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I’ve never understood why we tax income rather than wealth. Taxes pay for a stable society (army, police force, etc), which has more value for the wealthy. Tax
by midasuni 5y ago
I’ve never understood why we tax income rather than wealth. Taxes pay for a stable society (army, police force, etc), which has more value for the wealthy.
Taxing tends to remove incentive to do something by increasing the cost. We want people to be productive (get paid an income)
Taxing wealth rather than capital gains and income seems far better, once you set aside the enforcement part of the conversation.
Once you bring that part in, you’re basically arguing we should o what’s easy, not what’s right.
- wpietri 5y agoThis simple answer is it's easier. Income is mostly cash-denominated, so it's very easy to value. Wealth is often illiquid, so it's hard to know how much to tax. Look at property tax, for example. It's a wealth tax and it requires a very complicated apparatus to generate ok-ish numbers every year. But that mostly works because houses are a moderately liquid market, so appraisers can mark to the existing market. And even then there's a lot of dubious stuff around the margins, like the way Trump was giving different valuation numbers depending on whether he wanted a loan or to brag (high valuation number) versus paying taxes (low valuation number).