortgage on it. Until then it really belongs to the bank or mortgage lender. So does that mean you're free to not make such a declaration until your 30 year mortgage is up? And what if you take out a second mortgage on the property during that time?

yupper32 5y ago

It's a completely ridiculous policy that would require enumerating every item in history and deciding if people are able to buy it from you. My fridge? My dog? My shoes? My car? My bike? My boat? My model railroad set? My grandmothers ashes? My underwear? Oops I accidentally undervalued my gaming computer on my taxes and now people are knocking on my door. You'd end up with a document 3 million pages long and vengeful neighbors and exes buying each others items to fuck with each other. You're calling it a strawman argument, but these are actual things that would have to be addressed. No amount of "delving into 150 years of research" gets around all the massive, massive holes in your ridiculous idea.

ekelsen 5y ago
When you come up with a problem (in seconds) with a policy (especially one described in essentially one line), ask yourself, what reasonable change could I make to the original idea to make it more reasonable. For example, you could easily say that only assets that would be declared as having a value over X amount need to be declared in this way. Choose X to be somewhere in the neighborhood of a house, and you would get almost all the value of such a policy without any of the drawbacks you just listed.
- yupper32 5y ago
  You still have a massive massive number of loop-holes to fill and complexities to answer for. Does my collection of rare coins count as one asset as a whole, or individual assets that are each under X amount? Who decides what my random painting is worth so I know if I have to declare it? What happens when my asset depreciates? Also, once you go to X being "somewhere in the neighborhood of a house" you lose a TON of taxable income with this policy to the point where it's probably not worth it. You're not going to gain much money taxing a few mega-yachts and rare paintings, especially when you have to include the money spent dealing with more complicated taxes and audits. We can just raise income and capital gains taxes instead and it's a whole lot easier. Wealth taxes that include assets are so fragile and complicated.
  - ekelsen 5y ago
    The purpose of a wealth tax is (mostly) not to raise revenue, it is to provide a downward pressure on the wealth of the wealthiest individuals. I also think you're making a poor estimate of what the distribution of wealth looks like. Yes, there are lots of small items, but the vast majority of wealth is stored in items/things/land/etc. of significant value. Perhaps more than anything it is stored as equity in companies. For income taxes the top 1 percent paid a greater share of individual income taxes (38.5 percent) than the bottom 90 percent combined (29.9 percent). For wealth the distribution is even more skewed. I agree there are a lot of things to figure out. That was and is true of our current system too. At one point the rules for all its loop-holes didn't exist and they had to be created and that didn't happen overnight. If your asset depreciates, then you say its worth less next year. You decide what your random painting is worth. If you don't report an asset that should be reported, I can see multiple mechanisms: (1) You sell it for more than X. At this point it becomes clear it should have been reported and back taxes are owed. (2) You bought it for X. If you don't report, questions would be asked. (3) There is no record of purchase and you never sell it. You might avoid paying taxes. I'm not sure what assets of significant value (over $500K) would fall into this category. I don't have a great answer completely off the cuff about how to deal with things like a collection of rare coins. Perhaps the best answer is the easiest answer: they are just treated separately.

cableshaft 5y ago

It sounds ridiculous on the face of it to me (one exception: in board games. There's something similar in board games like Isle of Skye where you set a price for tiles that you must pay if other players don't buy them from you, but that's just a 45 minute board game for victory points, not real physical assets) But I'm willing to read more about the idea, if you have an article or two that makes a good case for your proposal, please post and I'll give it a look. I saw in another comment someone called it the Harberger tax, and linked to a 66 page paper that I'm just not going to read for the sake of an internet post. I could have been less antagonistic in my reply, I apologize for that. I do think you're overestimating how well people can judge, individually, what something is worth accurately on declaration, both now and in the future, especially if it's an asset they don't ever want to part with. But again, I'd be happy to read articles from experts that make a case for this.

ekelsen 5y ago
A decent intro is the first chapter of Radical Markets, available here: http://assets.press.princeton.edu/chapters/s11222.pdf http://assets.press.princeton.edu/chapters/s11222.pdf but it also isn't short. Also a video here: https://www.youtube.com/watch?v=uj186urDU8c https://www.youtube.com/watch?v=uj186urDU8c Neither of these is particularly short and still don't address all (or even many) of the practical issues. As with most real policy and law, I don't think something can be both short and cover all the real world cases. There's unfortunately a reason most laws are really long. I believe the chapter of the book addresses the issue of how will people know what values to set. In addition to the solution proposed in the book, another alternative (of mine), is to allow people to pay some amount of retroactive tax. Let's say someone tries to buy the asset from you for your set price, but you don't want to sell. You can raise the price to some amount the buyer no longer wants to pay, but since you were underpaying taxes on the asset, you need to make them up. Would such a proposal probably mean people set lower prices than are correct -- yes; would it still make sense for things like homes -- yes.
- cableshaft 5y ago
  I'll at least check out the video. I can put that on in the background while I'm doing dishes later. Thanks for the links. Also specifically for houses, at what point are you expected to make such a declaration? You don't really own the house until you've completely paid off the mortgage on it. Until then it really belongs to the bank or mortgage lender. So does that mean you're free to not make such a declaration until your 30 year mortgage is up? And what if you take out a second mortgage on the property during that time?