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> 4% wealth tax We already have a wealth tax. It's called "inflation." If the government wants to tax wealth, all they have to do is print money. The cultur
by csense 14y ago
> 4% wealth tax
We already have a wealth tax. It's called "inflation." If the government wants to tax wealth, all they have to do is print money. The culture of living within your means and saving for the future basically died before I was born, so the point that this kind of policy punishes responsible citizens who are capable of living frugally, within their means, and saving the future is essentially moot.
Sales and income taxes are easy to implement because they're based around money actually changing hands. Property taxes are easy to implement because the physical thing that's being taxed is clear. General wealth taxes rely on accounting and valuation of illiquid assets, which is easily subject to gamesmanship.
If this was implemented, you'd just cash out your bank account every day, then tell the tax authorities you "spent" the money (in reality you keep a suitcase full of large bills under your mattress, but they have no way of knowing that). As long as you don't make a ton of money, and could conceivably be spending it on living well (vacations, movies, good food, alcohol, flowers for the significant other, etc.), how are they going to prove otherwise?
If you have more money, it gets more difficult to use that particular trick, but you'll also have more political power to get loopholes written into the law, and pay accountants to figure out how to make the loopholes work for you. And it'll also become more worthwhile to go to the trouble of keeping money overseas out of the range of taxation, or set up exotic financial structures like life insurance policies, trusts or derivatives, which don't have a definite value until they become payable.
I'm not an accountant, so some of the details might not be one hundred percent right, but it feels like that's a fair first approximation to what would happen.
- rayhano 14y ago> We already have a wealth tax. It's called "inflation." If the government wants to tax wealth, all they have to do is print money. The culture of living within your means and saving for the future basically died before I was born, so the point that this kind of policy punishes responsible citizens who are capable of living frugally, within their means, and saving the future is essentially moot.< Not true, in the slightest. Inflation benefits those with income producing assets, like rental property. Inflation is a trick to make the rich richer. All the evidence points that way. And let people be vague with wealth valuations. This is about being more fair, not being burdensome. Those with obvious wealth will finally pay a fair share of tax. Those who work hard will finally have some reward for their work. The comment about cashing out your bank account every day is absurd. You pay 40%+ in income taxes right now. Would you not like to keep 97% of what you earn instead of less than 60%?
- rogerbinns 14y ago> Not true, in the slightest Your opinion differs from the field of economics where they actually study this sort of thing. http://en.wikipedia.org/wiki/Inflation#General http://en.wikipedia.org/wiki/Inflation#General > Inflation benefits those with income producing assets, like rental property Huh? The value of an asset is determined by what it produces in the future, both actual income and utility. Inflation adds risks to that - for example for the income to remain constant, the rental prices charged have to go up by the rate of inflation each year which people hate. Inflation introduces volatility in the face value of money which makes things riskier (eg loans to buy/build the rental property have to take that into account). > Inflation is a trick to make the rich richer. All the evidence points that way. Inflation devalues savings which is what the rich have and the poor don't have. If you could produce any of this evidence (let alone "all the evidence") you'd completely revolutionize economics. (Or you could be wrong.) > You pay 40%+ in income taxes right now No. You pay it once at the point you earn it. With your scheme you keep paying the taxes over time. The longer you save it the more goes away in taxes.
- rayhano 14y agoAnd if you spend money on 'living well', that is a massive increase in GDP through money being recycled in the system... which is what fuels the economy. i.e. it's a good thing
- rogerbinns 14y agoWhy don't I go around breaking all the windows in my town every night? All the extra money spent and being recycled through the system would fuel the economy - it must be a good thing? This is known as http://en.wikipedia.org/wiki/Broken_window_fallacy http://en.wikipedia.org/wiki/Broken_window_fallacy