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> I'd much prefer simply stopping that cost basis reset instead of implementing a wealth tax. Neither of these would really work against the people you actuall

> I'd much prefer simply stopping that cost basis reset instead of implementing a wealth tax. Neither of these would really work against the people you actually want it to work against. If you don't have a basis reset then they just do a transaction that has the same effect, e.g. create a new corporation owned by the recipient and then have it repeatedly enter into slightly favorable transactions with the one owned by the donor until the new one has all the assets, or any of a hundred other things. If you try to do a wealth tax then their assets end up in another country under whatever arrangement is necessary to give them de facto control but not formal ownership. The best way to solve the "buy, borrow, die" thing is actually a consumption tax because then borrowing money in order to spend it doesn't avoid the tax.

Manuel_D 5mo ago
That scheme still wouldn't work. When that new corporation is first formed, it's near worthless. After the series of favorable deals, the value of each share in that corporation goes up. Thus it still incurs capital gains taxes. Of course people will try to cheat taxes, but they'll try to cheat any form of tax: income, capital gains, inheritance taxes, etc. People are good to try and evade taxes regardless of the tax mechanism. Consumption taxes are regressive: a sales tax is a flat tax that taxes a billion on their $10 latte the same as a poor person. Consumption also doesn't scale linearly with wealth: most billionaires don't consume 1000x as much as a millionaire.
- AnthonyMouse 5mo ago
  > After the series of favorable deals, the value of each share in that corporation goes up. Thus it still incurs capital gains taxes. Only if you sell the shares, which they easily resolve by not doing. > People are good to try and evade taxes regardless of the tax mechanism. Which is why you should use the ones that are less susceptible to it rather than the ones that are more susceptible to it. Trying to identify the country in which "profit" is earned in an international supply chain, or value non-fungible assets not undergoing transactions, are easy to game. "You pay a given percentage when you buy something" is hard to game. > Consumption taxes are regressive: a sales tax is a flat tax that taxes a billion on their $10 latte the same as a poor person. The existing "progressive" income tax and benefits programs do worse than that: The billionaire pays less on $10 in marginal income than a poor person, because the taxes and benefits phase outs result in absurdly high marginal rates on the poor. > Consumption also doesn't scale linearly with wealth: most billionaires don't consume 1000x as much as a millionaire. Only if you're looking for it in the wrong place. A billionaire isn't going to buy a billion dollars in lattes, they're going to invest in some business ventures, which in turn are going to spend the money on equipment and vehicles and utilities and so on, i.e. consumption. You don't get a return on capital by sticking it in a mattress, you get a return by spending it to build or operate something.
  - Manuel_D 5mo ago
    > The billionaire pays less on $10 in marginal income than a poor person, because the taxes and benefits phase outs result in absurdly high marginal rates on the poor. This is just patently false. The highest marginal income tax rate is 37%. If you've read articles claiming that billionaires pay some absurdly low tax rate, those articles are counting their capital gains as income. Which is just a flat out lie, since those gains don't actually get taxed until the gains are realized, and the value of that capital can go down.
    - AnthonyMouse 5mo ago
      > This is just patently false. The highest marginal income tax rate is 37%. Account for benefits phase outs as the tax on marginal income that they are and the marginal tax rate on lower income people is often well in excess of 37%. In some cases it has been in excess of 100% because many of the phase outs overlap and also combine with ordinary taxes.
SoftTalker 5mo ago
I'd like to see all taxes replaced by consumption, sales, and/or value-added taxes, with an automatic rebate to offset the regressiveness. It would kind of end up being UBI with a vastly simpler tax code.
- Manuel_D 5mo ago
  This would be an extremely regressive tax regime, effectively a flat tax rate. Worse than a flat tax rate, actually, since consumption rates do not scale linearly with income or wealth.
  - DontBreakAlex 5mo ago
    I think he meant that you'd have the brackets apply to types of consumption instead of income level, so no tax on food, low tax on restaurants, medium tax on high-end electronics, insane tax on planes and yachts. I mean it sounds like it would be easier to maintain/enforce such tiering system than constantly fight with people trying to not technically be wealthy. Downside of course is that some people's luxuries are other's basic needs, but I wonder if there's been serious research on the implications of such system.
    - MeherunJessi 5mo ago
      [dead]
    - SoftTalker 5mo ago
      Easiest thing would be to not have any tiers of consumption. The stuff people "need" to spend money on such as food and housing would be handled by an automatic rebate, effectively a UBI. No other welfare, assistance, etc. What you earn you keep, unless you spend it, then you pay tax.
      - frmersdog 5mo ago
        Boy, that's going to suck for people whose credit situation has shut them out of most traditional housing situations. Or people who rely on what other people don't consider food for sustenance, for whatever reason (protein powder? multivitamins? supplies to grow/produce your own foodstuffs?). Just as examples.
greedo 5mo ago
Consumption taxes are regressive in general and in particular with the 1%, they simply don't spend enough to have it impact their lifestyles.
- AnthonyMouse 5mo ago
  This is what parrots continuously say while ignoring that the original problem was that in the existing system they not only don't pay taxes on the money they don't spend, they don't even pay taxes on the money they do spend, because they can borrow what they want to spend instead of using taxable income and then defer capital gains or keep assets in shell corporations. Getting from that to where they at least pay the same taxes as anyone else on the money they actually spend would be a marked improvement.
  - greedo 5mo ago
    Yes, getting them to pay "something" is a good goal, but if it hurts people who are financially vulnerable is non-optimal.
    - AnthonyMouse 5mo ago
      We already know how to solve that one though. You now have corporations and billionaires actually paying the consumption tax along with everyone else, so you take that money and use it for a UBI, which causes the effective rates on lower income people to be much lower or even negative even though everyone is still paying a uniform marginal rate.

Manuel_D 5mo ago

That scheme still wouldn't work. When that new corporation is first formed, it's near worthless. After the series of favorable deals, the value of each share in that corporation goes up. Thus it still incurs capital gains taxes. Of course people will try to cheat taxes, but they'll try to cheat any form of tax: income, capital gains, inheritance taxes, etc. People are good to try and evade taxes regardless of the tax mechanism. Consumption taxes are regressive: a sales tax is a flat tax that taxes a billion on their $10 latte the same as a poor person. Consumption also doesn't scale linearly with wealth: most billionaires don't consume 1000x as much as a millionaire.

AnthonyMouse 5mo ago
> After the series of favorable deals, the value of each share in that corporation goes up. Thus it still incurs capital gains taxes. Only if you sell the shares, which they easily resolve by not doing. > People are good to try and evade taxes regardless of the tax mechanism. Which is why you should use the ones that are less susceptible to it rather than the ones that are more susceptible to it. Trying to identify the country in which "profit" is earned in an international supply chain, or value non-fungible assets not undergoing transactions, are easy to game. "You pay a given percentage when you buy something" is hard to game. > Consumption taxes are regressive: a sales tax is a flat tax that taxes a billion on their $10 latte the same as a poor person. The existing "progressive" income tax and benefits programs do worse than that: The billionaire pays less on $10 in marginal income than a poor person, because the taxes and benefits phase outs result in absurdly high marginal rates on the poor. > Consumption also doesn't scale linearly with wealth: most billionaires don't consume 1000x as much as a millionaire. Only if you're looking for it in the wrong place. A billionaire isn't going to buy a billion dollars in lattes, they're going to invest in some business ventures, which in turn are going to spend the money on equipment and vehicles and utilities and so on, i.e. consumption. You don't get a return on capital by sticking it in a mattress, you get a return by spending it to build or operate something.
- Manuel_D 5mo ago
  > The billionaire pays less on $10 in marginal income than a poor person, because the taxes and benefits phase outs result in absurdly high marginal rates on the poor. This is just patently false. The highest marginal income tax rate is 37%. If you've read articles claiming that billionaires pay some absurdly low tax rate, those articles are counting their capital gains as income. Which is just a flat out lie, since those gains don't actually get taxed until the gains are realized, and the value of that capital can go down.
  - AnthonyMouse 5mo ago
    > This is just patently false. The highest marginal income tax rate is 37%. Account for benefits phase outs as the tax on marginal income that they are and the marginal tax rate on lower income people is often well in excess of 37%. In some cases it has been in excess of 100% because many of the phase outs overlap and also combine with ordinary taxes.

SoftTalker 5mo ago

I'd like to see all taxes replaced by consumption, sales, and/or value-added taxes, with an automatic rebate to offset the regressiveness. It would kind of end up being UBI with a vastly simpler tax code.

Manuel_D 5mo ago
This would be an extremely regressive tax regime, effectively a flat tax rate. Worse than a flat tax rate, actually, since consumption rates do not scale linearly with income or wealth.
- DontBreakAlex 5mo ago
  I think he meant that you'd have the brackets apply to types of consumption instead of income level, so no tax on food, low tax on restaurants, medium tax on high-end electronics, insane tax on planes and yachts. I mean it sounds like it would be easier to maintain/enforce such tiering system than constantly fight with people trying to not technically be wealthy. Downside of course is that some people's luxuries are other's basic needs, but I wonder if there's been serious research on the implications of such system.
  - MeherunJessi 5mo ago
    [dead]
  - SoftTalker 5mo ago
    Easiest thing would be to not have any tiers of consumption. The stuff people "need" to spend money on such as food and housing would be handled by an automatic rebate, effectively a UBI. No other welfare, assistance, etc. What you earn you keep, unless you spend it, then you pay tax.
    - frmersdog 5mo ago
      Boy, that's going to suck for people whose credit situation has shut them out of most traditional housing situations. Or people who rely on what other people don't consider food for sustenance, for whatever reason (protein powder? multivitamins? supplies to grow/produce your own foodstuffs?). Just as examples.

greedo 5mo ago

Consumption taxes are regressive in general and in particular with the 1%, they simply don't spend enough to have it impact their lifestyles.

AnthonyMouse 5mo ago
This is what parrots continuously say while ignoring that the original problem was that in the existing system they not only don't pay taxes on the money they don't spend, they don't even pay taxes on the money they do spend, because they can borrow what they want to spend instead of using taxable income and then defer capital gains or keep assets in shell corporations. Getting from that to where they at least pay the same taxes as anyone else on the money they actually spend would be a marked improvement.
- greedo 5mo ago
  Yes, getting them to pay "something" is a good goal, but if it hurts people who are financially vulnerable is non-optimal.
  - AnthonyMouse 5mo ago
    We already know how to solve that one though. You now have corporations and billionaires actually paying the consumption tax along with everyone else, so you take that money and use it for a UBI, which causes the effective rates on lower income people to be much lower or even negative even though everyone is still paying a uniform marginal rate.