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A wealth tax (instead of income tax) is the best way to reverse the capital hoarding which is destroying modern society. Go after their assets.

by crmd 4y ago

cperciva 4y ago
Would a wealth tax also apply to the NPV of pensions?
- WJW 4y ago
  Depends on how you arrange it. In the Netherlands we have a wealth tax, but pensions are not affected by it. Pensions are counted as "deferred income", so you can pay into them with "pre-tax" money but when the pension is paid out the income tax is applied. This makes it so that it is beneficial for workers to save into their pensions, since the effective income tax of pensioners is usually lower than for people still working.
Thlom 4y ago
We have a tiny wealth tax in Norway, so now the richest are moving to Switzerland.
- orangepurple 4y ago
  Switzerland also has a tiny wealth tax for all residents
  - Jensson 4y ago
    Switzerland has a tiny wealth tax instead of a capital gains tax, Switzerland's is 0.3% and Norway's wealth tax is above 1% and also has capital gains tax, totally different. The total tax per wealth is much much lower. Also you can opt for a lump sum tax, and then you don't tax your wealth or income at all, you just pay tax based on your expenses. Switzerland's tax is very lax.
- paganel 4y ago
  If there’s true political will one can do it, especially if you’re a country as big as France. Let’s say Arnault, the wealthiest French guy, decides to decamp for Switzerland were the French to introduce a wealth tax, then one of the most obvious solutions would be to nationalize his assets with pennies on the dollar, introduce an “emergency societal clause” in the mix to make it more “legal”, and I can assure you that the rest of French billionaires will be happy to pay an effective tax rate of 50% (let’s say) as long as the State will still allow them to keep a nominal hold on things. And before anyone comes in and says “nationalization is a thing that only dictators do”, the modern history of France is full of examples to the contrary. As recently as 1981 Mitterrand won the presidency by promising just that, i.e. nationalizations.
  - fvdessen 4y ago
    Then people don't invest in France as much for fear of having their wealth nationalised and invest in neighbouring countries instead. Then the middle class leaves to the better jobs in the neighbouring countries.
    - danaris 4y ago
      Are you under the impression that most wealth in a country comes from rich people? Because observation over the past few decades strongly suggests it's the reverse. Rich people drain money out of the economy; working people create value, and thus wealth. Or what do you think is going to happen? The billionaires will pull out, but they'll make sure to retain ownership of all the businesses they ran—and fire everyone, thus ensuring that those are just losing them money? How is that going to be better for them than paying the tax? And how long before France just nationalizes the businesses and puts people back to work without the billionaires getting a cent?
      - fvdessen 4y ago
        Investors are usually not billionaires but either regular people putting money in the stock market for their savings or retirement money, companies looking to expand their assets, state looking to manage some of their funds, etc.
- tpmx 4y ago
  The wealth tax in Norway: $160k - $1.9M: 1% per year $1.9M and above: 1.4% per year
scotuswroteus 4y ago
The best way to reverse the capital hoarding is to deeply understand the way the policy making system works, not to debate the merits of different policies. Folks who believe in a wealth tax also don't believe in putting their noses to the grindstone for decades to engage in the high octane chess game of bureaucratic power politics. So it'll never happen.
- forgetfreeman 4y ago
  Many do. Invariably they run into issues trying to finance their campaign when competing with candidates who are funded and offered media coverage by oligarchs. So having thrown our hands in the air and given up should we just make serfdom a thing again officially, or should we just go on pretending?
kwere 4y ago
that and eliminating the creation of money out of thin air to generate the famous healty 2% inflation, the money injected into the financial system tend to go to the connected and financial worthy aka already rich, creating bubbles and cheating society. A 2% wealth tax would be more equitable
wskinner 4y ago
Impressive to pack so many assumptions in such a short comment. - wealth tax is the best way - capital hoarding is a thing - capital hoarding is destroying modern society
- forgetfreeman 4y ago
  Not only are these not assumptions, they're trivially proven with even the briefest of research on the subject. Capital hoarding: go look at GDP graphed against wages over the last 60 years. Wages don't go up, so all that extra productivity is going in -someone's- pocket. Capital hoarding is destroying modern society: global news media is largely controlled by 7 organizations, the international housing market has been invaded by investment funds, healthcare outcomes in the US continue to lag behind most industrialized nations worldwide despite record profits, the list goes on. It has never been harder to get a leg up (at least in the US) at any point in the last 50 years, and the percentage of US households that are living paycheck to paycheck keeps increasing year over year. Not sure what you're stanning over there but that is definitely an impressive set of blinders you've got on.
  - legitster 4y ago
    Capital hoarding only refers to wealth being held back from the market. Investments wouldn't count because you are lending your money to others and that generates economic growth. I think you are conflating terms with some other inequality concepts. You're clearly trying to shorthand a lot of disparate political topics into one point (a good share of hospitals and insurance companies in the US are non-profit - it clearly doesn't affect medical prices), but I don't think it's as clear cut an issue as you are making it.
    - forgetfreeman 4y ago
      I mean if you want to pretend the issue is murky despite one being able to toss (at random) a loose collection of off-the-cuff examples so be it, but I don't think your confusion is rooted in much beyond cognitive dissonance. Put even more simply: the haves are taking too much from folks that actually work, hampering their social and economic mobility.
fvdessen 4y ago
France already has a wealth tax and it is famous for being completely ineffective. Very wealthy people just move away with their wealth to richer countries.
- orwin 4y ago
  And it's suppression changed nothing, so getting it back should be nice.
refurb 4y ago
It's been tried and failed. https://www.investorschronicle.co.uk/education/2021/02/11/lessons-from-history-france-s-wealth-tax-did-more-harm-than-good/ https://www.investorschronicle.co.uk/education/2021/02/11/le... What’s more, it led to an exodus of France’s richest. More than 12,000 millionaires left France in 2016, according to research group New World Wealth. In total, they say the country experienced a net outflow of more than 60,000 millionaires between 2000 and 2016. When these people left, France lost not only the revenue generated from the wealth tax, but all the others too, including income tax and VAT.

A wealth tax (instead of income tax) is the best way to reverse the capital hoarding which is destroying modern society. Go after their assets.

by crmd 4y ago

A wealth tax (instead of income tax) is the best way to reverse the capital hoarding which is destroying modern society. Go after their assets.

cperciva 4y ago

Would a wealth tax also apply to the NPV of pensions?

WJW 4y ago
Depends on how you arrange it. In the Netherlands we have a wealth tax, but pensions are not affected by it. Pensions are counted as "deferred income", so you can pay into them with "pre-tax" money but when the pension is paid out the income tax is applied. This makes it so that it is beneficial for workers to save into their pensions, since the effective income tax of pensioners is usually lower than for people still working.

Thlom 4y ago

We have a tiny wealth tax in Norway, so now the richest are moving to Switzerland.

orangepurple 4y ago
Switzerland also has a tiny wealth tax for all residents
- Jensson 4y ago
  Switzerland has a tiny wealth tax instead of a capital gains tax, Switzerland's is 0.3% and Norway's wealth tax is above 1% and also has capital gains tax, totally different. The total tax per wealth is much much lower. Also you can opt for a lump sum tax, and then you don't tax your wealth or income at all, you just pay tax based on your expenses. Switzerland's tax is very lax.
paganel 4y ago
If there’s true political will one can do it, especially if you’re a country as big as France. Let’s say Arnault, the wealthiest French guy, decides to decamp for Switzerland were the French to introduce a wealth tax, then one of the most obvious solutions would be to nationalize his assets with pennies on the dollar, introduce an “emergency societal clause” in the mix to make it more “legal”, and I can assure you that the rest of French billionaires will be happy to pay an effective tax rate of 50% (let’s say) as long as the State will still allow them to keep a nominal hold on things. And before anyone comes in and says “nationalization is a thing that only dictators do”, the modern history of France is full of examples to the contrary. As recently as 1981 Mitterrand won the presidency by promising just that, i.e. nationalizations.
- fvdessen 4y ago
  Then people don't invest in France as much for fear of having their wealth nationalised and invest in neighbouring countries instead. Then the middle class leaves to the better jobs in the neighbouring countries.
  - danaris 4y ago
    Are you under the impression that most wealth in a country comes from rich people? Because observation over the past few decades strongly suggests it's the reverse. Rich people drain money out of the economy; working people create value, and thus wealth. Or what do you think is going to happen? The billionaires will pull out, but they'll make sure to retain ownership of all the businesses they ran—and fire everyone, thus ensuring that those are just losing them money? How is that going to be better for them than paying the tax? And how long before France just nationalizes the businesses and puts people back to work without the billionaires getting a cent?
    - fvdessen 4y ago
      Investors are usually not billionaires but either regular people putting money in the stock market for their savings or retirement money, companies looking to expand their assets, state looking to manage some of their funds, etc.
tpmx 4y ago
The wealth tax in Norway: $160k - $1.9M: 1% per year $1.9M and above: 1.4% per year

scotuswroteus 4y ago

The best way to reverse the capital hoarding is to deeply understand the way the policy making system works, not to debate the merits of different policies. Folks who believe in a wealth tax also don't believe in putting their noses to the grindstone for decades to engage in the high octane chess game of bureaucratic power politics. So it'll never happen.

forgetfreeman 4y ago
Many do. Invariably they run into issues trying to finance their campaign when competing with candidates who are funded and offered media coverage by oligarchs. So having thrown our hands in the air and given up should we just make serfdom a thing again officially, or should we just go on pretending?

kwere 4y ago

that and eliminating the creation of money out of thin air to generate the famous healty 2% inflation, the money injected into the financial system tend to go to the connected and financial worthy aka already rich, creating bubbles and cheating society. A 2% wealth tax would be more equitable

wskinner 4y ago

Impressive to pack so many assumptions in such a short comment. - wealth tax is the best way - capital hoarding is a thing - capital hoarding is destroying modern society

forgetfreeman 4y ago
Not only are these not assumptions, they're trivially proven with even the briefest of research on the subject. Capital hoarding: go look at GDP graphed against wages over the last 60 years. Wages don't go up, so all that extra productivity is going in -someone's- pocket. Capital hoarding is destroying modern society: global news media is largely controlled by 7 organizations, the international housing market has been invaded by investment funds, healthcare outcomes in the US continue to lag behind most industrialized nations worldwide despite record profits, the list goes on. It has never been harder to get a leg up (at least in the US) at any point in the last 50 years, and the percentage of US households that are living paycheck to paycheck keeps increasing year over year. Not sure what you're stanning over there but that is definitely an impressive set of blinders you've got on.
- legitster 4y ago
  Capital hoarding only refers to wealth being held back from the market. Investments wouldn't count because you are lending your money to others and that generates economic growth. I think you are conflating terms with some other inequality concepts. You're clearly trying to shorthand a lot of disparate political topics into one point (a good share of hospitals and insurance companies in the US are non-profit - it clearly doesn't affect medical prices), but I don't think it's as clear cut an issue as you are making it.
  - forgetfreeman 4y ago
    I mean if you want to pretend the issue is murky despite one being able to toss (at random) a loose collection of off-the-cuff examples so be it, but I don't think your confusion is rooted in much beyond cognitive dissonance. Put even more simply: the haves are taking too much from folks that actually work, hampering their social and economic mobility.

fvdessen 4y ago

France already has a wealth tax and it is famous for being completely ineffective. Very wealthy people just move away with their wealth to richer countries.

orwin 4y ago
And it's suppression changed nothing, so getting it back should be nice.

refurb 4y ago

It's been tried and failed. https://www.investorschronicle.co.uk/education/2021/02/11/lessons-from-history-france-s-wealth-tax-did-more-harm-than-good/ https://www.investorschronicle.co.uk/education/2021/02/11/le... What’s more, it led to an exodus of France’s richest. More than 12,000 millionaires left France in 2016, according to research group New World Wealth. In total, they say the country experienced a net outflow of more than 60,000 millionaires between 2000 and 2016. When these people left, France lost not only the revenue generated from the wealth tax, but all the others too, including income tax and VAT.