I don’t see how it could be anything but a wealth tax.
It’s a tax on your savings, at least if you accept the argument that the purpose of government incentives to own homes is to encourage the accumulation of wealth and savings.
Even the Cato Institute classes property tax as a wealth tax:
Local property taxes are also wealth taxes. They are paid by owners of residential, commercial, and industrial real property. U.S. property taxes are relatively high. As a share of gross domestic product (GDP), we have the fourth-highest property tax revenues among 36 major industrial countries.12
This hardly just global issue, same applies to right here in the US. A couple years ago I bought property, in Independence, MO for $100K (most I’ve bought are a lot cheaper $30-$50K). We’ve fixed it up pretty nice, it is objectively nicer than probably any $1 million dollar home in San Francisco and most if not all in Honolulu. If couple bought my house 10 years ago, the house would be worth roughly what they paid for maybe 10% higher they’d have increased their net worth, mostly by paying down the loan, roughly by $25K. A couple buying a starter $500K house in San Francisco 10 years ago would have increased their net worth by ~$600K. But is there standard of living better off? Probably not even if the SF couple makes twice as much as the MO couple.
Now lets flip it. Imagine a young software engineer making $250K living in San Francisco, he rents a stunning apartment in downtown, sure it costs $7,000/month, beautifully furnished with all the high tech gadgets you could imagine, original artwork and lovely furniture. He has Model 3 that he paid cash for a year ago. $10k in checking account, 30 bitcoins in coinbase., and 75K in student loans at 4% interest…
According the Federal reserve this guy has negative net worth. His only assets are cash, and car less his student debt. This puts him the bottom 20% of wealth.
Imagine the couple in Missouri they’ve accumulated $500,000 portfolio in a stocks and bond in addition to the house I talked about. They are in their late 50s and just lost their job when the company they worked for shut down. They are in the top ~20% of wealth but if they don’t find a job in year or so that wouldn’t be true much longer. In this case the wealthier person is worse of than the poorer person.
Matt_W
6637
What’s the takeaway? I confess I don’t know enough about Ohio politics to learn anything from the image:(
My takeaway was the old rural-red/urban-blue thing.
Dark blue suburbs, and then a solid wall of blood red in the rural outlying areas of those counties.
Nesrie
6640
I am saying when you say things like the rich are evil, the rich are immoral, and they shouldn’t have that much money, those people are the ones making a judgment and suggesting their motivation is a punishment. I am NOT the one that introduced evil,immoral or someone shouldn’t have x amount of money, other people did.
It is absolutely a form of a wealth tax. Proposition 13 in California was a voter lead revolt against the wealth tax. Raising house prices, led to rapidly increasing property taxes, and anyone with low income, or a fixed income was screwed. So voter put a cap on the wealth tax.
I remember hearing the same arguments against Property 13 at the time. “People who own homes are rich they should pay more in taxes, we need the money for…” Now don’t get me wrong there is plenty to dislike about the way Property 13 was implemented, but it was needed at the time.
Matt_W
6642
We have programs in place to tax privilege peoples’ nest eggs. And no one’s plan is trying to upset those. Warren’s wealth tax doesn’t even kick in until fortunes are valued at over $50 million. Any one of us with $50 million in the bank could–absent catastrophe–easily quit working and live very comfortably until we die and enable all of our family members to do the same.
Matt_W
6643
Who? I’m not sure I’ve seen that sentiment in this thread. Wealth tends to prefer policies that privilege wealth, and the influence that wealth buys makes it more likely that those policies will be actualized, but that’s not the same as saying that rich people are immoral or evil.
I think she is taking the views of a small minority (my own views actually) and applying them to everyone in this thread in favor of the wealth tax.
Which I find very offensive. There are a fair number of views on whether or not the wealthy are evil. Personally, I think they have to be. Wealth begets power and entitlement, which is the roots of evil.
But, I doubt many people on this forum agree with me.
magnet
6645
An income tax is a tax on savings and consumption.
A wealth tax is a tax on savings only.
If you want to raise $X without discouraging savings, the latter is worse then the former.
Why is it worse?
After a certain point, savings aren’t savings, its hoarding.
CraigM
6647
I am aware of internal CoL. i will also add that, housing aside, the delta between the most and least expensive places is not the 10x number. But 2x at most. Food, gas, utilities, etc are all subject to regional variance, but broadly speaking it isn’t notably more expensive here in Portland than Chicago aside from the 30-50% housing cost increase.
But none of that refutes my point. And intra national moves are easier than inter national. We can, and do, see wealthy people exploiting this, see Donnie dipshit relocating to Florida for example. Or, more accurately, we do see older persons retiring away from major expensive areas to less costly areas sometimes.
And lets be clear, the regional cost of living differences become less important once you move away from working class into capital class. The impact of housing on someone making 5-6 figures is real, and meaningful. But the fact that a $2 million home for a millionaire in the Bay isn’t as nice or large as the same money in bumfuck Alabama? I literally do not care. And the 50-100 million crew not having their second mcmansion? Crocodile tears I tell ya.
If we were talking about working class people and housing prices? Thats a meaningful conversation. But positing we shouldn’t have a wealth tax because houses in Honolulu cost more than Hicksville? Nope, not buying it.
Get your Christian rhetoric out of here. This is America!
The first McMansion should be enough to earn a trip to The National Razor.
Said in jest.
Mostly.
This strikes me as a kind of sophistry. If you reduce someone’s savings, you reduce their income on that savings, so a wealth tax is also an income tax. This is the obvious and necessary complement to your claim that an income tax is both an income tax and a savings tax.
In truth, an income tax is just a tax on income, and a wealth tax is just a tax on wealth, and talking about the knock-on effects of either is a way of obscuring the distinction.
Which leaves my questions still unanswered: Why is one permissible, while the other is beyond the pale?
magnet
6651
If someone saves $200,000, that money is (hopefully) not stashed under a mattress. It is being used by someone else. For instance, someone might use it to buy a house.
If you don’t want someone to save $200,000 then they will just blow it on expensive trinkets. And so we end up in a world with more expensive trinkets, but where fewer people can buy houses. I think that would be a worse world.
Matt_W
6652
Spoiler: Prop 13 helped boomers and fucked over everyone else. We Xers and Milennials have to cough up our 1% of the total value of our recently purchased half million dollar shoeboxes, while our parents pay 1% of the $50k 1978 valuation of their palacial estates. Meanwhile our kids don’t have couselors or school nurses or music and art programs because of state budget constraints.
magnet
6653
Income = savings + consumption.
Wealth = accumulated savings.
Not all wealth produces income.
