6 ms·

Isn't it just so much easier to make sure that wealth isn't concentrated in so few hands? Tax wealth, not work. And before everyone gets upset, tax serves two

Isn't it just so much easier to make sure that wealth isn't concentrated in so few hands? Tax wealth, not work. And before everyone gets upset, tax serves two purposes; 1) control inflation (it in effect burns money that was issued when the govt previously paid for things), 2) disincentivises selected behaviours. and one side effect, when the govt runs a tax deficit it increases inflation, and of course the contrapositive is also true.

fud3748 8mo ago
Sure, it’s easy to tax “wealth”. Except most wealth today is of the type where Alice owns 10 million Y and Bob decided to pay $1000 for one Y. Alice cannot possibly sell her Y for near that price, but now she will be taxed on “wealth” of $10 billion.
- antonyh 8mo ago
  Only in a system where the buyer sets the price.
- __MatrixMan__ 8mo ago
  Maybe we need a debt jubilee then.
- vintermann 8mo ago
  There's a very simple solution to that problem. Tax Alice in Y rather than in $.
  - AlexandrB 8mo ago
    How would this work with real-estate? Probably the Y that should be taxed the most when we're talking about wealth.
    - curtisf 8mo ago
      A lien on the property? Although almost all jurisdictions already have property taxes, so it hasn't been an insurmountable problem so far
    - vintermann 8mo ago
      Rich people are very good at coming up with ways of financializing assets to their advantage. That creativity goes away when it comes to paying taxes, for some reason. Real estate mostly isn't subject to the "I sold one for a huge sum, but the price would tank if I sold them all" effect, unless you own immensely much real estate. But either way, just a lien on sale of the properties. We can still give the option of paying wealth tax according to valuation directly (in $) instead of in natura (in Y), then there's less to complain about - and as a bonus, we get revealed preferences on how inflated people think the prices of their assets are.
- deleted 8mo ago
  [deleted]
- PunchyHamster 8mo ago
  you can tax stock without taxing inventory. Also the term "asset" exists and is used in accounting
  - worik 8mo ago
    > you can tax stock without taxing inventory. How? What is the difference between "stock" and "inventory"?
- flir 8mo ago
  So it would fix false valuation shenanigans too? I see that as a win/win.
- AaronM 8mo ago
  If someone takes a loan out against an unrealized gain, that should immediately trigger a tax event. The real solution though is for the legislative branch to not be beholden to those same people and be able to quickly and effectively close tax loopholes as they are discovered.
  - cluckindan 8mo ago
    That would instantly wipe out most leverage from the stock market, and from a casual bystander perspective, it would be a great thing.
    - pembrook 8mo ago
      It wouldn't do that. But even if it did do that, this would not be a good thing. The majority of leverage (debt) in the stock market is not people making wild bets, its just basic functions from institutions. But even if we narrow the definition to the boogeyman image you have in your head about "leverage," if you remove it you've just made the market radically less responsive to information and arbitraging prices nearly impossible, and ultimately the economy less efficient in broad strokes. You'll say "fine, who cares cause it'll stop [insert historical bubble example], and also I saw a reddit comment that said all economists are dumb!" But most people have no idea how big a role leverage (aka debt) plays in just the basic functioning of the capital markets. Putting a brake on the market might also sound good to you in theory. But the stock market is how the most important capital flows through the private economy, slowing this down is defacto slowing down the economy. Most people don't understand what slower economic growth means for your quality of life over the long term. Just 1-2% slower growth than the average, and the US's entire system collapses in 15 years (France is currently dealing with this reality in slow motion, their debt is now rated worse than Greek debt). An easier example to understand: a pie that isn't growing is a zero sum pie. Ambition in a zero-sum world requires violence.
  - njarboe 8mo ago
    Agreed. This would get rid of borrow against gains to spend tax free. But also just get rid of the income tax, it is the worst way to tax, and do a land value tax.
- croes 8mo ago
  Who says you need to tax the whole wealth if it in form of Ys? We all know that 10 million Ys maybe not sold for $10 billion dollars but it gives you enough leverage to buy a social network and name it Y
- LadyCailin 8mo ago
  Many countries have figured out a wealth tax, so this isn't an impossible problem.
  - Saline9515 8mo ago
    France had it for a very long time, it was very costly to recover, incentivized a lot of tax-evading behaviors, and mainly benefited tax specialists. Overall it was another useless, populist measure that did more harm than good.
- wat10000 8mo ago
  Oh well. Maybe if Alice doesn't want that problem she shouldn't accumulate so much of one asset that she'd crash the price trying to pay the taxes on it.
nine_k 8mo ago
With wealth concentrated in so few hands, it's already not that easy to walk it back :-/
redleader55 8mo ago
It would be so nice of that tax was actually "burned"(similar to proof of stake), instead of being used to fund even greater inflation. This comes in the form of a huge administration, which gets payed for providing, many times, negative value. Alternatively, it is used to pay social benefits for the sole purpose of keeping the current political party in power.
- swiftcoder 8mo ago
  > Alternatively, it is used to pay social benefits for the sole purpose of keeping the current political party in power This sounds like a 2-party government problem, not a tax problem. Plenty of countries do just fine spending that money to provide healthcare, unemployment, etc to their citizenry. Only really seems to be the US that views this as a negative
  - malfist 8mo ago
    Oh we spend that money, just on weapons or handouts to the welfare class known as the ultrawealthy.
    - WillPostForFood 8mo ago
      Us does spend the money on healthcare, it is just very inefficient. US government spends much more per capita than any other country. 50% than the #2 country, Germany. https://www.statista.com/statistics/283221/per-capita-health-expenditure-by-country/ https://www.statista.com/statistics/283221/per-capita-health...
      - malfist 8mo ago
        But that's mostly people/companies spending on health care, not as much the government (because that'd be socialism, apparently)
        WillPostForFood 8mo ago
jlhawn 8mo ago
> control inflation I think you are confusing cost inflation with an increase in the money supply. The way the US government funds deficit spending is not by increasing money supply (though it could) but by issuing debt in the form of US Treasury bonds. That is a transfer of money from bond investors to the government. No new money is made. This is distinct from the way that banks issue loans which is by creating new money in the form of credit (but that credit money gets "burned" as loan principal is paid back). So federal taxes do not actually control inflation in the way you are describing. Since federal deficit spending is not financed by increasing the money supply, it can only cause price inflation if it increases aggregate demand over the current productive capacity of the economy. An example would be paying more for healthcare subsidies when there's a shortage of doctors. Or subsidizing demand for housing with more mortgage subsidies when there's a housing shortage. Taxes could also increase inflation if they have the effect of reducing supply of some goods or services (like tariffs do). Edit: I want to mention that the Federal Reserve can and does increase money supply by buying US Treasury Bonds from banks (converting the asset into cash reserves). There are various reasons why they do this but overall it's done with their dual mandate in mind: control inflation and minimize unemployment.
- deleted 8mo ago
  [deleted]
- adventured 8mo ago
  > I want to mention that the Federal Reserve can and does increase money supply by buying US Treasury Bonds from banks (converting the asset into cash reserves). Fun small print. As though that's not the exact mechanism of the brutal inflation the US has suffered the past 5-6 years. The US money supply says it all. There are no other serious buyers for $20 trillion in new garbage paper debt every ten years. It's inflation by currency destruction plain and simple and there are no other paths. It's also why gold is $5,000 instead of $500.
- titzer 8mo ago
  > That is a transfer of money from bond investors to the government. No new money is made. All forms of debt are money creation. All loans are money creation. Fractional reserve banking is money creation. It doesn't have to be "oh now we are making dollar bills" to count.
AlexandrB 8mo ago
This is overly simplistic. Most economic activity is not related to the government at all. Taxation can slow economic growth and inflation, but the government running at a deficit or surplus is neither a cause or a solution for inflation but rather a byproduct of multiple aspects of government policy.
Terr_ 8mo ago
> Isn't it just so much easier to make sure that wealth isn't concentrated in so few hands? Tax wealth, not work. 1. No, it's not "easier" because it's hard-if-not-impossible to accurately and objectively judge the present-value of many types of assets. Even the case most-familiar to working-class folks, property taxes, nobody really likes/trusts the outcome. 2. We don't tax work, we tax income, because actual transactions between people with "skin in the game" are harder to fake. The extent to which wages are preferred as a subset of income is separate from the wealth-vs-income split.
- astrange 8mo ago
  > 2. We don't tax work, we tax income, because actual transactions between people with "skin in the game" are harder to fake. Also because taxing income (or other cash) is disinflationary. Taxing assets is inflationary because it forces sales.
  - jhasse 8mo ago
    Shouldn't sales reduce inflation because they increase supply?
    - astrange 8mo ago
      Selling things increases money velocity.
  - usefulcat 8mo ago
    > Taxing assets is inflationary because it forces sales. I can see how taxing assets could result in more selling than would have occurred otherwise. But all else being equal, an increase in selling tends to put downward pressure on prices. So I don't see why an asset tax would be expected to cause inflation.
- cogman10 8mo ago
  > No, it's not "easier" because it's hard-if-not-impossible to accurately and objectively judge the present-value of many types of assets. Even the case most-familiar to working-class folks, property taxes, nobody really likes/trusts the outcome. You can easily get within 10% of the "real" value on most assets. And, in particular, assets like stock have a built in ticker to tell you their exact current value. This sort of evaluation happens all the time privately. For example, car insurance companies have gotten extremely good at evaluating the value of a car to determine when to simply total it. The only thing that really makes it tricky is hidden assets or assets with no market value. The likes of the richest people, who I think most of the "tax wealth" people are thinking of, have the majority of their wealth in equity. It's easy to tax the majority of their wealth. This does not need to be a perfect system to be very effective at generating revenue and redistributing wealth.
Saline9515 8mo ago
Wealthy people own assets, not money. Stealing their assets doesn't reduce the money supply. Elon Musk is "rich" mainly in paper wealth. Taxes raise inflation as they increase the production costs. If you tax too much wealthy people, they will leave, and take their capital away to invest it elsewhere. This as a result will lead to inflation due to lack of available capital for production.
- ghurtado 8mo ago
  > If you tax too much wealthy people, they will leave Are we not tired yet of the various versions of the Reaganomics boogieman? When are we going to grow out of trickle down economics mentality?
  - Saline9515 8mo ago
    The problem is black-and-white thinking that ignores reality. There are different kinds of wealthy people. Some built their wealth through talent and luck. Some inherited it. Some gained it through state cronyism and clientelism. Some own scarce assets (like real estate). Others created new assets (e.g., startup founders). You can dislike Elon Musk, but his owning a large stake in Tesla doesn’t make others poorer. That’s not true of a landlord who corners housing supply in a city. Wealth taxes are essentially revenge taxes without a clear objective. France tried one for years. It was costly to administer, riddled with exemptions, encouraged avoidance instead of productivity, and sustained an industry of tax specialists. The revenue was largely recycled into clientelist spending, sometimes increasing the wealth of the same elites (e.g., via housing subsidies). If the goal is to curb land hoarding, implement a land value tax. If it’s to reduce dynastic concentration, tax large single-heir inheritances more heavily and lower the rate when estates are widely divided. If it’s to reduce cronyism, cut state spending, simplify regulation, and strengthen competition.
- mulmen 8mo ago
  > If you tax too much wealthy people, they will leave You say this like it’s a bad thing.
ghurtado 8mo ago
> Isn't it just so much easier to make sure that wealth isn't concentrated in so few hands? Except for the fact that, without first solving the problem you responded to, yours is impossible to solve
PlatoIsADisease 8mo ago
This wouldn't stop the AMA from controlling medicine.
simplify 8mo ago
Since when has raising taxes actually solved any major problem? We have enough taxes, the issue is the corrupt politicians swindling it to themselves and their cronies.
- direwolf20 8mo ago
  You pay enough. Musk doesn't. Does he even pay any at all?
mcnnowak 8mo ago
Wealth tax will just create an industry around hiding wealth for the rich
chongli 8mo ago
Isn't it just so much easier to make sure that wealth isn't concentrated in so few hands? Tax wealth, not work. Those tax dollars just go back to the wealthy in the form of interest payments on government bonds, which they own.

fud3748 8mo ago

Sure, it’s easy to tax “wealth”. Except most wealth today is of the type where Alice owns 10 million Y and Bob decided to pay $1000 for one Y. Alice cannot possibly sell her Y for near that price, but now she will be taxed on “wealth” of $10 billion.

antonyh 8mo ago
Only in a system where the buyer sets the price.
__MatrixMan__ 8mo ago
Maybe we need a debt jubilee then.
vintermann 8mo ago
There's a very simple solution to that problem. Tax Alice in Y rather than in $.
- AlexandrB 8mo ago
  How would this work with real-estate? Probably the Y that should be taxed the most when we're talking about wealth.
  - curtisf 8mo ago
    A lien on the property? Although almost all jurisdictions already have property taxes, so it hasn't been an insurmountable problem so far
  - vintermann 8mo ago
    Rich people are very good at coming up with ways of financializing assets to their advantage. That creativity goes away when it comes to paying taxes, for some reason. Real estate mostly isn't subject to the "I sold one for a huge sum, but the price would tank if I sold them all" effect, unless you own immensely much real estate. But either way, just a lien on sale of the properties. We can still give the option of paying wealth tax according to valuation directly (in $) instead of in natura (in Y), then there's less to complain about - and as a bonus, we get revealed preferences on how inflated people think the prices of their assets are.
deleted 8mo ago
[deleted]
PunchyHamster 8mo ago
you can tax stock without taxing inventory. Also the term "asset" exists and is used in accounting
- worik 8mo ago
  > you can tax stock without taxing inventory. How? What is the difference between "stock" and "inventory"?
flir 8mo ago
So it would fix false valuation shenanigans too? I see that as a win/win.
AaronM 8mo ago
If someone takes a loan out against an unrealized gain, that should immediately trigger a tax event. The real solution though is for the legislative branch to not be beholden to those same people and be able to quickly and effectively close tax loopholes as they are discovered.
- cluckindan 8mo ago
  That would instantly wipe out most leverage from the stock market, and from a casual bystander perspective, it would be a great thing.
  - pembrook 8mo ago
    It wouldn't do that. But even if it did do that, this would not be a good thing. The majority of leverage (debt) in the stock market is not people making wild bets, its just basic functions from institutions. But even if we narrow the definition to the boogeyman image you have in your head about "leverage," if you remove it you've just made the market radically less responsive to information and arbitraging prices nearly impossible, and ultimately the economy less efficient in broad strokes. You'll say "fine, who cares cause it'll stop [insert historical bubble example], and also I saw a reddit comment that said all economists are dumb!" But most people have no idea how big a role leverage (aka debt) plays in just the basic functioning of the capital markets. Putting a brake on the market might also sound good to you in theory. But the stock market is how the most important capital flows through the private economy, slowing this down is defacto slowing down the economy. Most people don't understand what slower economic growth means for your quality of life over the long term. Just 1-2% slower growth than the average, and the US's entire system collapses in 15 years (France is currently dealing with this reality in slow motion, their debt is now rated worse than Greek debt). An easier example to understand: a pie that isn't growing is a zero sum pie. Ambition in a zero-sum world requires violence.
- njarboe 8mo ago
  Agreed. This would get rid of borrow against gains to spend tax free. But also just get rid of the income tax, it is the worst way to tax, and do a land value tax.
croes 8mo ago
Who says you need to tax the whole wealth if it in form of Ys? We all know that 10 million Ys maybe not sold for $10 billion dollars but it gives you enough leverage to buy a social network and name it Y
LadyCailin 8mo ago
Many countries have figured out a wealth tax, so this isn't an impossible problem.
- Saline9515 8mo ago
  France had it for a very long time, it was very costly to recover, incentivized a lot of tax-evading behaviors, and mainly benefited tax specialists. Overall it was another useless, populist measure that did more harm than good.
wat10000 8mo ago
Oh well. Maybe if Alice doesn't want that problem she shouldn't accumulate so much of one asset that she'd crash the price trying to pay the taxes on it.

nine_k 8mo ago

With wealth concentrated in so few hands, it's already not that easy to walk it back :-/

redleader55 8mo ago

It would be so nice of that tax was actually "burned"(similar to proof of stake), instead of being used to fund even greater inflation. This comes in the form of a huge administration, which gets payed for providing, many times, negative value. Alternatively, it is used to pay social benefits for the sole purpose of keeping the current political party in power.

swiftcoder 8mo ago
> Alternatively, it is used to pay social benefits for the sole purpose of keeping the current political party in power This sounds like a 2-party government problem, not a tax problem. Plenty of countries do just fine spending that money to provide healthcare, unemployment, etc to their citizenry. Only really seems to be the US that views this as a negative
- malfist 8mo ago
  Oh we spend that money, just on weapons or handouts to the welfare class known as the ultrawealthy.
  - WillPostForFood 8mo ago
    Us does spend the money on healthcare, it is just very inefficient. US government spends much more per capita than any other country. 50% than the #2 country, Germany. https://www.statista.com/statistics/283221/per-capita-health-expenditure-by-country/ https://www.statista.com/statistics/283221/per-capita-health...
    - malfist 8mo ago
      But that's mostly people/companies spending on health care, not as much the government (because that'd be socialism, apparently)
      - WillPostForFood 8mo ago

jlhawn 8mo ago

> control inflation I think you are confusing cost inflation with an increase in the money supply. The way the US government funds deficit spending is not by increasing money supply (though it could) but by issuing debt in the form of US Treasury bonds. That is a transfer of money from bond investors to the government. No new money is made. This is distinct from the way that banks issue loans which is by creating new money in the form of credit (but that credit money gets "burned" as loan principal is paid back). So federal taxes do not actually control inflation in the way you are describing. Since federal deficit spending is not financed by increasing the money supply, it can only cause price inflation if it increases aggregate demand over the current productive capacity of the economy. An example would be paying more for healthcare subsidies when there's a shortage of doctors. Or subsidizing demand for housing with more mortgage subsidies when there's a housing shortage. Taxes could also increase inflation if they have the effect of reducing supply of some goods or services (like tariffs do). Edit: I want to mention that the Federal Reserve can and does increase money supply by buying US Treasury Bonds from banks (converting the asset into cash reserves). There are various reasons why they do this but overall it's done with their dual mandate in mind: control inflation and minimize unemployment.

deleted 8mo ago
[deleted]
adventured 8mo ago
> I want to mention that the Federal Reserve can and does increase money supply by buying US Treasury Bonds from banks (converting the asset into cash reserves). Fun small print. As though that's not the exact mechanism of the brutal inflation the US has suffered the past 5-6 years. The US money supply says it all. There are no other serious buyers for $20 trillion in new garbage paper debt every ten years. It's inflation by currency destruction plain and simple and there are no other paths. It's also why gold is $5,000 instead of $500.
titzer 8mo ago
> That is a transfer of money from bond investors to the government. No new money is made. All forms of debt are money creation. All loans are money creation. Fractional reserve banking is money creation. It doesn't have to be "oh now we are making dollar bills" to count.

AlexandrB 8mo ago

This is overly simplistic. Most economic activity is not related to the government at all. Taxation can slow economic growth and inflation, but the government running at a deficit or surplus is neither a cause or a solution for inflation but rather a byproduct of multiple aspects of government policy.

Terr_ 8mo ago

> Isn't it just so much easier to make sure that wealth isn't concentrated in so few hands? Tax wealth, not work. 1. No, it's not "easier" because it's hard-if-not-impossible to accurately and objectively judge the present-value of many types of assets. Even the case most-familiar to working-class folks, property taxes, nobody really likes/trusts the outcome. 2. We don't tax work, we tax income, because actual transactions between people with "skin in the game" are harder to fake. The extent to which wages are preferred as a subset of income is separate from the wealth-vs-income split.

astrange 8mo ago
> 2. We don't tax work, we tax income, because actual transactions between people with "skin in the game" are harder to fake. Also because taxing income (or other cash) is disinflationary. Taxing assets is inflationary because it forces sales.
- jhasse 8mo ago
  Shouldn't sales reduce inflation because they increase supply?
  - astrange 8mo ago
    Selling things increases money velocity.
- usefulcat 8mo ago
  > Taxing assets is inflationary because it forces sales. I can see how taxing assets could result in more selling than would have occurred otherwise. But all else being equal, an increase in selling tends to put downward pressure on prices. So I don't see why an asset tax would be expected to cause inflation.
cogman10 8mo ago
> No, it's not "easier" because it's hard-if-not-impossible to accurately and objectively judge the present-value of many types of assets. Even the case most-familiar to working-class folks, property taxes, nobody really likes/trusts the outcome. You can easily get within 10% of the "real" value on most assets. And, in particular, assets like stock have a built in ticker to tell you their exact current value. This sort of evaluation happens all the time privately. For example, car insurance companies have gotten extremely good at evaluating the value of a car to determine when to simply total it. The only thing that really makes it tricky is hidden assets or assets with no market value. The likes of the richest people, who I think most of the "tax wealth" people are thinking of, have the majority of their wealth in equity. It's easy to tax the majority of their wealth. This does not need to be a perfect system to be very effective at generating revenue and redistributing wealth.

Saline9515 8mo ago

Wealthy people own assets, not money. Stealing their assets doesn't reduce the money supply. Elon Musk is "rich" mainly in paper wealth. Taxes raise inflation as they increase the production costs. If you tax too much wealthy people, they will leave, and take their capital away to invest it elsewhere. This as a result will lead to inflation due to lack of available capital for production.

ghurtado 8mo ago
> If you tax too much wealthy people, they will leave Are we not tired yet of the various versions of the Reaganomics boogieman? When are we going to grow out of trickle down economics mentality?
- Saline9515 8mo ago
  The problem is black-and-white thinking that ignores reality. There are different kinds of wealthy people. Some built their wealth through talent and luck. Some inherited it. Some gained it through state cronyism and clientelism. Some own scarce assets (like real estate). Others created new assets (e.g., startup founders). You can dislike Elon Musk, but his owning a large stake in Tesla doesn’t make others poorer. That’s not true of a landlord who corners housing supply in a city. Wealth taxes are essentially revenge taxes without a clear objective. France tried one for years. It was costly to administer, riddled with exemptions, encouraged avoidance instead of productivity, and sustained an industry of tax specialists. The revenue was largely recycled into clientelist spending, sometimes increasing the wealth of the same elites (e.g., via housing subsidies). If the goal is to curb land hoarding, implement a land value tax. If it’s to reduce dynastic concentration, tax large single-heir inheritances more heavily and lower the rate when estates are widely divided. If it’s to reduce cronyism, cut state spending, simplify regulation, and strengthen competition.
mulmen 8mo ago
> If you tax too much wealthy people, they will leave You say this like it’s a bad thing.

ghurtado 8mo ago

> Isn't it just so much easier to make sure that wealth isn't concentrated in so few hands? Except for the fact that, without first solving the problem you responded to, yours is impossible to solve

PlatoIsADisease 8mo ago

This wouldn't stop the AMA from controlling medicine.

simplify 8mo ago

Since when has raising taxes actually solved any major problem? We have enough taxes, the issue is the corrupt politicians swindling it to themselves and their cronies.

direwolf20 8mo ago
You pay enough. Musk doesn't. Does he even pay any at all?

mcnnowak 8mo ago

Wealth tax will just create an industry around hiding wealth for the rich

chongli 8mo ago

Isn't it just so much easier to make sure that wealth isn't concentrated in so few hands? Tax wealth, not work. Those tax dollars just go back to the wealthy in the form of interest payments on government bonds, which they own.