That's actually the point of the wealth tax. The reason the pay a disproportionate amount is because the own a disproportionate amount. The current system is also a redistribution of wealth, just from the bottom to the top. That's what a wealth tax is supposed to change.
Regarding the argument about companies, I'm sure the French king also employed a lot of people, we still got right of the system of absolutism.
I'm guessing the vast majority of "wealth" is in assets/stocks. That isn't money just sitting around. The value is only realized when those are selled off. They also would owe capital gains tax. So now they gets taxed twice?
> The current system is also a redistribution of wealth, just from the bottom to the top.
I think that capitalism/free markets has been the biggest driver in bringing people out of poverty.
> That's what a wealth tax is supposed to change.
This is also hugely immoral. Property is a fundamental human right. There is no "right" in having as much money as someone else. In the US at least, there is supposed to be equal protection of your rights. Taking money from one person and giving to another is immoral. Besides, wealthy people are also people that donate enormous amounts of money. Let them figure out how they want to give it away.
> Regarding the argument about companies, I'm sure the French king also employed a lot of people, we still got right of the system of absolutism.
You will have to provide me some more evidence on how these are connected.
So if I start my own company I have to give away 10% of that company every year? Because I own shares in my company. And those shares have value. Which contribute to my wealth. That seems terrible!
I don't see how a wealth tax is a good idea at all. If you could recommend a good article that argues why it's good and how it would work I'd love to read it.
To me the sad thing about the wealth tax is that it distracts attention from the value-added tax, land-value tax and carbon tax, which, while not as progressive as the wealth tax, are much better as potential revenue sources and can easily be paired with better welfare programs (e.g. universal tax dividend née "basic income") to be similarly redistributionary in practice. The wealth tax satisfies a combative urge in our politics to stick it to the rich, but if there's one thing consistent about wealth taxes, it's that the actual receipts are not so high. France's much-ballyhooed wealth tax brought in a measly ~5B euros (about 7B USD) per annum:
France's annual government revenue is easily above 100B euro, so the wealth tax -- which, as 'thomasdullien appears to have argued, was too high -- brought in around 2% of government revenue.
Maybe the antisocial effects of billionaires nonetheless justify a wealth tax -- maybe their ability to buy all of the best land and city governments justifies a tax that serves mostly to prevent their untoward influence on society -- but when considered as a way for the government to make money, I have yet to find an example of a wealth tax that works.
Who said anything about impoverishing anyone? What does "impoverish" mean, exactly, to you?
In France, the wealth tax is 0% under €800k, increasing to a maximum of 1.8% (once the person gets to ~€17 million). How could this lead to impoverishment when even relatively conservative asset management averages returns of >5%? Even in this case the party's wealth is still increasing (especially since the proposal is to offset the wealth tax by eliminating all capital gains taxes, which are already extremely difficult to calculate).
And it's hardly an abuse: property taxes (a kind of wealth tax) are already levied, and while many complain, few claim it is government overreach. Government policy that favors a small and already powerful minority would seem to be a much greater abuse.
The bigger question is: why do most governments tax people for creating value, instead of taxing people for failing to?
France already has a wealth tax and it is famous for being completely ineffective. Very wealthy people just move away with their wealth to richer countries.
Yeah, I'm not in favor of a wealth tax, precisely because of the evasion problems (which France is experiencing). I think a better and simpler solution is to not have abnormally low capital gains rates. And did you know that someone who is wealthy, who owns stock worth millions of dollars, pays $0 federal income tax until they reach over ~$80K in qualified dividend income per year? It's absurd. Income should be taxed the same regardless of source. Maybe give a slight tax break of ~5% for long-term investing of, say, 5-10 years or more, but getting a ~20% tax break for investments only a year old is absurd.
Of course, the most effective wealth tax of all time was implemented centuries ago and is continuing to perform amazingly. I'm speaking of the elimination of primogeniture, which does an excellent job of breaking up multigenerational wealth (and thus largely prohibiting the establishment of a permanent nobility class).
Taxing wealth acts as an incentive to spread the shares around the company instead of hoarding them. Don't want your wealth taxed? Let the workers enjoy the fruits of their labor.
The same goes for ~90% brackets. Don't want your salary to be taxed at such a high rate? Put that money into R&D or worker's paychecks.
The person you're responding to was suggesting a wealth tax though, not an income tax. With a wealth tax you'd pay some percentage of your wealth every year, including on your properties. It's not a crazy idea; either. France, along with many others, currently have a wealth tax: https://en.wikipedia.org/wiki/Solidarity_tax_on_wealth
Wealth tax is a good idea that’s very hard to implement effectively. Many countries have tried it only to give up on it (Germany, Sweden). France has a comprehensive wealth tax but it raises less than 2% of total tax reciepts, suggesting it’s not doing much. It’s very difficult to prevent the wealthy from finding ways to hide wealth.
The entire point of the article is about taxing the wealth of extremely rich people rather than income because the wealth is structured to not generate taxable income.
I think there are two considerations here: (1) fairness, (2) good economic policy.
It's certainly not fair to have such a large proportion of power concentrated in such a minuscule number of people.
It's hard to see how it's a good economic policy either. We want there to be capital available to be invested in further economic activities (I think we do, anyway; there are people who would debate that). But we don't want -- and certainly don't need -- so much of it in so few hands. A wealth tax is a way to drain some of that away.
I believe this is part of the premise on how Wealth Tax is supposed to work. While I'm not a big fan of Wealth Tax, I do think this is an idea that should/can be used across the tax system.
This has been downvoted, can someone add a counter-argument for this? I.e. why should someone with higher wealth be able to pay less tax (in absolute and relative figures) than someone with lower wealth?
The problems here are fairness, but also time. Wealth tax gathers funds from past and future actions, income tax only from future actions.
If you believe laws were totally fair in the past, then a wealth tax should be unfair now. Is that your stance? Has taxation been fair?
My stance is that the notion of private property is ingrained, we went to civil war due to private property of slaves, the french revolution was fomented due to financial problems due to untaxed private holdings of the church and wealthy people. Does having private property from the past mean it's ours and no one can touch it?
History has shown that oligarchies and massive wealth disparities lead to negative societal outcomes. IMO, Taxes should generate revenue for public works and lower negative societal outcomes due to negative externalities, therefore wealth tax is fine with me in principle.
>In 2004, a study by the Institut de l'enterprise investigated why several European countries were eliminating wealth taxes and made the following observations: 1. Wealth taxes contributed to capital drain, promoting the flight of capital as well as discouraging investors from coming in. 2. Wealth taxes had high management cost and relatively low returns. 3. Wealth taxes distorted resource allocation, particularly involving certain exemptions and unequal valuation of assets. In its summary, the institute found that the "wealth taxes were not as equitable as they appeared"
Regarding the argument about companies, I'm sure the French king also employed a lot of people, we still got right of the system of absolutism.
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