Or alternatively realise that there isn't a fixed amount of money and therefore if 'rich people' want to count their coins let them do so.
(i) it solves the capital accumulation problem
(ii) you can accommodate the hoarding by guaranteeing people a job at the living wage, which then injects the right amount of new money, both temporally and spatially, to offset the hoarding.
Tax has nothing to do with raising money. Tax is about reducing the capacity of the private sector to hire people so the public sector can hire them instead. If there is unemployment then the public sector hasn't hired enough people or taxes are too high/ineffective.
Why not simply accommodate the savings rather than constantly trying to confiscate them? A dynamic monetary system can do that.
I don't understand this obsession on the left with behaving like Robin Hood. Wealth taxes will not alter the power position of the rich. All it does is get up the nose of the rich and require us to pay those people who want to play Robin Hood.
QE labour hours however, and the power of the wealthy to deny others an income by not spending their haul is removed. They can count their coin and the poor still get to work and eat.
You just need to tweak the system to make accumulation a bit harder. Currently money attracts more money. It's not rocket science to implement a plan that means that any entity with lots of money needs to work a little harder to retain it and grow.
Rich people always say they are smarter and deserve the money. Well that's fine. They'll continue being smarter and continue being rich but it'll just be a bit harder for them. Seems fair to me.
P.S. Yes I think a small wealth tax is a good start. Little tweaks
in my opinion, the way to "fix" this is to start taxing ALL income and capital gains of over $150,000 at 20% scaling up to 35% for when somebody is making more than a half million dollars per annum.
This would be more trouble than its worth and confuses real wealth with financial wealth. Modern fiat money is essentially a digital currency controlled by the banking system and congress. Its like bitcoin with Congress and the banks authoring the algorithm. It follows that quantity of money is never a problem in a fiat money system, its the algorithm for its creation/allocation that is the problem.
Economics is about maximizing consumption and the goal should be to give all people the opportunity to consume what they need. Real wealth = the goods and services that are produced and consumed in the economy and ultra rich people do not consume very much of it. Yeah, they hoard financial assets -thereby hurting the economy- which tends to reduce circulation of money which leads to reduction of income for everyone else. Yes, this income leak can be solved by taxation and re-distribution. But this is politically painful. Maybe it would be better to give on to Caesar what is Caesear's and let the rich keep their hordes because money sitting in a bank doing nothing is irrelevant. Would be better to focus on distributing wealth to the middle and lower classes on a much larger scale through government spending and reduction of taxes.
Proposals
1) Payroll taxes to be paid by Fed for workers.
2) Income or Job Guarantee program with living wage and full benefits.
3) Massive federal infrastructure spending on a WWII like scale. Triple down on the deficit.
4) Regulate, Regulate , Regulate. Get money out of politics.
5) Online/Mobile voting system mandate.
6) De-financialize the economy: Return banking system to pre 1980's model where banks make loans and hold them. Strict controls on financial leverage. No borrowing using financial assets as collateral.
7) Tax rentier income higher than earned income.
I’ve been saying for years that we should reduce taxes on work and increase taxes on assets and consumption. At the current level of taxation, accumulating wealth through work is out of the grasp of 95% of the population (at least in the UK, where they’d earn less than 90K).
Why tax income? Wealth should be taxed. The problem is hoarding, not doing valuable work.
For example, owning land that is empty or an empty building for years just so it appreciates deprives the community. Tax the shit out of it so it forces the owner to use it productively or sell it so someone else can figure out how to use it productively.
I get that, but it seems quite cumbersome and complicated to me. There's got to be a simpler solution that won't involve borrowing. That's where a simple change on income tax like I described I feel might be nicer.
The end result is the wealthier do get taxed more, but the taxing still only happens at liquidation.
Whereas currently this isn't the case. Since a wealthy person can cash out 10 million a year, be taxed on that to the same extent as someone else who made 10 million, yet the next year the wealthy person total wealth could have gone up, making it they can cash out 10 million year over year forever and still grow richer, all because they always get taxed the same as someone who is less wealthy but of a similar income.
Adjusting taxation to benefit people with less wealth while using public money to help people is too difficult to actually accomplish because people with more wealth use that wealth to game the system in ways that helps them preserve (and grow) their wealth.
A wealth tax would be nice, instead of income or expenses taxation. Tax those who hoard. If a billionaire is spending $800m on things, he's doing a lot of good for the economy, probably more than taxing him $10m would.
I personally think that after the first 1.5 million that they tax rate should be 100%. That's still an incredibly large amount of money. After that we need the resources to tackle problems and we can't if people hoard them.
I know that it sounds simple, and lots of people on this site will disagree, but I'm having trouble justifying this kind of extreme wealth to myself anymore.
There are so many people in poverty and ignorance. What's it for any way if people are starving and illiterate?
I'm really not looking forward to some of the responses to this comment, but I find myself thinking more and more about the morality of letting people accumulate massive sums when the resources that wealth could muster go unused by the people that need them most.
I don't know. I'm genuinely interested in hearing what other people here have to say if you can keep from being condescending or mean. Please be nice.
The problem is a wealth tax is almost impossible to implement. People will form crappy charities or put the money in their kids' names or move it to the Caribbean or some other gymnastics that will make worse use of the money overall.
1. I suggested taxing consumption and assets instead of income. Income taxes would fall to zero to be replaced with taxes on consumption and assets. You might have to pay more tax on your consumption and assets, but you would have more income to pay for it.
2. Consumption taxes like VAT are hard to avoid given the way they compound through the production chain. They really are very efficient taxes and any regressive nature can be mitigated with other transfer payments.
3. A wealth tax applied directly to the asset (the asset owes the tax, not the owner of the asset) would also be very efficient and hard to avoid. It would encourage the productive use of the asset rather than hoarding.
4. All taxation is stripping people of property they already own - income tax is stripping you of your labor after all. That is what taxation is.
5. Taxing wealth would not stop the poor from becoming wealthy. If would actually help the poor to become wealthier as the only thing they have of value (their labor) would stop being taxed.
I do agree with you that a change from an income based taxation system to a consumption/asset based system would be unfair to those that have paid income taxes all their lives and saved and are now taxed on their savings. The solution would be to have a long transition period (25 to 30 years) where each year the income tax rate fell and the consumption/asset tax rose.
All of this is rather academic anyway since the rich and powerful will never allow an asset tax to be implemented - the last thing they want is to start paying tax. As Leona Helmsley famously said "We don't pay taxes. Only the little people pay taxes."
To summarize the thread so far, we need to create more money in circulation in order allow for more economy activity, and penalize preserving wealth in the form of capital.
Allegedly, "if you want to preserve wealth - it's easy just buy wealth (stocks, real estate, land)."
In other words, this is intentional to push people towards preserving wealth in the form of assets. But this creates issues where assets become over-valued - and some assets (real estate and land) are necessary to survive.
Your proposal is to tax the ownership of assets (i.e. the preservation of wealth) in order to ... push people back towards capital (i.e. for the preservation of wealth)?
The best way to reverse the capital hoarding is to deeply understand the way the policy making system works, not to debate the merits of different policies. Folks who believe in a wealth tax also don't believe in putting their noses to the grindstone for decades to engage in the high octane chess game of bureaucratic power politics. So it'll never happen.
(i) it solves the capital accumulation problem (ii) you can accommodate the hoarding by guaranteeing people a job at the living wage, which then injects the right amount of new money, both temporally and spatially, to offset the hoarding.
Tax has nothing to do with raising money. Tax is about reducing the capacity of the private sector to hire people so the public sector can hire them instead. If there is unemployment then the public sector hasn't hired enough people or taxes are too high/ineffective.
It's never about money. It's always about stuff.
Here's how it works[1]
[1]: https://new-wayland.com/blog/how-the-job-guarantee-fixes-mai...
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