6614

Hmmm, I’m not sure how to answer that because the phrasing tells me we’re talking about very different things or at least coming at this from a completely different place. A wealth tax, IMO, isn’t about preventing Amazon from being successful or from people being rich. I’m going to think about it a bit and see if I can think of a way of rephrasing what I was initially asking about, in regards to the impact of a wealth tax on the likes of Gates, Bezos, etc.

6615

This is a common confusion between earning and increases in net worth. In the last ten year the median house price in San Franscisco. went from ~$700K to $1.4 million. Do you think some one In San Francisco earned $70,000 a year just by owning a house? Could they buy grocery, clothes with the earnings? Bernie and Elizabeth and much of the progressive press reinforce for this confusion by claiming that Zuckerberg or Bezo made $10 billion last year, when no such thing actually happened.

Berkshire stock increase from 200 to 220 so far this year. Thus, the value of Buffett 16% ownership share of the company increase by $8 billion. I never claimed that it would drive billionaires into the poor house. I simply claimed that would be forced to sell shares of their company to pay the weatlh tax @Menzo disagree with me. Having watched entrepreneur fight like hell to maintain control of their companies I know this would be a huge factor in their actions.

With a 6% wealth tax (I believe that’s Elizabeth latest proposal.) The ownership stake of a multi-billionaire will be cut in ~1/2 after 10 years. (.94^10). One thing is a mathematical certainty unless new billionaires emerge, the revenue generated by her wealth tax will be cut in 1/2 after those 10 years.

I believe the unintended consequence of wealth tax would be happen far quicker and would be pretty severe. At minimum it would highly discourage the starting of potential unicorns in the US.

6616

So why stop there? If you have a net worth $93,000 you are in the top 10% of global wealth, and $875K puts you in the top 1% of the world’s wealth. Shouldn’t we be redistributing the great wealth of Americans to the rest of the world? Do American really deserve 300x more median wealth than Haitians?

6617

Your reductio is absurdum. But I’ll play along and say, sure, if the American people choose to do that, then we can: we live in a democracy. (And we do redistribute our wealth to the rest of the world, albeit on a completely trivial scale.)

6618

This is a certainty. I mean the whole idea of a wealth tax is basically a fantasy anyway, because even if Warren was elected, and even if Dems took the Senate back, I seriously doubt you could get even every Dem to agree to it.

But let’s pretend that it somehow happened. The people who would benefit most from it would be tax avoidance lawyers, the smarter of which are probably already coming up with creative, legal, ways to mask wealth. There are probably myriad ways to do it, especially for people who’s wealth is tied up in things that are valued subjectively. And that’s probably most of these people, because I doubt there are many billionaires who hold their wealth in cash.

So, while I’m not against the idea, I think it’s probably unworkable, and thing a plan that involves two,parts would be a smarter way to address the issue at hand:

  1. Increase the income tax to much higher levels for the ultra rich, and stop treating capital gains differently at a certain wealth level. If most of your income is from capital gains, it should be taxed like regular income above a certain amount, so as not to trip up middle class retirees.

  2. Figure out a way to better incentivize these billionaires to churn their wealth back into the economy. Bill Gates’ $100 billion in stock is doing nobody any good. Can we get him to voluntarily cash more out each year and create more jobs with it?

Maybe a mix of the two - if you spend X% of your wealth in a year we’ll cut you a break on taxes. I dunno.

6619

From a philosophical point of view, adjusted for the cost of living, no.

But only after you make adjustments for the cost of living.

In Germany, you used to have an unspoken rule that the CEO shouldnt make more then 1,000 times the least employee. I think it’s a pretty good rule.

6620

I’ve called this out before, but direct intranational equity comparisons like this are less than useless, they are actively misleading. Their only relevance comes when looking to transition from one country to another, to illustrate the difficulty.

A person with $10,000 in net worth in India is better, or at worst on par with off than one with $100,000 in the US, simply because the cost of living is so much lower.

Apartment rents are $100-200/ month in their equivalent to LA. It is not valid to compare 1:1 like that, and you know it.

6621

I haven’t thought about this terribly hard so don’t crucify me but i suspect part of the problem today is that thanks to the derivatives marketization of “contractual” wealth there’s considerably more “money” in the system than economic activity, maybe even 2-10x more. This has some very weird effects - for example you’d have thought that the top 1% own 50% of real estate or land, or own 50% of all economic activity, yet this is clearly not the case.

In other words the connection between % of wealth and % of economic production is far shakier today than ever before.

6622

If you want to redistribute income, then by all means increase the income tax.

If you want to discourage rent-seeking, then increase the capital gains tax and/or the estate tax.

But a wealth tax is basically a tax on savings. It makes no sense unless you want to encourage consumption.

6623

So our tax laws are pretty messed up, I mean seriously screwed. You can rarely even get the same answer twice from the IRS itself. This does not have to be this way. We just have a bunch of people tied to the industry that keeps convincing everyone it does. The answer to a screwball tax code is not to start worrying your fingers raw that somewhere out there is someone with more money than you think is okay, it’s to fix the tax code. A Democrat might actually have a chance of doing that, and they don’t have to do it by turning every billionaire, millionaire or whatever arbituary number someone comes up with into some sort of cartoon villain.

We can tax the wealthy, even by a lot, without needlessly worrying about whether or not someone thinks it’s okay to be ultra rich or not. Tax the hell out of that top income bracket. Fix the tax code, and if you are worried about people buying up politicians, fix the damn laws so you can arrest their asses for bribery.

6624

Well, after a certain point, don’t we want to tax savings, so that it will push people to use it?

I mean, Matthew talks about it in 25:14-30. You should not just bury your wealth.

6625

The answers would be much more consistent if we funded the IRS, and they had ability to get the work done properly. We could use part of the wealth tax to pay for that. Win win.

6626

Yeah we can do that. Go for it. But we don’t need to worry about whether some billionaire exists in order to do that.

We do, however, need to get a Democrat in the White House to even stand a chance, and this craziness… it’s not going help. Oh i am sure the already going to vote D’s will line on up ready to pound the shit of rich people to see what coins pop out, but last I checked I thought we hoping to get just a few more than the dyed in blue D’s this time around.

6627

Income inequality has been a signature issue for Democrats for the last two election cycles. Both income and wealth inequality have steadily increased for the last 30 years and the trend continues upwards. The end of this trajectory is a failed state: pure oligarchy with gentry in their secure estates, state security forces in their pockets, while the huge masses starve and scrape by outside the walls. We may be building a wall on our southern border, but we’re building Mexico anyway inside it. This is like climate change: a dire situation that is getting worse all the time, but it’s too heavy a political lift to do anything about and we’re just going to have to ride out the consequences. Oh well. This little island in time, where it seemed like the vision of society with opportunity for everyone and provision for the least of these was within our grasp, was always a chimera. We’re fortunate to have lived now. Sorry kids, sucks to be you.

6628

And our tax brackets were royally screwed over in favor of the rich for longer than that. It’s not unrelated. You don’t have to do extreme mind acrobats to explain the evils of richness in order to go back to the tax brackets which also coincided with smaller gaps in income inequality.

6629

Why do some people believe that it is right to tax income but wrong to tax savings? Is there an argument from morality or principles or pragmatics here that is being assumed rather than articulated?

We already tax wealth. We just confine ourselves to taxing trivial wealth while steadfastly refusing to tax massive wealth. Why?

6630

I can’t grasp what you’re arguing, sorry. Are you saying that, as a fact, taxes on wealth are punishment? Or are you saying that some people speak about taxing wealth as if it were punishment?

6631

…or reduce the wealth of very wealthy people.

6632

People think that some how, because the wealth is sitting around doing nothing, it is sacred. No the dirty money that is actually used should be taxed, because people that spend money are lesser beings that deserve nothing but scorn.

At least, that’s I how I assume the GOP sees it.

6633

As a follow up to this (and I’m asking in good faith, I honestly want to understand all this better), is a property tax an existing form of a wealth tax or is that functionally different? I bought my house, and it is an asset, but I am taxed on it each year.