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  #151  
Old 10-29-2019, 08:03 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.
This is just an indictment of income/wealth/gains taxes, not of any particular tax scheme. It's not going to fly when these taxes, in various forms, have been around for decades and decades, coinciding with lots and lots of economic growth.

And tying that to socialism? Ludicrous. If that's socialism, than I guess the US has been socialist for many decades, with lots of economic success.
  #152  
Old 10-29-2019, 08:48 AM
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Originally Posted by iiandyiiii View Post
This is just an indictment of income/wealth/gains taxes, not of any particular tax scheme. It's not going to fly when these taxes, in various forms, have been around for decades and decades, coinciding with lots and lots of economic growth.

And tying that to socialism? Ludicrous. If that's socialism, than I guess the US has been socialist for many decades, with lots of economic success.
1. Let's assume that government IS a better arbiter of capital than the private sector.
2. And also assume that a wealth tax would be Constitutional.

Would that then mean that the government could turn around and offer high yield bonds? You know, like the private sector can (and does)?

If 1 is true, why don't they offer them now? Seems to me, if they did it would garner them all the capital they could need for spending NOW.
  #153  
Old 10-29-2019, 08:55 AM
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Originally Posted by Kearsen1 View Post
1. Let's assume that government IS a better arbiter of capital than the private sector.
2. And also assume that a wealth tax would be Constitutional.

Would that then mean that the government could turn around and offer high yield bonds? You know, like the private sector can (and does)?

If 1 is true, why don't they offer them now? Seems to me, if they did it would garner them all the capital they could need for spending NOW.
I don't know, and I don't know what this has to do with my post. If you think something in my post was wrong, please point out specifically which part, and I'd be happy to respond.
  #154  
Old 10-29-2019, 09:12 AM
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I don't know, and I don't know what this has to do with my post. If you think something in my post was wrong, please point out specifically which part, and I'd be happy to respond.
Well taxing wealth is very likely to be unconstitutional (which kind of trashes the idea that the taxes would be around for decades eh?)

The other part wasn't about an assertion you made but I thought it went to the heart of what you thought, the government being a better holder of capital than the private sector (Since you took offense to the Socialist comparison)
  #155  
Old 10-29-2019, 09:48 AM
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Well taxing wealth is very likely to be unconstitutional (which kind of trashes the idea that the taxes would be around for decades eh?)
The comment I was criticizing was about taxes dissuading work and investment, which would apply equally to income taxes, which have of course been around for decades.

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The other part wasn't about an assertion you made but I thought it went to the heart of what you thought, the government being a better holder of capital than the private sector (Since you took offense to the Socialist comparison)
I think this is too simplistic. In some circumstances, the government might be. In others, the private sector.
  #156  
Old 10-29-2019, 10:02 AM
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It wouldn't be the holder anyway in this situation. The question is is it better to have a private holder of capital or a marginal dollar of debt that is close to 100% of a country's GDP? Historically the latter has been a recipe for disaster no matter the history of the other side of the equation.
  #157  
Old 10-29-2019, 12:19 PM
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Originally Posted by Kearsen1 View Post
1. Let's assume that government IS a better arbiter of capital than the private sector.
2. And also assume that a wealth tax would be Constitutional.

Would that then mean that the government could turn around and offer high yield bonds? You know, like the private sector can (and does)?
I'll respond directly: No, that doesn't follow.

Because even if we believe that government is a better steward of capital, government is generally not set up to capture the surplus of that economic benefit. In fact, the whole point of having government collect taxes is that the government will spend on public goods: projects with broad improvements to the general lives of the populace that are hard to capture and privatize.

Last edited by iamthewalrus(:3=; 10-29-2019 at 12:20 PM.
  #158  
Old 10-30-2019, 11:48 AM
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So, was watching a video about wealth taxes in South Korea. I won't link to the video unless someone really wants to watch it. The gist, though, is an example they are using from Samsung. I guess in South Korea they have a 65% tax that kicks in on inheritance, so the current Samsung president's actual existential status is currently unclear...i.e., no one knows if he's alive or dead. They are doing this because the wealth tax in South Korea includes, well, all wealth. That means a substantial portion is locked up, as in the case of most billionaires, in stock. Because people know that this tax is going to go into effect, the price of Samsung stock has gone up in anticipation of a large part of the current CEO's death and his heir having to sell it off to pay the tax. It sets up all sorts of issues and people basically gaming the system, and has set up this seemingly loopy thing where they are keeping the fact of whether this guy is alive or dead a secret until and unless the heir and the board of Samsung get some promises from the South Korean government that this could be paid off over time, instead of all at once.

It's the kind of situation you get into when you start talking about wealth taxes of the very rich, since 'wealth' is generally not in piles of money or vats full of gold coins, but instead is in a variable media such as stocks. If you are going to tax that over time, instead of one large hit at the end like South Korea does, you would have to constantly be having to figure out what it's worth...and even doing so and then forcing the person to sell some of it to pay the taxes can change the equation, and also allow others to game the system (i.e. you know Bill Gates is going to have to sell some of his stock to pay the tax, and you know when, so...).

I get what Warren is trying to do (and why...it's a naked play to her base, obviously, and plays well with the faithful), but I don't know if such a system is really workable, or what the unintended consequences would be. Obviously, this would only be something that would affect the very rich...but, honestly, after you go through all of this convoluted horseshit, my WAG is we wouldn't even get that much in new taxes out of it, not to offset the losses in just the areas I can see....and I'm about as far from an expert on this stuff as you can get.
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  #159  
Old 10-30-2019, 12:10 PM
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It wouldn't only affect the very rich, because the wealth-destroying nature of the tax would affect jobs and investment, and we would all be poorer.
  #160  
Old 10-30-2019, 12:23 PM
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It wouldn't only affect the very rich, because the wealth-destroying nature of the tax would affect jobs and investment, and we would all be poorer.
Wait...what? You clearly have not been reading the thread. Investments in equity stocks does not create jobs. Consumers create jobs. It's a closed loop system.

  #161  
Old 10-30-2019, 12:26 PM
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It wouldn't only affect the very rich, because the wealth-destroying nature of the tax would affect jobs and investment, and we would all be poorer.
Typical trickle-down claptrap. Taxation doesn't *destroy* wealth, it spreads it around. Beyond that, government jobs are jobs and government subsidies are investments. The only difference is they're investments stewarded by We The People and (hopefully) in our general interest rather than by one antisocial narcissist stictly for his own.

Last edited by Kobal2; 10-30-2019 at 12:29 PM.
  #162  
Old 10-30-2019, 12:46 PM
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Does the following logic fallacy have a name?
Example 1:
A. Handling a kilogram of nitroglycerin is very dangerous.
B. Therefore you shouldn't put 5 milligrams of nitroglycerin under your tongue when suffering angina.
Example 2:
A. A 90% wealth tax would be hugely disruptive to entrepreneurship.
B. Therefore a 1% wealth tax would also be hugely disruptive.
I've no strong view on a wealth tax one way or the other, but the quality of debate would improve if we would avoid fallacies like the above.

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Originally Posted by Sam Stone View Post
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.
Are you an advocate of "Modern Monetary Theory"?

The argument for a wealth tax is based on the notion that a society might want to afford food and education for poor children, and other services that the public wants; and want to obtain the funds without allowing debt or inflation to skyrocket. Many of us would want such "investment" even without attempting to quantize the "return on capital."
  #163  
Old 10-30-2019, 07:13 PM
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It wouldn't only affect the very rich, because the wealth-destroying nature of the tax would affect jobs and investment, and we would all be poorer.
That's true of any tax. All taxes have deadweight loss. Pointing that out is insufficient to argue that a particular tax should not be implemented. You have to show that the loss will overwhelm the benefits. The benefits, again, are public goods provided by the government and the prevention of social bads that result from massive inequality.

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That means a substantial portion is locked up, as in the case of most billionaires, in stock. Because people know that this tax is going to go into effect, the price of Samsung stock has gone up in anticipation of a large part of the current CEO's death and his heir having to sell it off to pay the tax.
I'm not following this logic. If the stock sale is anticipated in the near(ish) future, the value of the stock should decrease, because the expected result of a large future sale of stock is that there will be lots more supply for anyone who wants to buy Samsung stock which will drive down the price.
  #164  
Old 10-30-2019, 07:31 PM
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I'm not following this logic. If the stock sale is anticipated in the near(ish) future, the value of the stock should decrease, because the expected result of a large future sale of stock is that there will be lots more supply for anyone who wants to buy Samsung stock which will drive down the price.
Yes but WAG : if they dump enough stock then the controlling share of the stock might be up for grabs, which means parties seeking to secure control of Samsung want to start stocking up right now ; while speculators might hope that said parties will pay a lot for the last few shares they're missing.
  #165  
Old 10-30-2019, 08:14 PM
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Yes but WAG : if they dump enough stock then the controlling share of the stock might be up for grabs, which means parties seeking to secure control of Samsung want to start stocking up right now ; while speculators might hope that said parties will pay a lot for the last few shares they're missing.
Could be.

It's not a very impressive point for the "wealth taxes will destroy value" side of the argument if a forced sale actually drives up the price in anticipation of a hostile takeover. If markets are efficient, that means that Samsung's current use of capital is not the best way it could be used.

In that way, wealth taxes could actually increase economic efficiency, the same way that they do with real property.

One reason we tax property is to make sure that the land is used for a high-value use. You don't want (for example) land in central Manhattan used as farmland, so you tax it enough that someone using it for a low-value purpose will be forced to sell it to a skyscraper developer who will make better use of it.

Apparently the same works for other property (which makes sense). Letting the main owner of a big company just pass all that wealth to their kids isn't very economically efficient. Force some market transactions via taxation and other players come in to make better use of it.

Score one for the wealth taxers.
  #166  
Old 11-01-2019, 01:22 PM
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Quick and rough run down of the major factors in calculating net wealth for a Norwegian citizen:

Public stocks: Valued at 75% of their market price as of january 1st of the tax year.

Non-public stocks: Valued at 75% of the of the proportional share of the stock company's net wealth calculation as of January 1st of the tax year.

Stock pools and stock saving accounts: Valued at 80% of their value as of January 1st of the tax year.

Bank deposits and obligations: Valued at 100% as of january 1st of the tax year.

Cash: Amounts above $300 valued at 100%.

Debts: Deducted at 100% of value

Domiciles: Primary domicile valued at 25% of sale value, holiday domicile at 30%, secondary domiciles at 90%.

Net wealth of between 0 and 1 480 000* NOK (USD 162 000) is taxed at 0%.
Net wealth of between 1 480 000* NOK and over is taxed at 0,85% of the value over the overflowing amount. I.e if you have net wealth of 1 500 000 you pay 0,85% in wealth tax of 20 000 NOK.

* For spouses who file jointly, twice these amounts.
  #167  
Old 11-01-2019, 01:34 PM
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Quick and rough run down of the major factors in calculating net wealth for a Norwegian citizen:

[...]
Missed my edit window.

Owned items: Initial appraisal at their insurance rate. (Replacement price) Deduction of 1 000 000 NOK, 20% value on the amount between 1 000 000 to 1 400 000 NOK and 40% value on any amount above 1 400 000 NOK.

Keep in mind that the value here is not the tax rate, it is added to your net wealth and your net wealth is what is taxed at 0,85% above a 1 480 000 NOK floor.

I.e. if I had a Munch valued at 1 400 000 NOK by the insurance appraiser and nothing else, it would add 20% of the value above 1 000 000 NOK, or 80 000 NOK, to my net wealth.

If that amount was what exceeded my 1 480 000 minimum deduction, I would be taxed 0,85% of 80 000 NOK, or 680 NOK, for it.
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