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OP here. I sort of agree with you, but it's a bit complicated and it wasn't obvious what the right way to word that was. To get granular: Wealth taxes are a b

OP here. I sort of agree with you, but it's a bit complicated and it wasn't obvious what the right way to word that was. To get granular: Wealth taxes are a bit distinct from taxing unrealized gains directly (even though they often have that effect, and there is some obvious overlap). If we look at, say, the Netherlands, they're assessing a ~1.7% wealth tax on assets over €1m independent of the performance of the assets over the year in question, which then exempts the payer from capital gains taxes upon sale. So we can call this taxing unrealized gains, but it's a bit imprecise in that they aren't taxing the gains themselves (which are unknown, and could be losses), but rather wealth at a prior point in time based on a fixed formula. If the asset in question went up 20%, the Dutch gov isn't going to tax the excess or force realization on any specific timeline. They'll just keep taking their 1.7% every year on whatever is there on Jan 1st. There also aren't a lot of countries doing anything like this as touching upon non-real estate investments, and most European countries that have experimented with them are in the process of reversion (e.g., Norway, France) as it basically hasn't proved workable in most instances. So maybe I should have left something like this as a footnote to clarify.

kristofferR 5y ago
The part about Norway is total bullshit. The "reversion" is solely because the Conservative party, the party for rich people, is in power. There's no evidence it hasn't proved workable. The left coalition has promised to increase the wealth tax back again to recent levels if they gain power in the September election. Edit: Just got banned from his blog for making this comment... https://i.imgur.com/ZkaLuRT.png https://i.imgur.com/ZkaLuRT.png
- jeremy_arnold 5y ago
  It's certainly true that political winds are driving the reversions. But what's driving the politics? Wealth taxes face three classic problems: (1) they're very hard to set in any fair sense given complexities of markets and assets, (2) they can induce liquidation in ways that are net bad for the economy, and (3) capital flight. 3 seems to have been a problem in Norway (https://archive.is/L6kyZ https://archive.is/L6kyZ), as it was in France and elsewhere in Europe prior. If your tax system causes a net decrease in receipts because you're golden geese have fled, that's a workability problem!
  - kristofferR 5y ago
    That article consist of just a Conservative politician doing politics and a survey by various Chamber of Commerce's, not exactly good evidence. Of course, the taxed are going to say that they don't like paying taxes. Real evidence of capital flight in larger amounts than the taxes gained are harder to come by.
    - jeremy_arnold 5y ago
      If you'd been respectful, there'd be no ban!
md_ 5y ago
What? This is extreme hair splitting. Switzerland, Norway, etc, do tax unrealized gains. They net tax wealth of saleable assets along with cash at a specific point in the year, as you note. That includes unrealized gains. It’s totally unclear to me why you think the distinction here somehow invalidates the ProPublica piece.
- jeremy_arnold 5y ago
  ProPublica said that these billionaires were avoiding taxes because their unrealized gains weren't being taxed, and implied that they should be in a direct sense for fairness. (Note that ProPublica mentions wealth taxes at the end, and then immediately dismisses them. Their object here really was/is gains taxation in a direct sense.) My point was that this isn't tax avoidance, that there are reasons we don't tax unrealized gains directly, and that virtually no countries do it that way. It's true that a few (and very much declining) number of countries have some form of wealth tax that includes some amount of unrealized gains. The Netherlands, for example, marks-to-market on Jan 1st of the tax year then doesn't actually track gains/losses over the next 364 days. So that obviously isn't a direct tax on gains. But it's certainly adjacent, and I said in the parent comment here.
  - md_ 5y ago
    What? How else would a tax on unrealized gains work if not mark-to-market at a fixed day of the year? This is exactly how Wyden’s proposal works as well, so I fail to understand the point you think you are making. Personal wealth taxes are literally a tax on personal wealth including unrealized gains. “I was wrong” is much easier to type than your confusing reply. :)
    - jeremy_arnold 5y ago
      There are taxes A B. B includes A. ProPublica says "we'd love to see more of A, which is separate from B, as B doesn't seem especially workable". A and B are not the same, even if one encompasses the other in some meta sense. A is actionable in a direct sense. And if you wanted to do it in a direct sense, the M2M date you'd pick would not be the first day of the tax year. And you wouldn't use a fixed formula that ignored actual results of the asset.

kristofferR 5y ago

The part about Norway is total bullshit. The "reversion" is solely because the Conservative party, the party for rich people, is in power. There's no evidence it hasn't proved workable. The left coalition has promised to increase the wealth tax back again to recent levels if they gain power in the September election. Edit: Just got banned from his blog for making this comment... https://i.imgur.com/ZkaLuRT.png https://i.imgur.com/ZkaLuRT.png

jeremy_arnold 5y ago
It's certainly true that political winds are driving the reversions. But what's driving the politics? Wealth taxes face three classic problems: (1) they're very hard to set in any fair sense given complexities of markets and assets, (2) they can induce liquidation in ways that are net bad for the economy, and (3) capital flight. 3 seems to have been a problem in Norway (https://archive.is/L6kyZ https://archive.is/L6kyZ), as it was in France and elsewhere in Europe prior. If your tax system causes a net decrease in receipts because you're golden geese have fled, that's a workability problem!
- kristofferR 5y ago
  That article consist of just a Conservative politician doing politics and a survey by various Chamber of Commerce's, not exactly good evidence. Of course, the taxed are going to say that they don't like paying taxes. Real evidence of capital flight in larger amounts than the taxes gained are harder to come by.
  - jeremy_arnold 5y ago
    If you'd been respectful, there'd be no ban!

md_ 5y ago

What? This is extreme hair splitting. Switzerland, Norway, etc, do tax unrealized gains. They net tax wealth of saleable assets along with cash at a specific point in the year, as you note. That includes unrealized gains. It’s totally unclear to me why you think the distinction here somehow invalidates the ProPublica piece.

jeremy_arnold 5y ago
ProPublica said that these billionaires were avoiding taxes because their unrealized gains weren't being taxed, and implied that they should be in a direct sense for fairness. (Note that ProPublica mentions wealth taxes at the end, and then immediately dismisses them. Their object here really was/is gains taxation in a direct sense.) My point was that this isn't tax avoidance, that there are reasons we don't tax unrealized gains directly, and that virtually no countries do it that way. It's true that a few (and very much declining) number of countries have some form of wealth tax that includes some amount of unrealized gains. The Netherlands, for example, marks-to-market on Jan 1st of the tax year then doesn't actually track gains/losses over the next 364 days. So that obviously isn't a direct tax on gains. But it's certainly adjacent, and I said in the parent comment here.
- md_ 5y ago
  What? How else would a tax on unrealized gains work if not mark-to-market at a fixed day of the year? This is exactly how Wyden’s proposal works as well, so I fail to understand the point you think you are making. Personal wealth taxes are literally a tax on personal wealth including unrealized gains. “I was wrong” is much easier to type than your confusing reply. :)
  - jeremy_arnold 5y ago
    There are taxes A B. B includes A. ProPublica says "we'd love to see more of A, which is separate from B, as B doesn't seem especially workable". A and B are not the same, even if one encompasses the other in some meta sense. A is actionable in a direct sense. And if you wanted to do it in a direct sense, the M2M date you'd pick would not be the first day of the tax year. And you wouldn't use a fixed formula that ignored actual results of the asset.