3 ms·

What is this other than deferred taxation? If one earns 100k in year one, it is taxed as income at 3%. I put the net 97k in the bank and from next year onwards

What is this other than deferred taxation? If one earns 100k in year one, it is taxed as income at 3%. I put the net 97k in the bank and from next year onwards it will again be taxed as wealth at 4%, in perpetuity.

rayhano 14y ago
You're kidding me, right? Currently, you would be taxed 40% of that 100k. So immediately you would only have 60k. Whatever you do with that: spend it, invest it, you only start with 60k, even though your earned 100k. And most likely, you will diversify... spend some, invest some, save some.
- sjtgraham 14y ago
  Firstly, not everyone pays PAYE. Having an accountant and structuring your finances in a tax efficient manner is not the preserve of the super rich. What you describe is a perpetual tax. Cash exchanged for goods of value or other financial instruments still have intrinsic value. Anything classed as an asset would be taxed in perpetuity. I'm sorry, right now I think your proposal is absolutely absurd. If you earn and invest in the same tax year would you be taxed twice? How does your model handle depreciation? What about property? Can debt finance, e.g. a mortgage, be offset from your taxable assets? There are so many unanswered questions (and these are what popped into mind with 5 seconds thought) I have to ask, is it you who is kidding?
shyn3 14y ago
It would be a deferred taxation but over 13-years instead of 1-year for the same amount of money earned, if and only if you haven't spent it all.
- sjtgraham 14y ago
  One would still pay tax on any physical asset acquired with the money. The wealth tax is essentially a perpetual tax on possessions.
  - shyn3 14y ago
    Yes, sorry. I should have added if you blew it on booze and women. If you purchased anything of value you get screwed over by paying a higher tax rate.

3 ms·

What is this other than deferred taxation? If one earns 100k in year one, it is taxed as income at 3%. I put the net 97k in the bank and from next year onwards

by sjtgraham 14y ago

rayhano 14y ago
You're kidding me, right? Currently, you would be taxed 40% of that 100k. So immediately you would only have 60k. Whatever you do with that: spend it, invest it, you only start with 60k, even though your earned 100k. And most likely, you will diversify... spend some, invest some, save some.
- sjtgraham 14y ago
  Firstly, not everyone pays PAYE. Having an accountant and structuring your finances in a tax efficient manner is not the preserve of the super rich. What you describe is a perpetual tax. Cash exchanged for goods of value or other financial instruments still have intrinsic value. Anything classed as an asset would be taxed in perpetuity. I'm sorry, right now I think your proposal is absolutely absurd. If you earn and invest in the same tax year would you be taxed twice? How does your model handle depreciation? What about property? Can debt finance, e.g. a mortgage, be offset from your taxable assets? There are so many unanswered questions (and these are what popped into mind with 5 seconds thought) I have to ask, is it you who is kidding?
shyn3 14y ago
It would be a deferred taxation but over 13-years instead of 1-year for the same amount of money earned, if and only if you haven't spent it all.
- sjtgraham 14y ago
  One would still pay tax on any physical asset acquired with the money. The wealth tax is essentially a perpetual tax on possessions.
  - shyn3 14y ago
    Yes, sorry. I should have added if you blew it on booze and women. If you purchased anything of value you get screwed over by paying a higher tax rate.