4 ms·

This kind of assumes liquidity... A lot of wealth is tied up in stocks and physical assets. Imagine having to orchestrate selling 2% of everything you own ever

This kind of assumes liquidity... A lot of wealth is tied up in stocks and physical assets. Imagine having to orchestrate selling 2% of everything you own every year. And why over a billion, why not put it at over a million, or ten? You could seize the full assets of every US Billionaire and it wouldn't cover a single year of the federal budget or dent the debt. There's no way to tax out of this hole... spending cuts need to happen, and restructuring as well. Taxes should focus on points of exchange.

thmsths 2y ago
There is a very good counter argument to the liquidity issue: property taxes. Most Americans have a large portion, if not all of their net worth tied up in their house. This is a very illiquid asset. Yet we have no problem taxing them at around 2%. If regular people can do it, I am sure billionaires will figure out a way to pay too.
- tracker1 2y ago
  I don't believe that property taxes are a good thing either. In 3 years, my own property taxes alone have increased my mortgage payment by close to 30%. I think we'd be better off with exchange taxes. Every time assets, securities, currency, etc is exchanged... it gets taxed. This includes stock trades. Property taxes are a way to make people not actually own their property.
  - ryandrake 2y ago
    How on earth do property taxes increase one's mortgage payment? They don't increase the size of your loan, so should have no effect on either your interest or principal payments. You might have chosen to pay your property taxes monthly, through escrow, and thus 1/12 of your property tax is sent along with your mortgage principal and interest every month, but your actual mortgage numbers aren't changing.
    - tracker1 2y ago
      Exactly.. because it's taken monthly into escrow. The fact is, I'm paying close to 30% more than a few years ago and it's entirely because of property taxes. Nobody should have property removed simply for living another year. edit: property taxes are actually up about 400% over when I bought my home 6 years ago. They property evaluation is now close to market value, where it was much lower/less and historically had been. It's been a money grab. It's also been particularly hard on retired home owners.
      - heelix 2y ago
        Our property taxes increased a crazy amount as well. Went from a 3'ish percent increase to up 25%, and then again another 14%. Pushing back on the assessment did nothing.
      - Sohcahtoa82 2y ago
        More states need to do what Oregon did and limit how quickly the assessed value of your house can increase for property tax purposes. I bought my house in 2015 for $340K, it's estimated to be worth $550-600K now, but my property tax is on only $275K in value. Each year, that value goes up 3%. It was taxed based on a ~$210K value when I bought it.
        riku_iki 2y ago
        is it fair that you pay much smaller taxes compared to fresh buyer?
        Sohcahtoa82 2y ago
        Maybe not. In this case though, "new buyer" will only refer to new construction. A buyer of an existing house keeps the assessed value. It doesn't jump.
        riku_iki 2y ago
        new buyer of existing house will have tax reassessed base on transaction (current market price)
  - AnimalMuppet 2y ago
    > Property taxes are a way to make people not actually own their property. That's kind of the point here, isn't it? To the people proposing this, that's a feature, not a bug. You think it's a bug. Fine. But if you oppose it, saying "but it will actually do what it was designed to do!" is not an effective counterargument.
    - tracker1 2y ago
      I've stated several times, in this thread... I don't believe that anyone should be deprived of property for living another year. There are plenty of points of interaction, travel, exchange, buying, spending, trade that can be taxed. I've been against property taxes for a very long time.
      - AnimalMuppet 2y ago
        > I've stated several times, in this thread... I don't believe that anyone should be deprived of property for living another year. Yes, you have. You keep repeating it, like you think saying it ends the argument. The problem that people are trying to address is wealth inequality. They want something that affects the rich more than everyone else - more than linearly. The problem with all your "points of interaction" is that they don't do that. They especially don't touch someone who has 10 billion dollars and just sits on it - leaves it invested in the same thing, maybe for decades, and doesn't spend nearly in proportion to their wealth. What do you have to say to the people who are trying to address wealth inequality, other than just repeating that you don't think they should do that? Do you have anything that might actually make them change their minds?
        tracker1 2y ago
        Taxing at exchange would disproportionately affect the wealthy.
  - cool_dude85 2y ago
    >Property taxes are a way to make people not actually own their property. How do you figure? What does ownership have to do with taxation?
- nullc 2y ago
  Most (all?) states have varrious schemes that fix or greatly diminish property taxes at least for your home... (California does so for all property). So it's generally possible to do the upfront accounting work to cover them (e.g. set aside enough additional funds in interest bearing investments to pay them in perpetuity). And there is a liquid market in property at least, for some definition of liquidity, which makes it possible to sell and possible to set some kind of price. Real property also lacks the significant privacy invasion and personal information problems that arise with other kinds of property-- since real property is inherently non-private in some sense (otherwise it's a hole in a map :) ). For many other kinds of valuable assets there really may be no liquid market and any prices you would ascribe are just pure conjecture and fiction. It may well be difficult for the owner to even know they own it, or what its condition is, without ongoing costly auditing, etc. I'll grant you that it's a counter argument, but I don't know that it's a good one. Before someone suggests that a wealth tax could be applied to publicly traded equities that avoided most of these issues-- perhaps, but at the cost of tremendous market distortion as people tried to pull wealth into things other than equities, greatly harming everyone else who isn't hyper rich and doesn't have a lot of investment opportunities outside of the public markets. Just take a look at the absurd california wealth tax proposals-- the amount of abjectly insane personal invasion required to try to close off escapes requiring billions of dollars in funding while still basically letting some unelected board nail people under suspicious of not paying enough, it's truly remarkable. One doesn't have to care at all about the pocketbooks of the targets to recognize bad public policy, ripe for corrupt exploitation.
  - tracker1 2y ago
    So rich people should be required to buy a new house every year?
- galdosdi 2y ago
  What a time wasting goofball argument. Many laws exempt all or part of your primary residence from consideration, and no reason not to include this one, for the exact reason you said. Many localities also are flexible with property taxes for example, letting senior citizens, the disabled, or those with low income freeze their property taxes. Yes, if we implement a new law badly the results might be bad, but why would we do that? Obviously we would write the legislation carefully to address all such details. It does not make sense to raise objections that are so trivially addressed. If I invented the automobile would you complain that they are impossible and will never catch on merely because there's no way to see behind you, a complaint easily remedied by adding a cheap mirror? Here on HN we should focus on more substantive comments
benzible 2y ago
> This kind of assumes liquidity... A lot of wealth is tied up in stocks and physical assets. Imagine having to orchestrate selling 2% of everything you own every year. So, you'd need some liquid assets, or to time any lockup to make them available when needed. So maybe you make a slightly less than optimal return on 2% of your wealth > $1B. A tragedy. > And why over a billion, why not put it at over a million, or ten? Every limit is arguably arbitrary. The tax codes and laws in general are full of limits that had to be set at some point - misdemeanor vs felony theft, etc. > You could seize the full assets of every US Billionaire and it wouldn't cover a single year of the federal budget or dent the debt So if it's less than some arbitrary limit you've just set, there's no point in doing it at all? > There's no way to tax out of this hole... spending cuts need to happen, and restructuring as well. Nah https://www.nytimes.com/2023/05/19/opinion/government-debt-pay-off.html https://www.nytimes.com/2023/05/19/opinion/government-debt-p... (https://archive.is/uqYiY https://archive.is/uqYiY) > Taxes should focus on points of exchange. Yes, increase taxes on the poor for basic necessities rather than taxing people with far more money than they productively use because... ???
- tracker1 2y ago
  >> Taxes should focus on points of exchange. > Yes, increase taxes on the poor for basic necessities rather than taxing people with far more money than they productively use because... ??? Yeah, wealthy don't have any major exchanges... no stock trades, no building purchases, no yachts that would vastly exceed the spending of most poor.
  - benzible 2y ago
    Sales taxes are regressive. No idea how to analyze the total burden of some unspecified package of "taxes at the point of exchange" but in any case, what's the rationale for this vs., say, taxing capital gains as ordinary income, or eliminating the carried interest loophole? Seems like this just comes down to your personal preferences.
    - tracker1 2y ago
      I didn't say sales, I said exchange. Again, my personal preference is not to deprive someone of property for living another year.
jncfhnb 2y ago
> Imagine having to orchestrate selling 2% of everything you own every year. imagine liquidating all of your assets every month to pay rent. I think the 2% crowd will do just fine.
- tracker1 2y ago
  One of those examples is being proposed... the other is a strawman.
  - galdosdi 2y ago
    Your privilege is showing, lol. It didn't even occur to you that what you call an unimaginable "straw man" is just normal life for the majority of Americans who live paycheck to paycheck and send the majority of their assets off to their landlord every month. The OP didn't explain this since it is obvious to most people, and the elite few who don't get this knowledge for free, frankly, have a basic duty to society to learn a little bit about how the other half lives, so that they don't constantly embarrass themselves as you just did, or as Mrs Vanderbilt once famously did when she asked where the gardeners bought the leaves to place on the lawn so artfully (having grown up in an estate where thr servants cleaned up before the family could see them) I know, I know, living paycheck to paycheck sounds crazy right? Maybe to you or me, but you try living off $13 an hour in a major city and see if you do any better.
    - pandaman 2y ago
      Majority of Americans own their house and don't have any landlords to send assets to. Furthermore, many landlords require the income to be at least 40 times more the monthly rent, some alternate this with showing funds for triple annual rent. None of these scenarios is possible when the rent is majority of one's assets.
      - jncfhnb 2y ago
        What thesis are your trying to prove here?
saulpw 2y ago
> why over a billion, why not put it at over a million, or ten? It's not about using their money on federal budget. It's that money=power, and it's to the detriment of society for any individual to have that much power. https://www.amazon.com/Limitarianism-Case-Against-Extreme-Wealth/dp/1662601840 https://www.amazon.com/Limitarianism-Case-Against-Extreme-We...
- tracker1 2y ago
  When the wealth of the US govt is brought to bare as part of the assertion, I might be inclined to agree.
ryandrake 2y ago
I'm sure billionaires would manage just fine. In fact, if it's such a hassle for them, I'd be happy to trade net worths with any billionaire, if in return I merely had to write the government a 2% check every year. I volunteer. Please, tell me where to sign up!

thmsths 2y ago

There is a very good counter argument to the liquidity issue: property taxes. Most Americans have a large portion, if not all of their net worth tied up in their house. This is a very illiquid asset. Yet we have no problem taxing them at around 2%. If regular people can do it, I am sure billionaires will figure out a way to pay too.

tracker1 2y ago
I don't believe that property taxes are a good thing either. In 3 years, my own property taxes alone have increased my mortgage payment by close to 30%. I think we'd be better off with exchange taxes. Every time assets, securities, currency, etc is exchanged... it gets taxed. This includes stock trades. Property taxes are a way to make people not actually own their property.
- ryandrake 2y ago
  How on earth do property taxes increase one's mortgage payment? They don't increase the size of your loan, so should have no effect on either your interest or principal payments. You might have chosen to pay your property taxes monthly, through escrow, and thus 1/12 of your property tax is sent along with your mortgage principal and interest every month, but your actual mortgage numbers aren't changing.
  - tracker1 2y ago
    Exactly.. because it's taken monthly into escrow. The fact is, I'm paying close to 30% more than a few years ago and it's entirely because of property taxes. Nobody should have property removed simply for living another year. edit: property taxes are actually up about 400% over when I bought my home 6 years ago. They property evaluation is now close to market value, where it was much lower/less and historically had been. It's been a money grab. It's also been particularly hard on retired home owners.
    - heelix 2y ago
      Our property taxes increased a crazy amount as well. Went from a 3'ish percent increase to up 25%, and then again another 14%. Pushing back on the assessment did nothing.
    - Sohcahtoa82 2y ago
      More states need to do what Oregon did and limit how quickly the assessed value of your house can increase for property tax purposes. I bought my house in 2015 for $340K, it's estimated to be worth $550-600K now, but my property tax is on only $275K in value. Each year, that value goes up 3%. It was taxed based on a ~$210K value when I bought it.
      - riku_iki 2y ago
        is it fair that you pay much smaller taxes compared to fresh buyer?
        Sohcahtoa82 2y ago
        Maybe not. In this case though, "new buyer" will only refer to new construction. A buyer of an existing house keeps the assessed value. It doesn't jump.
        riku_iki 2y ago
        new buyer of existing house will have tax reassessed base on transaction (current market price)
- AnimalMuppet 2y ago
  > Property taxes are a way to make people not actually own their property. That's kind of the point here, isn't it? To the people proposing this, that's a feature, not a bug. You think it's a bug. Fine. But if you oppose it, saying "but it will actually do what it was designed to do!" is not an effective counterargument.
  - tracker1 2y ago
    I've stated several times, in this thread... I don't believe that anyone should be deprived of property for living another year. There are plenty of points of interaction, travel, exchange, buying, spending, trade that can be taxed. I've been against property taxes for a very long time.
    - AnimalMuppet 2y ago
      > I've stated several times, in this thread... I don't believe that anyone should be deprived of property for living another year. Yes, you have. You keep repeating it, like you think saying it ends the argument. The problem that people are trying to address is wealth inequality. They want something that affects the rich more than everyone else - more than linearly. The problem with all your "points of interaction" is that they don't do that. They especially don't touch someone who has 10 billion dollars and just sits on it - leaves it invested in the same thing, maybe for decades, and doesn't spend nearly in proportion to their wealth. What do you have to say to the people who are trying to address wealth inequality, other than just repeating that you don't think they should do that? Do you have anything that might actually make them change their minds?
      - tracker1 2y ago
        Taxing at exchange would disproportionately affect the wealthy.
- cool_dude85 2y ago
  >Property taxes are a way to make people not actually own their property. How do you figure? What does ownership have to do with taxation?
nullc 2y ago
Most (all?) states have varrious schemes that fix or greatly diminish property taxes at least for your home... (California does so for all property). So it's generally possible to do the upfront accounting work to cover them (e.g. set aside enough additional funds in interest bearing investments to pay them in perpetuity). And there is a liquid market in property at least, for some definition of liquidity, which makes it possible to sell and possible to set some kind of price. Real property also lacks the significant privacy invasion and personal information problems that arise with other kinds of property-- since real property is inherently non-private in some sense (otherwise it's a hole in a map :) ). For many other kinds of valuable assets there really may be no liquid market and any prices you would ascribe are just pure conjecture and fiction. It may well be difficult for the owner to even know they own it, or what its condition is, without ongoing costly auditing, etc. I'll grant you that it's a counter argument, but I don't know that it's a good one. Before someone suggests that a wealth tax could be applied to publicly traded equities that avoided most of these issues-- perhaps, but at the cost of tremendous market distortion as people tried to pull wealth into things other than equities, greatly harming everyone else who isn't hyper rich and doesn't have a lot of investment opportunities outside of the public markets. Just take a look at the absurd california wealth tax proposals-- the amount of abjectly insane personal invasion required to try to close off escapes requiring billions of dollars in funding while still basically letting some unelected board nail people under suspicious of not paying enough, it's truly remarkable. One doesn't have to care at all about the pocketbooks of the targets to recognize bad public policy, ripe for corrupt exploitation.
- tracker1 2y ago
  So rich people should be required to buy a new house every year?
galdosdi 2y ago
What a time wasting goofball argument. Many laws exempt all or part of your primary residence from consideration, and no reason not to include this one, for the exact reason you said. Many localities also are flexible with property taxes for example, letting senior citizens, the disabled, or those with low income freeze their property taxes. Yes, if we implement a new law badly the results might be bad, but why would we do that? Obviously we would write the legislation carefully to address all such details. It does not make sense to raise objections that are so trivially addressed. If I invented the automobile would you complain that they are impossible and will never catch on merely because there's no way to see behind you, a complaint easily remedied by adding a cheap mirror? Here on HN we should focus on more substantive comments

benzible 2y ago

> This kind of assumes liquidity... A lot of wealth is tied up in stocks and physical assets. Imagine having to orchestrate selling 2% of everything you own every year. So, you'd need some liquid assets, or to time any lockup to make them available when needed. So maybe you make a slightly less than optimal return on 2% of your wealth > $1B. A tragedy. > And why over a billion, why not put it at over a million, or ten? Every limit is arguably arbitrary. The tax codes and laws in general are full of limits that had to be set at some point - misdemeanor vs felony theft, etc. > You could seize the full assets of every US Billionaire and it wouldn't cover a single year of the federal budget or dent the debt So if it's less than some arbitrary limit you've just set, there's no point in doing it at all? > There's no way to tax out of this hole... spending cuts need to happen, and restructuring as well. Nah https://www.nytimes.com/2023/05/19/opinion/government-debt-pay-off.html https://www.nytimes.com/2023/05/19/opinion/government-debt-p... (https://archive.is/uqYiY https://archive.is/uqYiY) > Taxes should focus on points of exchange. Yes, increase taxes on the poor for basic necessities rather than taxing people with far more money than they productively use because... ???

tracker1 2y ago
>> Taxes should focus on points of exchange. > Yes, increase taxes on the poor for basic necessities rather than taxing people with far more money than they productively use because... ??? Yeah, wealthy don't have any major exchanges... no stock trades, no building purchases, no yachts that would vastly exceed the spending of most poor.
- benzible 2y ago
  Sales taxes are regressive. No idea how to analyze the total burden of some unspecified package of "taxes at the point of exchange" but in any case, what's the rationale for this vs., say, taxing capital gains as ordinary income, or eliminating the carried interest loophole? Seems like this just comes down to your personal preferences.
  - tracker1 2y ago
    I didn't say sales, I said exchange. Again, my personal preference is not to deprive someone of property for living another year.

jncfhnb 2y ago

> Imagine having to orchestrate selling 2% of everything you own every year. imagine liquidating all of your assets every month to pay rent. I think the 2% crowd will do just fine.

tracker1 2y ago
One of those examples is being proposed... the other is a strawman.
- galdosdi 2y ago
  Your privilege is showing, lol. It didn't even occur to you that what you call an unimaginable "straw man" is just normal life for the majority of Americans who live paycheck to paycheck and send the majority of their assets off to their landlord every month. The OP didn't explain this since it is obvious to most people, and the elite few who don't get this knowledge for free, frankly, have a basic duty to society to learn a little bit about how the other half lives, so that they don't constantly embarrass themselves as you just did, or as Mrs Vanderbilt once famously did when she asked where the gardeners bought the leaves to place on the lawn so artfully (having grown up in an estate where thr servants cleaned up before the family could see them) I know, I know, living paycheck to paycheck sounds crazy right? Maybe to you or me, but you try living off $13 an hour in a major city and see if you do any better.
  - pandaman 2y ago
    Majority of Americans own their house and don't have any landlords to send assets to. Furthermore, many landlords require the income to be at least 40 times more the monthly rent, some alternate this with showing funds for triple annual rent. None of these scenarios is possible when the rent is majority of one's assets.
    - jncfhnb 2y ago
      What thesis are your trying to prove here?

saulpw 2y ago

> why over a billion, why not put it at over a million, or ten? It's not about using their money on federal budget. It's that money=power, and it's to the detriment of society for any individual to have that much power. https://www.amazon.com/Limitarianism-Case-Against-Extreme-Wealth/dp/1662601840 https://www.amazon.com/Limitarianism-Case-Against-Extreme-We...

tracker1 2y ago
When the wealth of the US govt is brought to bare as part of the assertion, I might be inclined to agree.

ryandrake 2y ago

I'm sure billionaires would manage just fine. In fact, if it's such a hassle for them, I'd be happy to trade net worths with any billionaire, if in return I merely had to write the government a 2% check every year. I volunteer. Please, tell me where to sign up!