Wealth Taxes...an intelligent discussion

[El Presidente]

Wealth Taxes...an intelligent discussion...well I am hopeful. 

This is not solely a US topic. It is a topic in Australia and many Western countries. 

Discussion Prologue. 

General consensus?

• Property prices and rent increases in many parts of the West have shot a hole through the hearts of many under the age of 30-35 
• Government waste and a hand out culture is rife. 
• Government and Traditional media is on the nose. 
• Trust in institutions is at all time low. 
• We love democracy. 
• The top 5% of income earners in Oz/US contribute some 61% of income taxes. You can look up the figures in your own country. 
• The wealthy are the most mobile in terms of selecting a tax regime. 
• AI disruption has just started

Is the capitalist system broken?

If so, how can it be repaired? 

Are wealth taxes a trickle down band-aid or a genuine solution? 

Big topic. One that affects many of us, our kids, our future. 

 

[ha_banos]

Interestingly you've just had Gary Stephenson over there. And you missed government corruption. Rife over here. More later.

 

[Dr vonPuffenberg]

I have plenty of opinions about how we got in such a mess but I’ll keep those to myself for now. A wealth tax is BS. The wealth was earned legally under the laws of the time and place, it shouldn’t be retroactively taxed again. If the government wants more money, they need to raise taxes going forward. Thankfully I’m not the target of this, haha!

[El Presidente]

10 hours ago, Dr vonPuffenberg said:

 A wealth tax is BS. The wealth was earned legally under the laws of the time and place.

Retrospective wealth taxes = state asset seizure?

There is indeed an argument to be made 

I don't see how it solves our predicament moving forward however. 

I would love to see a clean whiteboard on the issue as a collaborative venture by all stakeholders with a target commencement of say 2030.

Rewrite a broken rule book with perhaps one of the first rules under the new revised system being that it is illegal for government (any level) to run a budgetary deficit. 

[Li Bai]

I believe transparency and accountability should be fiercely implemented.

I don't know if capitalism is broken or not, to me the problem resides in the human nature itself, a person in a position of power WILL be tempted to use it to its own advantage so we have to find a way to make it impossible. No hidden agendas, no good stories, just the truth.

I know it's easy to say and maybe quite naive but the right decisions made at the right time can change everything within a generation.

[Chas.Alpha]

Every few years someone hoping to get elected brings up the idea of a flat tax, which seems popular with most US voters. I’m in favor of that approach. If you earn $25,000 per year, you pay 20%. If you make $250,000,000 per year, you pay 20%. The problem always seems to be that when said politician is elected, the guy making $250,000,000 slips him $1,000,000 and the tax law suddenly has a loophole that allows for a tax write offs for depreciation on a mega yacht, and the guy making $250,000,000 pays less that the poor bloke making $25,000.

I wouldn’t grouse at all if I knew the multi billionaire was paying the same percentage as I am.

[Malt]

Here in Canada the income tax is tiered, up to 50k is this, 100k is that and so on. The problem is that tax structure was good 25 years ago ish. 300k/year 25 years ago you were somebody! Now 300k with the tiered structure from 25 years ago you can barely fund a household of 4 with the price of stuff skyrocketing. We are also resource rich here but it’s bogged down in rules this/rules that. The government has become soft to accommodate every tree hugger organization that’s opposed to progress. 

[BrightonCorgi]

The quick fix is to prosecute and incarcerate corruption on a large scale. No more, hearings and tip toeing. No one in government is safe. When corrupt bureaucrats and politicians get swift and lengthy prison sentences, potentially "en masse", the tone will change. Incentivize rooting out corruption by rewarding whistle blowers and the like.  

One US example is the fraud in Minnesota. There should be 100's of people in prison right now, from the Governor to regular people. Only a couple have been sent to prison. Corruption pays.

Sweeping X% across the board budget reductions with annual increases to the deductions. Taxing more is not the solution. If the government took 100% of everyone's income, it would still not be enough.

End "NGO's", make schools and religious institutions pay some taxes. Get government out of the student loan business.  

[MrBirdman]

People frequently miss the rationale behind wealth taxes. It isn’t to raise revenue for government spending. As economists like Piketty explain well, the greatest benefit (and primary rationale) is to diminish - not eliminate - the concentration of wealth that financialized capitalist system gravitate towards. It’s happening across the world, there’s no question about that, and his solution is a global wealth tax (to avoid tax flight, although countries like the US have other means to combat that with its own citizens). 

The primary benefit isn’t more government revenue - that’s ancillary; it’s combating the excessive wealth concentration, which is bad for the broader economy and long-term political stability.

This is why the arguments about spending waste or government living within its means completely miss the point apropos a wealth tax. There are a ton of reforms to on those fronts that are required - but that’s a different question than the rationale for a wealth tax. 

(Also, while the welfare fraud in Minnesota was appalling in scale and should be vigorously rooted out, it still pales compared to the size, breadth, and duration of institutionalized corruption in areas like the US defense industry).

[griller]

8 hours ago, BrightonCorgi said:

The quick fix is to prosecute and incarcerate corruption on a large scale. No more, hearings and tip toeing. No one in government is safe. When corrupt bureaucrats and politicians get swift and lengthy prison sentences, potentially "en masse", the tone will change. Incentivize rooting out corruption by rewarding whistle blowers and the like.  

One US example is the fraud in Minnesota. There should be 100's of people in prison right now, from the Governor to regular people. Only a couple have been sent to prison. Corruption pays.

Sweeping X% across the board budget reductions with annual increases to the deductions. Taxing more is not the solution. If the government took 100% of everyone's income, it would still not be enough.

End "NGO's", make schools and religious institutions pay some taxes. Get government out of the student loan business.   

This...and I'll add TERM LIMITS for the government bastards. Every one of them can rot in you know where... 

[BrightonCorgi]

8 minutes ago, griller said:

This... and I'll add TERM LIMITS for the government bastards. Every one of them can rot in you know where... 

Amen!

For sure term limits on all elected positions with absolute minimal pay and benefits.  No lifetime benefits.  Working for the government should be for love of country, not to line your pockets.

[BrightonCorgi]

9 minutes ago, MrBirdman said:

People frequently miss the rationale behind wealth taxes. It isn’t to raise revenue for government spending. As economists like Piketty explain well, the greatest benefit (and primary rationale) is to diminish - not eliminate - the concentration of wealth that financialized capitalist system gravitate towards. It’s happening across the world, there’s no question about that, and his solution is a global wealth tax (to avoid tax flight, although countries like the US have other means to combat that with its own citizens). 

The primary benefit isn’t more government revenue - that’s ancillary; it’s combating the excessive wealth concentration which is bad for the broader economy and political stability. That’s the true long term benefit.

This is why the arguments about spending or living within government means completely miss the point. There are a ton of reforms to eliminate corruption that are required - but that’s a different question than the rationale for a wealth tax. 

(Also, while the welfare fraud in Minnesota was remarkable in scale and should be vigorously rooted out, it still pales compared to the size, breadth, and duration of institutionalized corruption in areas like the US defense industry).

Global Wealth Tax is New World Order.

[MrBirdman]

22 hours ago, griller said:

I'll add TERM LIMITS for the government bastards.

I think that, as Carlin said, unless you change the rules and incentives of the system you’ll just get a “new bunch of selfish, ignorant politicians” to replace the old. That said, I still support them. The idea that some people have been in Congress for my entire life is ludicrous.

The institution most in need of term limits is the Supreme Court - at least people in Congress can be voted out of office. I only bring up the US specifically because it’s the only major country with an entirely unaccountable branch of government with lifetime appointments. 

[MrBirdman]

12 minutes ago, BrightonCorgi said:

Global Wealth Tax is New World Order.

These guys?

Piketty admits it’s difficult to imagine it happening, his argument is for its economic benefits. As long as it doesn’t come with a global governance structure, I don’t see the risk of a worldwide power structure. They are trying to harmonize corporate income taxes and that hasn’t created a “NWO” issue. And corporations are far more powerful than individuals as a collective.

[rcarlson]

Estate/wealth tax = more creative estate planning, asset management, and accounting trickeration. It results in capital flight and stifles capital reinvestment. and produces no revenue of significance. There is no evil in capital concentration unless it somehow takes away from others, which it does not. 

Perceived income inequality is just a feature of capitalism. So long as standards of living increase (which they have in the U.S. to a remarkable degree), I can't fathom why wealth tax makes sense other than to placate the gauzy, superficial assertion that somehow someone else isn't "paying their fair share" (whatever that means). 

The whole concept is political, not economic.    

[MrBirdman]

7 minutes ago, rcarlson said:

The whole concept is political, not economic.    

I recommend reading Capital in the 21st Century. It makes a very compelling argument for the economic benefits. Also, excessive concentration of wealth has been shown to negatively affect living standards, economic growth, and political stability (and looking at western democracies, we see the rise of inequality and political instability right now; not proof of causation, but worth noting). We haven’t seen most of the harms yet because it’s only recently that the concentration has become historically severe, and it’s partly been ameliorated by government deficit spending. 

Some degree of inequality is actually necessary and beneficial - but at extremes it becomes harmful. 

[rcarlson]

It's unlikely I'll read the book. But if I do, it will likely be followed by Anti-Piketty: Capital for the 21st Century or another criticism of Piketty's methodology and conclusions. They are numerous.      

[MrBirdman]

5 hours ago, rcarlson said:

It's unlikely I'll read the book. But if I do, it will likely be followed by Anti-Piketty: Capital for the 21st Century or another criticism of Piketty's methodology and conclusions. They are numerous.      

I’d love to have a cigar on Discord to discuss if you do!

[rcarlson]

35 minutes ago, MrBirdman said:

I’d love to have a cigar on Discord to discuss if you do!

Deal.  

[REesq]

There is already a wealth tax in place, it’s called inheritance tax.  So between, income tax, a new “wealth” tax and the inheritance tax, the government would be taxing the same money three times.  If I could only figure out how to get paid for the same work three times I wouldn’t object.  Moreover, taking the longer view, no matter how great the fortune is, within a few generations it’s pretty much gone. The genius that created the wealth rarely moves down the generational food chain very far before entitlement and laziness kick in and deplete the fortune. 

[Montezüma]

I just wanna share the current outrage caused by the new bill passed by the Netherlands government, called the Box 3 or Actual Return Act or Unrealized Gains Tax. In muggle terms this translates to paying tax on unsold (unrealized) capital gains. The prospect of this tax is ground-breaking because what the world has been accustomed to as paying on actual earnings (i.e. paying with liquid assets that a citizen has earned) is no longer sufficient. The lengths that states have gone to fulfill their agenda is bizarre. Because this tax is paying with what you allegedly possess instead of what you have truly earned. If this becomes the norm, then it becomes common practice for other states to implement.

[BrightonCorgi]

14 minutes ago, Montezüma said:

I just wanna share the current outrage caused by the new bill passed by the Netherlands government, called the Box 3 or Actual Return Act or Unrealized Gains Tax. In muggle terms this translates to paying tax on unsold (unrealized) capital gains. The prospect of this tax is ground-breaking because what the world has been accustomed to as paying on actual earnings (i.e. paying with liquid assets that a citizen has earned) is no longer sufficient. The lengths that states have gone to fulfill their agenda is bizarre. Because this tax is paying with what you allegedly possess instead of what you have truly earned. If this becomes the norm, then it becomes common practice for other states to implement.

Several Senators in the US are hot to pass the same. 😿

[ha_banos]

Income is avoided by the wealthy, so there is no income tax in the normal sense. There are trusts involved. The duke of Westminster example comes up. 10bn£ inheritance and didn't pay 40% tax on it.

'While exempt from traditional inheritance tax upon death, these trusts are subject to a "periodic charge" (or "10-yearly charge") of up to 6% of the trust's value every decade, rather than the standard 40% on death.'

Then loans on the wealth portfolio. Tiny comparative loans. Income generated from wealth pays off loans. Wealth assets continue to increase in value. 

The system is fixed. 😊

[joeypots]

5 hours ago, rcarlson said:

It's unlikely I'll read the book.  But if I do, it will likely be followed by Anti-Piketty: Capital for the 21st Century or another criticism of Piketty's methodology and conclusions.  They are numerous.      

Tricky stuff no doubt. And I have little to add except that Elon is at least one of the richest on paper while some use Tesla stock as a prime example of an overvalued stock. The 12 month trailing PE of Tesla is around 367. What's a fair way to tax Musk personally to make him a more ordinary billionaire? 

[NYGuido]

13 hours ago, Montezüma said:

I just wanna share the current outrage caused by the new bill passed by the Netherlands government, called the Box 3 or Actual Return Act or Unrealized Gains Tax. In muggle terms this translates to paying tax on unsold (unrealized) capital gains. The prospect of this tax is ground-breaking because what the world has been accustomed to as paying on actual earnings (i.e. paying with liquid assets that a citizen has earned) is no longer sufficient. The lengths that states have gone to fulfill their agenda is bizarre. Because this tax is paying with what you allegedly possess instead of what you have truly earned. If this becomes the norm, then it becomes common practice for other states to implement.

The shortsightedness here is that what increases in value today, may decrease in value tomorrow, and I doubt there will be refunds based on the capital losses.