Well I’m glad someone was able to phrase that concept in a way that made sense to you.
Once is a tax that occurs when you are already spending money or receiving money, and one is a tax that occurs simply from the passive activity of having wealth. Conceptually, those taxes are different.
Houngan
2775
You’re dumb and the thing you said is dumb. I say that with like a 20% wink emoticon, but you really don’t get to have that perceived comeuppance and walk away. Your Rothko argument was reductive and foolish. You still rely on, at least, the societally funded construct of law and order that prevents me from walking in and taking your Rothko, much less the dozens of other societally funded organisms that keep wherever your Rothko is being kept from becoming a lawless wasteland.
The great thing about the societally funded construct of law and order is that (at least theoretically) it’s applied equally, not based on how much you have and what it’s worth. If I’m walking down the street and I get mugged, the cop is going to chase after the mugger whether I have $10 in my wallet or $1000. And honestly, I really don’t think you would want to live in a society where police are incentivized to protect the people with more money over the people with less money.
And again, it’s like you said before: Whether I have a Rothko on my wall, or a fake painting I got from Bed Bath & Beyond, neither one needs upkeep from my fellow men and women in society. Or maybe I have it in a vault somewhere, in which case I’m paying for the hardware and the security guards and everything. But in either case, an expensive asset is not a greater burden on society.
Houngan
2777
I dunno, that kind of feels like you turned the goalposts sideways rather than forward or backwards. Elaborate or don’t.
I don’t know what you want me to elaborate on. I thought you and other people already said it really well:
+1, Liked, Upvoted.
There’s a couple of arguments; one would be that even the most passive wealth needs to be defended, which is one of the most basic and costly activities of a nation state. E.g. if current trend lines continue, at some point Bezos will own 100% of all wealth in the US, but will pay $0 in taxes to fund the military which defends his titanic wealth. This concern was super clear in ancient Greek history, e.g. if a city-state had to fight a war, most of the money was levied from the rich and upper classes. The hoi-polloi were only directly taxed if things became super dire. So security is one large concern, but there’s probably other related concerns like “paying to maintain a habitable biosphere”.
Another argument would be that there is a societal interest in making sure that no one person accumulates too much financial power. There’s plenty of quotes about this through American history, about the destructive effects of concentrated wealth, or we can just look at the transcript of Manchin’s call yesterday where the only people who were represented in any way were the mega-donors.
If it makes it easier, I think people are only proposing wealth taxes on the ultra-rich. So there’s no need to worry unless you are a billionaire or a temporarily embarrassed billionaire. :D
You understand that this is literally impossible, right?
I don’t think a bad idea becomes palatable just because it’s not being done to you. I would vehemently oppose an additional 10% tax on left-handed people, even though I’m not one myself.
…all crime will be eradicated!
Houngan
2782
Palatability comes from appreciating the differential in taxation rates between us normies and the filthy wealthy, what’s your thought on that? No difference?
I think that in general, the filthy wealthy still pay a higher percentage of their income in taxes than the majority of Americans, even if people don’t pay taxes on unrealized gains.
Banzai
2784
That is so much bullshit. Wow.
Glad we finally got past the ‘wealth tax isn’t a tax, hurdur’, but this one I am not even going to attempt to engage on.
Houngan
2785
Well, I think specifically they absolutely do pay a higher rate on their income, but that dodges so many facets of income vs. wealth vs. short and long term capital gains. It’s a non-argument in this context. If you aren’t addressing income avoidance by stock grants/options, offshoring, etc. then you’re really not even in the game.
When you ignore every answer and respond with “But why are wealth taxes WRONG?”, then yes, that’s not a dialogue.
Houngan
2788
Eh, I’m willing to climb the hill because I don’t give two shits, so I can keep it friendly and leave it if necessary. We started out with a sentence that taken with no context was pretty fuzzy, “tax capital gains” which brings in effectively my and most people under 60’s retirement plans. Then we cleaned it up and clarified what we were really talking about and found basic accord. If the argument can’t address what has already been addressed, then the argument is pointless. I’m always curious if there’s a point I’m missing, I guess, regardless of likelihood.
Houngan
2789
Like this! A simple one sentence response to another single cherrypicked sentence. We moved well beyond that a bit after lunchtime. Andy, can you summarize what we’re actually discussing right now? Not just you, the discussion in general?
Didn’t we have this argument about wealth taxes a few years ago? Deja Vu…
I think taking point in time taxes on investment balqnces is feasible, but one has to recognize it would be at a rate closer to property tax (e.g. 1%) rather than capital gains tax. Technically it isn’t so complicated even for the taxpayer to implement, since my guestimate is most people have at least 1% of their total wealth in a checking or demand deposit savings account (and often much more than 1%). I think the same is likely true, or trivial to adjust to, for most companies and major investors.
I think part of the argument against is because some people are describing this as a tax on unrealized capital gains. I think it’s more useful to describe it as a broader definition of property tax - to include not only real estate, but also other forms of property like investments and savings accounts.
There are some technical issues besides valuation. What if a person has very high property values but spends down the entirety before December 31? Do we incentivize that by recognizing it as a zero, or punish it by taxing the average of the month or year to discourage this type of fire sale and spend before the day of? How do we handle international transfers out of country, and property outside of the country? Are we looking at gross assets, or net assets?nNot impossible to overcome, but something to consider.
In a perfect world we’d simply impose this type of blanket property tax at a level to cover the federal and local fiscal expenditure plus some buffer, and zero out all other taxes. In reality it will never, ever happen - even a simple federal real estate tax seems unfathomable politically. So this and the last hundred posts are mostly an execise in creative writing.
I deleted my comment. I don’t think Andy is able to defend his premises, but perhaps that’s just me.
Houngan
2792
I wouldn’t bet against you.
Honestly, because it’s not needed to fund things, and because it’s not going to prevent “bad stuff” like pollution and corruption, or the million schemes to hide money away. And applied to competition free companies, they’ll just raise the prices.
Just funding good stuff, strengthening labor power and letting us win a few profit share battles would be better, but it seems we’re not getting to that yet, so some rounds of harebrained impractical schemes are in order.
In an age with such limited available housing and still rising prices (location depending, sure), it’s not really sustainable that people and companies can hold on to so much non-habitation investment property.
And, ultimately, if you’re not willing to pay for the impact of a limited resource usage, well bellow your capability, while often fighting anything that could damage the value, there’s no reason society should reciprocally care about your feelings. Which is why some places tax motorized vehicles or tvs (a bit outdated, that, though, and the former hasn’t budgeted anything directly in ages for reasons, but the principle isn’t scary).
The pedantic minded could call it a wealth license, although, again, it would kind of pointless in practice.
And, yet, he we are, where property is much more protected than a wallet, ponzi schemes or other frauds, violently at that.
I generally agree. A wealth tax on the order of 1-2% for some reasonable definition of very high wealth isn’t going to be hard for the person being taxed to pay, and the argument that they can’t pay it without selling assets isn’t really very compelling.
Certainly agree that the rules for determining wealth, including when to determine it, have to be worked out, but I don’t think that’s an impossible task.
