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The value of the super wealthy’s net worth is paper. It only has value because we all agree it has value. If you started to seize their paper wealth and give it

The value of the super wealthy’s net worth is paper. It only has value because we all agree it has value. If you started to seize their paper wealth and give it to everyone else, the value of that paper would immediately fall, not just from the threat of seizing it but their lack of ownership and stewardship would make it crumble. When someone actually uses their money, like to buy a mansion, we do indeed tax the shit out of it. We tax the corporation, we tax the dividends, we tax the gains, we tax the seller of the property and we make the buyer pay various fees. We tax the property yearly, and we increase the assessed value of it upwards to get more tax every year. Tax tax tax. The only place to get more tax is to just seize the paper straight. And I think that’s a terrible idea.

bigfudge 2y ago
We don’t tax the shit out of it relative to income earned though. And in the UK we don’t even tax the property in any meaningful way. Do you in the US?
cko 2y ago
Seizing it would also have the secondary effect of a mass exodus of investment capital from the country, like capital flight in China. A more reasonable way is to seize it is through taxation, either by a wealth tax or tax on unrealized gains, but it would be very difficult to implement.
- JetSpiegel 2y ago
  Capital flight to where? The US economy is still the largest in the world, there aren't enough assets in the rest of the world for that capital to buy. Plus, the US government could just implement capital controls overnight (or better yet, in the night before), then the money would have nowhere to go.
oldpersonintx 2y ago
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ProfessorLayton 2y ago
>The only place to get more tax is to just seize the paper straight. And I think that’s a terrible idea. That's not true, right now there's lots of incentive for the ultra wealthy to not sell their stocks, and instead use the buy/borrow/die strategy. This results in less tax revenue, allows them to capture gains, and can then pass down that wealth on a step-up basis that wipes out capital gains for the recipient. Policies could be changed to incentivize selling assets without actually seizing them.
zer8k 2y ago
> The value of the super wealthy’s net worth is paper. It only has value because we all agree it has value. If you started to seize their paper wealth and give it to everyone else, the value of that paper would immediately fall, not just from the threat of seizing it but their lack of ownership and stewardship would make it crumble. I don't think ownership and stewardship is the problem. The fundamental problem is still there: whether they have 1T dollars, or 300M people have their share of 1T dollars, the dollars in the system will increase the second they spend it. Their "stewardship" is a tenuous position - commanding enough capital to cause massive inflation. Politics aside, it's lose/lose for a single person to command that much power over an economy. If every billionaire decided to liquidate their assets all at once the financial system would absolutely fold. The fact these people can accumulate this level of wealth is not only an income equality problem but a symptom of a cancer in our financial system. The Fed's policies and the existence of lobbying have, by and large, created these people. It's less a money problem but rather a political problem. I agree with you that the idea of charging capital gains on unrealized capital is financial and political suicide. Even if you suppose you only do this for people worth, say, 500M or more history has shown that this never sticks. Eventually, the government will continue to get more hungry and continue to make abhorrent financial decisions. Eventually, it will effect everyone. As you stated, the investment from regular people over the next 30-50 years would trend towards 0 - and then a new way to tax would need to be made. Negative interest rates on bank accounts, perhaps. That's not to say however it's ok that these people are allowed to possess >= 80% of a countries net wealth. The money isn't the problem is the power it brings - and that's a huge problem. The safest way is probably a progressive inheritance tax but it still has the same problem. How long before Joe Plumber is effected by it? 50 years? There's no simple solution.
- monero-xmr 2y ago
  The government has a monopoly on violence, and it can (and does) print as much money as it wants. There is no "threat" of a private person having money, they are still bound by the same laws. They became rich by creating a business that provided value for others - the most noble way to acquire wealth that exists. That's not a danger or a cancer of the system, that's a success

bigfudge 2y ago

We don’t tax the shit out of it relative to income earned though. And in the UK we don’t even tax the property in any meaningful way. Do you in the US?

cko 2y ago

Seizing it would also have the secondary effect of a mass exodus of investment capital from the country, like capital flight in China. A more reasonable way is to seize it is through taxation, either by a wealth tax or tax on unrealized gains, but it would be very difficult to implement.

JetSpiegel 2y ago
Capital flight to where? The US economy is still the largest in the world, there aren't enough assets in the rest of the world for that capital to buy. Plus, the US government could just implement capital controls overnight (or better yet, in the night before), then the money would have nowhere to go.

oldpersonintx 2y ago

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ProfessorLayton 2y ago

>The only place to get more tax is to just seize the paper straight. And I think that’s a terrible idea. That's not true, right now there's lots of incentive for the ultra wealthy to not sell their stocks, and instead use the buy/borrow/die strategy. This results in less tax revenue, allows them to capture gains, and can then pass down that wealth on a step-up basis that wipes out capital gains for the recipient. Policies could be changed to incentivize selling assets without actually seizing them.

zer8k 2y ago

> The value of the super wealthy’s net worth is paper. It only has value because we all agree it has value. If you started to seize their paper wealth and give it to everyone else, the value of that paper would immediately fall, not just from the threat of seizing it but their lack of ownership and stewardship would make it crumble. I don't think ownership and stewardship is the problem. The fundamental problem is still there: whether they have 1T dollars, or 300M people have their share of 1T dollars, the dollars in the system will increase the second they spend it. Their "stewardship" is a tenuous position - commanding enough capital to cause massive inflation. Politics aside, it's lose/lose for a single person to command that much power over an economy. If every billionaire decided to liquidate their assets all at once the financial system would absolutely fold. The fact these people can accumulate this level of wealth is not only an income equality problem but a symptom of a cancer in our financial system. The Fed's policies and the existence of lobbying have, by and large, created these people. It's less a money problem but rather a political problem. I agree with you that the idea of charging capital gains on unrealized capital is financial and political suicide. Even if you suppose you only do this for people worth, say, 500M or more history has shown that this never sticks. Eventually, the government will continue to get more hungry and continue to make abhorrent financial decisions. Eventually, it will effect everyone. As you stated, the investment from regular people over the next 30-50 years would trend towards 0 - and then a new way to tax would need to be made. Negative interest rates on bank accounts, perhaps. That's not to say however it's ok that these people are allowed to possess >= 80% of a countries net wealth. The money isn't the problem is the power it brings - and that's a huge problem. The safest way is probably a progressive inheritance tax but it still has the same problem. How long before Joe Plumber is effected by it? 50 years? There's no simple solution.

monero-xmr 2y ago
The government has a monopoly on violence, and it can (and does) print as much money as it wants. There is no "threat" of a private person having money, they are still bound by the same laws. They became rich by creating a business that provided value for others - the most noble way to acquire wealth that exists. That's not a danger or a cancer of the system, that's a success