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  #101  
Old 10-24-2019, 02:59 PM
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Originally Posted by Really Not All That Bright View Post
The point of the estate tax is that generational wealth transfers are anti-merit and if we are going to fund a government, it should be by taxing people who haven't done anything to earn their money.
The point of the estate tax is to tax deep pockets, just like any other tax, and that is what Warren wants to do (see subject).
  #102  
Old 10-24-2019, 03:34 PM
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Bone, there's no chance that any policy any politician is proposing could conceivably lead to triple or quadruple taxation, because 3 or 4 times is far too low a number. By my back-of-the-envelope estimate, most money ends up getting taxed about 50 times. The only way to get the number down to 3 or 4 is if you either stop all transactions after a dollar has changed hands 3 or 4 times, or grow the money supply so quickly that after 3 or 4 transactions, the money you had is dwarfed by new money. Either one would be absolutely disastrous for the economy.
Yes money is taxed repeatedly as it is used in various transactions, but that's not what I've been talking about. I'm talking about money that is taxed multiple times without any underlying transaction. That doesn't really happen right now.
  #103  
Old 10-24-2019, 03:40 PM
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Yes money is taxed repeatedly as it is used in various transactions, but that's not what I've been talking about. I'm talking about money that is taxed multiple times without any underlying transaction. That doesn't really happen right now.
If several taxes are applied on one transaction, does that violate this principle? Why or why not?
  #104  
Old 10-24-2019, 03:51 PM
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If several taxes are applied on one transaction, does that violate this principle? Why or why not?
I'd need an example, but I'm thinking like you buy something at the store, and there is a city levied sales tax, and a state levied sales tax. That would fit, but because of different jurisdictions it wouldn't be double taxation in the sense I'm thinking. To fit, it would be more like you earn $100 and the feds tax you 10% when you get it so you are left with $90 and you put it under your bed. Then the next month, they tax you another 10% and you owe an additional $9 without engaging in any other activity. It'd be like putting a decay rate on money, or an interest cost for the privilege of holding money.

Ultimately it's a value judgment whether you are okay with double taxation. You seem to be fine with it. I'd be opposed. But right now, it doesn't happen so if we move to a scenario where it does happen, that'd be a change.
  #105  
Old 10-24-2019, 04:21 PM
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I'd need an example, but I'm thinking like you buy something at the store, and there is a city levied sales tax, and a state levied sales tax. That would fit, but because of different jurisdictions it wouldn't be double taxation in the sense I'm thinking. To fit, it would be more like you earn $100 and the feds tax you 10% when you get it so you are left with $90 and you put it under your bed.
The example I'm thinking of is that when I get a paycheck, it is subject to Federal income tax, two Federal payroll taxes, and a local income tax. One transaction, four taxes, three of which are Federal.

But if you're talking about money at rest, is it that you object to taxation when there hasn't been a transaction? Like, annual property taxes on things you own (and are not being purchased)?

Last edited by Ravenman; 10-24-2019 at 04:21 PM.
  #106  
Old 10-24-2019, 07:38 PM
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Yes money is taxed repeatedly as it is used in various transactions, but that's not what I've been talking about. I'm talking about money that is taxed multiple times without any underlying transaction. That doesn't really happen right now.
It does in one obvious place: real property.

There's already a wealth tax for everyone in the lower 95% because the majority of their wealth (for those of them who have any wealth) is in their house. It's only the really rich who don't pay a percentage of their wealth in taxes.

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  #107  
Old 10-24-2019, 07:41 PM
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I guess it's another thread but I oppose estate taxes, as well as gift taxes (even though I am not affected by them). I think that a transfer of assets that does not create economic value should not be taxed.
Currently when you inherit property you get to change the cost basis to the value at teh time you inherit. So the "income" of the capital gain is not taxed. If you eliminated the estate tax completely, you should certainly change this so the the capital gains would not escape taxation.
  #108  
Old 10-24-2019, 07:43 PM
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The example I'm thinking of is that when I get a paycheck, it is subject to Federal income tax, two Federal payroll taxes, and a local income tax. One transaction, four taxes, three of which are Federal.

But if you're talking about money at rest, is it that you object to taxation when there hasn't been a transaction? Like, annual property taxes on things you own (and are not being purchased)?
You can get OASDI, and a bunch of other federal taxes all levied but they are essentially different taxes applying to the same transaction. So OASDI may be 7.65%, but 6.2 is one component and the 1.45 is another, but those aren't going to the same place so I don't consider them the same tax. That multiple things may aggregate together doesn't necessarily mean double taxation.

Yes, I object to taxation when there isn't a transaction. Real property taxes are slightly different. First it's state, not fed so the taxing power is different. But second, my thinking on this is that you own the land but receive certain services in connection with that ownership and as a result the annual tax levy is a more efficient way of collecting than it would be to do it piecemeal.

But on a federal level, there just isn't a thing where money at rest is taxed.
  #109  
Old 10-24-2019, 08:07 PM
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I don't love the idea of a wealth tax but I think a tax focused on people with over $50M really is a different kettle of fish. It's not about hating the rich, it's just that is a huge chunk of change to be sitting idle. Economists often worry about people saving too much, the 1%ers are more an issue on that front than the rest of the country combined.

Last edited by CarnalK; 10-24-2019 at 08:07 PM.
  #110  
Old 10-24-2019, 08:10 PM
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It's not like 1%ers are just sitting on piles of cash. Their money (most of it at least) is invested in various ways, working in the economy.

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  #111  
Old 10-24-2019, 08:14 PM
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It's not like 1%ers are just sitting on piles of cash. Their money (most of it at least) is invested in various ways, working in the economy.
Some of it is, some of it isn't. If you have a $5M cottage in Martha's Vineyard, that you intend to leave to your grandchildren, that's not invested in the economy
  #112  
Old 10-24-2019, 09:02 PM
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A consumer tax gives the individual more flexibility in when and how they are taxed as well as taxing more proportionally based on income as billionaires are taxed on their yachts, ferraris and beach homes while the average Joe is taxed on bread and milk.
How is this more proportional based on income? Do you think that billionaires spend more, proportionally, on yachts, ferraris, and beach homes than average Joes spend on bread and milk?
  #113  
Old 10-25-2019, 12:56 AM
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It's not like 1%ers are just sitting on piles of cash. Their money (most of it at least) is invested in various ways, working in the economy.
This presupposes their money in invested in the national economy. Mostly it's not. I guess you could make a sort of Adamsmithian argument that investing in Ukrainian or Chinese businesses helps America akshully because it helps Chinese businesses churn out the best goods and services that China can make in some sectors which they can in turn exchange for the best goods and services America can make in other sectors and everybody wins, hurray. But to the extent it is true it's a very long term, diffuse, almost abstract social benefit while taxing their golden cocks off provides a more immediate and tangible redistributive one.

Plus I fail to see how a Rembrandt stashed in a bank vault works in the economy
  #114  
Old 10-25-2019, 12:43 PM
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I'm all for taxing the rich, but.... I just can't see how this would be an efficient thing to implement.

I say this because I have to do an annual financial disclosure, and even though I'm of MUCH more modest means than billionaires, the process of counting up my assets is very difficult and time-consuming for me to do, and I would think it would be a total nightmare for anyone trying to double-check that I'm not cheating. How anyone could look at a billionaire's financial assets and have any confidence at all that there isn't massive cheating strikes me as extremely implausible.
We do it with the estate tax all the time.

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Why not close tax loopholes, raise rates, and hire more IRS auditors that can go through income tax returns for the richest? Warren isn't stupid, so I just have to think I'm missing something as to why she isn't proposing the most direct means of taxing the rich.
They've been trying to address the tax gap for decades. Noone wants to fund the IRS.
  #115  
Old 10-25-2019, 12:47 PM
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I don't think this is the right way to think about it. Typically what is taxed isn't the money itself, but a transaction. With income tax, the transaction is you exchanging services for payment - there is a tax to that transaction. With sales tax, the transaction is exchanging money for goods - there is a tax to that transaction. This isn't double taxation because the money isn't being taxed, rather the underlying transactions are being taxed. This is not so with a wealth tax.

With a wealth tax, there is no actual underlying transaction being taxed. There's simply a tax for existing. I'm not familiar with anything else that works that way.
You ever pay real estate taxes?
  #116  
Old 10-25-2019, 12:52 PM
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I wonder if a national property tax could serve similar purposes -- exempt the first $1 million (or so) of one's primary residence, and all other real estate property gets dinged at .5% per year, or something like that.

EDIT: Might not be constitutional; I'm not sure. Maybe could be tweaked to get by the direct-tax limitations (i.e. each state gets a portion under the above principle, or something like that).

Last edited by iiandyiiii; 10-25-2019 at 12:55 PM.
  #117  
Old 10-25-2019, 01:36 PM
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We do it with the estate tax all the time.
Maximum once per life, at not insubstantial cost. And Warren says we need to change the procedure but details are scant. Hence the thread.
  #118  
Old 10-25-2019, 01:38 PM
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This presupposes their money in invested in the national economy. Mostly it's not.
This isn't true.
  #119  
Old 10-25-2019, 02:18 PM
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Even before I heard of Warren's plan I have converted to a wealth tax supporter, leaving aside the scant chance that it could be implemented. We're no longer in a long-term debt crisis but a medium one, so we need to take semi-drastic measures to confront it.

I think that if we implement a wealth tax we can let the payers use it to offset estate taxes - the treasury would still come out ahead due to inflation and any payments beyond the estate tax, and we need the money now and not 20-30 years down the road. In the long term we can eliminate the estate tax because the only people who should be paying it are ones who should be paying the wealth tax as well.

We also need to reduce the ability to hide the money in trusts. Possibly a greatly extended gift tax exemption but have it apply to all recipients, so you would only be able to set aside a low six figure amount every year to a trust or your heirs, but not both. This would further enable the merely rich to plan for a managed transfer of wealth. Hit everything beyond this exemption hard. (Charitable gifts would be okay as long as there was no quid pro quo and no control between the giver and the charity.)

The "fleeing megawealthy" problem is the easiest to solve, much easier than the problem of valuation or constitutionality. Just don't let anyone back into the country if they haven't paid their tax, even if they renounce their citizenship. Not a lot of people are willing to forego America for the sake of a few more millions in their billionaire's bank account. I'm not sure that I'd go so far as to prevent them from leaving like some have proposed.
  #120  
Old 10-25-2019, 02:24 PM
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You ever pay real estate taxes?
Reading the thread before you multipost tends to resolve a lot of questions. Whatever floats your boat.
  #121  
Old 10-25-2019, 03:01 PM
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By the way, 10% taxes on boats.
  #122  
Old 10-25-2019, 03:03 PM
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Won't someone think of the poor, hard-working fishermen?
  #123  
Old 10-25-2019, 03:27 PM
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This isn't true.
How much of the mega wealthy's money is invested in the national economy then?

Adjacent to that point, I did find this break down of where people keep their money:
CNBC: Where the super rich keep their money

But it doesn't discuss how much is foreign holdings.
  #124  
Old 10-25-2019, 06:38 PM
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It's not like 1%ers are just sitting on piles of cash. Their money (most of it at least) is invested in various ways, working in the economy.
Sure. Just like my house isn't sitting idle. It's doing societally useful work by providing a home for my family. But I still get taxed on its value.

Again: there already is a wealth tax. But it primarily apples to the upper middle class (say 70th percentile to 95th), and is phased out above that.

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  #125  
Old 10-25-2019, 06:43 PM
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It's been pointed out a half dozen times that the legality of a federal wealth tax is different than a local property tax. Why is that not sinking in?
  #126  
Old 10-25-2019, 08:35 PM
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It's been pointed out a half dozen times that the legality of a federal wealth tax is different than a local property tax. Why is that not sinking in?
To put a bit of a finer point on this in case it got lost in the discussion, there is no real question that a tax on Real Property (land) would be a direct tax and subject to apportionment. In fact, that is at least one part of Hylton that remains good law. And it seemed self-evident to that Court and not a point of any real contention (and at least two of the participating Justices were signers of the Constitution). So while an unapportioned Federal tax on Personal Property would presumably necessitate overturning Pollock, a Federal unapportioned Property Tax would necessitate overturning Hylton as well and basically discarding our entire jurisprudential history in that area.
  #127  
Old 10-25-2019, 09:30 PM
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It's been pointed out a half dozen times that the legality of a federal wealth tax is different than a local property tax. Why is that not sinking in?
Because I'm not talking about legality. I'm talking about the moral argument. People who are saying we shouldn't tax wealth "at rest" aren't making a legal argument.

I do not remotely dispute that a federal wealth tax is not Constitutional (In fact, I pointed that out in my first post in this thread )
  #128  
Old 10-25-2019, 09:39 PM
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I think the "unconstitutional" argument has been extremely poorly cited in this thread, as far as I can see. We've got the American Bar Association published policy paper arguing that it is Constitutional by the Chair in Corporate and Business Law at the University of Texas and a few Dopers saying it obviously isn't. Guess which side I'm currently leaning?

Last edited by CarnalK; 10-25-2019 at 09:40 PM.
  #129  
Old 10-25-2019, 09:39 PM
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It's been pointed out a half dozen times that the legality of a federal wealth tax is different than a local property tax. Why is that not sinking in?
Because there are two discussions, one on methods of determining wealth, and the philosophy of taxing wealth, for which property tax is a good analogy. The other discussion is about the legality of a wealth tax.
  #130  
Old 10-25-2019, 10:40 PM
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I think the "unconstitutional" argument has been extremely poorly cited in this thread, as far as I can see. We've got the American Bar Association published policy paper arguing that it is Constitutional by the Chair in Corporate and Business Law at the University of Texas and a few Dopers saying it obviously isn't. Guess which side I'm currently leaning?
I... honestly don't know. This post suggests that you think it is constitutional, but you just reprimanded me for failing to realize that it's not? This might be a time to dispense with nuance and just state your position clearly.

FWIW, I think it's unconstitutional because as a direct tax, it should be apportioned among the states. But I'm not a lawyer, so I could easily be wrong.
  #131  
Old 10-25-2019, 11:52 PM
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I think the "unconstitutional" argument has been extremely poorly cited in this thread, as far as I can see. We've got the American Bar Association published policy paper arguing that it is Constitutional by the Chair in Corporate and Business Law at the University of Texas and a few Dopers saying it obviously isn't. Guess which side I'm currently leaning?
Did you actually read the cited article or any of the cases mentioned? Because providing cites is kind of pointless if the person asking won't read or understand them. So the ABA posted a legal scholar's opinion piece. So what? That is not an endorsement by the ABA of the author's views and it is the opinion of one of the hundreds of Constitutional scholars in this country.

The fact is that among the hundreds and hundreds of law journal articles published each year Prof. Johnson's was one of the few, if not only, in recent history addressing this topic at all, let alone taking this particular position. Presumably this is because the legal issues have been settled law for over 120 years and his views are also presumably in the minority. The Professor's argument has only gained notoriety recently because of the current discussions of implementing such a tax and because it's just about the only scholarly work proponents can find which echoes their position. It also displays the ignorance and possibly subtle bias on the parts of journalists and pundits when they present such an opinion as if it's unanimous or even widely-held among legal scholars and without any contrary perspectives.

But even Prof. Johnson in his original law journal article,* which this opinion piece is a truncated version of, admits that the current Court disagrees with his conclusion and instead has affirmed its long-standing holding. In Sebelius, in finding the individual mandate was a tax (though not a direct tax), the Court noted:

That narrow view of what a direct tax might be per-sisted for a century [the Court here is referring to Hylton, discussed in previous paragraph]. In 1880, for example, we explained that “direct taxes, within the meaning of the Constitution, are only capitation taxes, as expressed in that instrument, and taxes on real estate.” Springer, supra, at 602. In 1895, we expanded our interpretation to include taxes on personal property and income from personal property, in the course of striking down aspects of the federal income tax. Pollock v. Farmers’ Loan & Trust Co., 158 U. S. 601, 618 (1895). That result was overturned by the Sixteenth Amendment, although we continued to consider taxes on personal property to be direct taxes. See Eisner v. Macomber, 252 U. S. 189, 218–219 (1920).

And:

The payment is also plainly not a tax on the ownership of land or personal property. The shared responsibility payment is thus not a direct tax that must be apportioned among the several States. (Can't find a paginated version online for proper cite. It's in part III C.)

So what does it matter what a single (or however many) legal scholar believes if a majority of SCOTUS disagrees? And there is no guarantee that said majority would be confined to the so-called Conservative wing of the Court.

*https://www.google.com/url?sa=t&sour...=1572059367540
  #132  
Old 10-26-2019, 10:12 AM
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How much of the mega wealthy's money is invested in the national economy then?
If you think it's relevant to answering the OP's questions (I don't), let us know if you find out.
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Old 10-26-2019, 05:02 PM
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If you think it's relevant to answering the OP's questions (I don't), let us know if you find out.
Oh, you just seemed so confident in your "this isn't true", I kinda assumed you knew what you were talking about. Mea culpa.
  #134  
Old 10-26-2019, 05:35 PM
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Warren proposes a 2% tax on those with a net worth over $50 million.

(A) How ya gonna value assets? Tom Brady may be asking $32 million for his house, but is it really worth it?

(B) How does this tax get past the U.S. Constitution. The sixteenth amendment limits taxing power to "incomes, from whatever source derived", which can loosely be defined as any asset transfer. But assets held are not income, so where is the authority to tax?
Basically its a lead balloon thats not going to fly and should be looked at as a position paper and not an actual this is going to happen if she gets elected. Legality should not be as issue, as congress is the body that makes it legal regardless of what ever anyone else thinks.
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Old 10-26-2019, 06:09 PM
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Oh, you just seemed so confident in your "this isn't true", I kinda assumed you knew what you were talking about.
I do. I'm also trying to stay on-topic. If you're curious and have trouble with Google, I might respond to a GQ thread.
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Old 10-26-2019, 06:54 PM
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Basically its a lead balloon thats not going to fly and should be looked at as a position paper and not an actual this is going to happen if she gets elected. Legality should not be as issue, as congress is the body that makes it legal regardless of what ever anyone else thinks.
Congress has no power to override the Supreme Court declaring a law unconstitutional. It is the Court which ultimately decides what is legal (regardless of whatever anyone else thinks) in the US system and not Congress.
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Old 10-26-2019, 07:30 PM
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Congress has no power to override the Supreme Court declaring a law unconstitutional. It is the Court which ultimately decides what is legal (regardless of whatever anyone else thinks) in the US system and not Congress.
Congress can always amend the constitution, or pass new legislation that addresses the court's objection.
  #138  
Old 10-26-2019, 07:36 PM
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Congress can always amend the constitution, or pass new legislation that addresses the court's objection.
Occasionally SCOTUS will explain the precise element that makes the legislation problematic in such a way that Congress can rework the new legislation enough to get the desired result without including that element, but Congress cannot just amend the constitution - they will need a supermajority of state legislatures to agree.
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Old 10-26-2019, 07:42 PM
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Occasionally SCOTUS will explain the precise element that makes the legislation problematic in such a way that Congress can rework the new legislation enough to get the desired result without including that element, but Congress cannot just amend the constitution - they will need a supermajority of state legislatures to agree.
Thank you. Well stated.
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Old 10-26-2019, 08:14 PM
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I do. I'm also trying to stay on-topic. If you're curious and have trouble with Google, I might respond to a GQ thread.
Ok, buddy. I'll get right on that.
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Old 10-26-2019, 08:15 PM
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Thank you. Well stated.
Thank you. Probably the most significant recent example in the U.S. is Furman v. Georgia (1972) where SCOTUS essentially (and only barely, with a 5-4 vote) decided the death penalty as it then existed violated the 8th Amendment. Very rapidly, state legislatures who wanted to keep using the death penalty rewrote their legal standards for doing so to conform to the SCOTUS ruling. Anyone who was on death row in 1972, though, got their sentences automatically commuted to life imprisonment. Some are still alive in prison even now. A few have been paroled.

I though this had been the case for Charles Manson and Sirhan Sirhan, but they were spared when California's Supreme Court ruled in People v. Anderson (1972) that the state's death penalty violated the state's constitution, a few months before SCOTUS decided Furman and made it nationwide.

The death penalty was effectively gone from the U.S. until SCOTUS ruled in Gregg v. Georgia, Proffitt v. Florida, Jurek v. Texas, Woodson v. North Carolina, and Roberts v. Louisiana (1976) that these states had managed to find legal formulations for the death penalty that did not run afoul of the 8th Amendment and convict season was open again.
  #142  
Old 10-27-2019, 07:42 PM
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So, are stock holdings considered wealth? Many of the richest people have the bulk of their money in stocks.

Let's take Elon Musk. He invested every nickel he had in SpaceX, to the point where he was living in a small apartment. And after the last Falcon 1 explosion, he was down to his last money and if another one had exploded it would have sunk the company. Musk holds something like 51-60% of SpaceX stock.

So let's look at the way a wealth tax would have affected him. First, when he sold PayPal he got 165 million. That was his seed capital for SpaceX and Tesla. The government takes $3.3 million of that every year while he tries to find another place to use it.

So then he comes up with SpaceX, and puts all his money into it. Let's say that investment doesn't pay off for ten years. So he would have to cough up about 20% of that money to the government before he ever makes a profit. The same is true for every investor in big projects: Their wealth doesn't vanish just because it's invested, so they have to figure that they will lose a good chunk of their money in taxes while the business is building towards profitability. And then there's risk: Most new ventures fail. I don't suppose the government is going to give their tax money back if the venture fails? I invest a billion dollars, my company is valued at a billion dollars for a few years, then goes belly up before it ever makes a profit. So now I don't just lose my billion, but I lose another $200 million in wealth taxes over the period my company was struggling to succeed.

Except it gets much worse, because long before these companies generate a profit they can be valued much higher.

SpaceX is currently valued at around $30 billion. 1% of SpaceX stock is therefore worth maybe 300 million.

Musk is worth about $21 billion today. I'm guessing that less than few hundred million are in liquid assets - most of it is locked up in the stock of his companies. But according to Elizabeth Warren, Musk would have to cough up $400 million per year for the privilege of holding that stock. So the founder of SpaceX would have to liquidate 1.5% of his company every year, and would therefore lose control of it in a few years.

Going back to our poor billionaire - imagine if his company, like other silicon valley companies, gained a huge valuation then collapsed before ever turning a profit.

Imagine you start a company by selling your house. You put $500,000 in. Then your company gets some venture capital, some viral marketing, and suddenly you are Pets.com. Your company is worth $10 billion, and you hold half the stocks. Suddenly you are on the hook for $100 million per year in taxes, even though you are living in an apartment, sold your house, and your company is still not turning a profit. Then five years later yiur company crashes to zero. Now you didn't just lose your investment - you lost $500 million dollars in wealth tax for 'wealth' you never got to see.

But it gets worse, because venture capitalists also have to pay the tax. This would heavily damage the ability to raise venture capital, and it would also bias investment heavily towards short-term returns. If I invest a billion dollars in a new energy source fhat won't be online for 10 years and won't turn a profit for twenty years, I still have the 'wealth', but now before it ever works for me it's going to be depleted by 20-40% in wealth taxes. My standards for what I will invest in just went WAY up, and I will bias my investments towards things that have a fast return. That's the only way I can survive as an invstor in a world with wealth taxes,

So Warren's plan will destroy investment, cause capital to flee, and distort private economic planning, with tax avoidance being a large part of decision-making rather than what's best for the company or the country.

And in the end, she won't collect anywhere near the amount of tax she's claiming, because of tax avoidance, capital flight, and a general slowdown of the economy as its lifeblood is taxed out of it. Companies like SpaceX and Tesla probably wouldn't even exist, as both were high-risk, ling-term plays made possible only because a billionaire was willing to fund it. Start taxing away private aggregations of wealth, and you cripple the ability of the private market to engage in large long-term projects or take big risks.

All of these are why almost every country fhat has tried a wealth tax has abandoned it. It's also similar to the failure of the 'luxury' tax.

Last edited by Sam Stone; 10-27-2019 at 07:47 PM.
  #143  
Old 10-28-2019, 01:42 PM
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I'm not very convinced by that argument Sam.

There's already a liquidity premium that means that the required rate of return for long-term investments is higher than for short term ones. Wealth taxes would increase that premium, but simply pointing that out isn't a sufficient argument to say that it's bad. Taxes are always a drag on economic efficiency. But that doesn't mean we should have no taxes, it means we should carefully consider the pros and cons of each.

Letting the ultra-wealthy continue to amass wealth and the political power that comes with it is more efficient from a micro view, but it has major societal downsides. It may be worth some economic inefficiency to alleviate those downsides.

Someone who starts a company that makes them a multi-billionaire will be forced to sell some of their shares to pay taxes. They might even have to give up individual control of their company. But there are plenty of ways to extract enough money to pay taxes from a (perhaps temporarily) $10B company without leaving the founder holding the bag if it craters. Ask anyone who's a shareholder in an S-corp; they somehow always manage to be paid out exactly enough in earnings to cover their taxes each year.

The "high taxes will destroy investment and innovation" argument would be more convincing if most of the examples you gave and that readily come to mind weren't started and headquartered in California and New York, two of the highest tax states. If high taxes were really that disastrous to economic innovation, how come Google and Facebook and Tesla weren't founded in Nevada or South Dakota? Which, again, isn't to say that taxes have no effect on investment. People respond to incentives. But you need to do more to show that a particular tax would be catastrophic. Because relatively high tax states seem to do ok so far. Which suggests that there's some room to increase taxation without all the billionaires heading for the hills.

I do think that there are better ways to increase tax incidence on the rich than a wealth tax, but I also don't think that a wealth tax would be quite as disastrous as you claim.
  #144  
Old 10-28-2019, 02:09 PM
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I think the "unconstitutional" argument has been extremely poorly cited in this thread, as far as I can see. We've got the American Bar Association published policy paper arguing that it is Constitutional by the Chair in Corporate and Business Law at the University of Texas and a few Dopers saying it obviously isn't. Guess which side I'm currently leaning?
I'm a bleeding heart leftist who hates Trump and likes Warren and wants her to be POTUS. I'm also a lawyer. The proposal is very clearly unconstitutional.
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  #145  
Old 10-28-2019, 03:38 PM
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From a paper (66-page PDF warning) by the economists behind Sen Warren's proposal, "If the primary goal of the wealth tax is to correct the regressivity at the very top (due to low income realization relative to true economic income), the wealth tax could be set as a minimum income tax that kicks in only when the wealth tax is larger than the income tax. Colombia has had such a system where the income tax is based on the maximum of reported income and presumptive income defined as 3% of wealth (Londono-Velez and Avila, 2019). The advantage of this system is that such a wealth tax would clearly be constitutional."

Anyone see any flaw in that idea?
  #146  
Old 10-28-2019, 06:42 PM
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Yeah, It has the same problem I already mentioned: It would harm capital growth and investment, and lead to tax avoidance and capital flight, making the economy weaker.

It's also based on the notion that government is a better steward of capital than are the people who earned it in the first place, and that government 'investment' can substitute for private investment without affecting the dynamism of the economy. Socialists may believe that, but they are tragically wrong.
  #147  
Old 10-28-2019, 08:09 PM
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nm

Last edited by CarnalK; 10-28-2019 at 08:09 PM.
  #148  
Old 10-29-2019, 01:39 AM
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It's also based on the notion that government is a better steward of capital than are the people who earned it in the first place, and that government 'investment' can substitute for private investment without affecting the dynamism of the economy. Socialists may believe that, but they are tragically wrong.
I don't believe that the government is generally a better steward of capital, but I'm still in favor of higher taxes on the rich.

Because increasing inequality leads to massive power imbalances and social and political dysfunction. I don't think that makes me a socialist.
  #149  
Old 10-29-2019, 04:39 AM
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I don't think that makes me a socialist.
That's exactly what a crypto-socialist would say.
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  #150  
Old 10-29-2019, 07:23 AM
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I'm glad the argument has shifted from "How could we possibly put a price tag on assets in order to know their taxable value?" to "rich people shouldn't pay taxes."

That Rembrandt in the bank vault that was mentioned earlier is much better stewardship than a school or the interstate highway system.
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