# Elizabeth Warren's wealth tax **URL:** \ **Category:** Great Debates\ **Created:** [October 22, 2019, 2:47pm UTC](https://boards.straightdope.com/t/elizabeth-warrens-wealth-tax/842135 "2019-10-22T14:47:50Z")\ **Posts on this page:** 20\ **Page:** 4
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [October 23, 2019, 5:30pm UTC](https://boards.straightdope.com/t/elizabeth-warrens-wealth-tax/842135/61 "2019-10-23T17:30:02Z")
> [@Running\_with\_Scissors](#): > > That might fly in Iowa, but in NYC, $100,000 is barely enough to get by. Living in NYC is, for the most part, a choice. ---
**Author:** ![Running\_with\_Scissors](https://avatars.discourse-cdn.com/v4/letter/r/a183cd/32.png) [@Running\_with\_Scissors](https://boards.straightdope.com/u/Running_with_Scissors)\ **Post date:** [October 23, 2019, 5:39pm UTC](https://boards.straightdope.com/t/elizabeth-warrens-wealth-tax/842135/62 "2019-10-23T17:39:33Z")
> [@Ruken](#): > > Living in NYC is, for the most part, a choice. Using that logic, living _anywhere_ is a choice, and NYC isn’t the only place where the problem lies; almost anywhere in California or Hawaii would be similar. The fact of the matter is that the cost of living varies significantly between different areas of the country, and having such a low cutoff is impractical. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [October 23, 2019, 6:01pm UTC](https://boards.straightdope.com/t/elizabeth-warrens-wealth-tax/842135/63 "2019-10-23T18:01:06Z")
> [@Running\_with\_Scissors](#): > > Using that logic, living _anywhere_ is a choice Exactly. And therefore location is irrelevant when it comes to federal tax policy. ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [October 23, 2019, 6:15pm UTC](https://boards.straightdope.com/t/elizabeth-warrens-wealth-tax/842135/64 "2019-10-23T18:15:44Z")
> [@Ruken](#): > > Exactly. And therefore location is irrelevant when it comes to federal tax policy. It is short-sighted to think of it that way. High income areas of the country are extremely productive, but to the extent that middle class people are driven out of them due to cost, that leads to bad national outcomes. Now, it’s a very difficult problem to craft policy that takes into account the cost of living across the US, but it takes Trump-level lack of insight or interest to actively disregard the situation. ---
**Author:** ![Miller](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/miller/32/481_2.png) [@Miller](https://boards.straightdope.com/u/Miller)\ **Post date:** [October 23, 2019, 6:16pm UTC](https://boards.straightdope.com/t/elizabeth-warrens-wealth-tax/842135/65 "2019-10-23T18:16:53Z")
> [@Ruken](#): > > Exactly. And therefore location is irrelevant when it comes to federal tax policy. It seems like the opposite conclusion is the most valid one, given those premises. ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [October 23, 2019, 7:09pm UTC](https://boards.straightdope.com/t/elizabeth-warrens-wealth-tax/842135/66 "2019-10-23T19:09:47Z")
> [@CarnalK](#): > > A wealth tax isn’t just about getting money from the rich. It’s also to discourage large inactive holdings. Think Scrooge McDuck’s money vault that he goes swimming in occasionally. A wealth tax puts a cost on hording that money. So Scrooge can either invest that money so it outweighs the wealth tax or he can accept it being slowly bled back into the economy. Aside from the fact no one really has a big safe full of inactive money, if there really is a bunch of inactive money sitting around, forcing it back into the economy has the obvious effect of causing inflation in direct proportion to the amount of money being chased out of hiding. Money you remove from circulation is, in terms of the money supply, basically vanished, at least if it sits in hiding long enough. Making it reappear increases the money supply. ---
**Author:** ![bump](https://avatars.discourse-cdn.com/v4/letter/b/7c8e57/32.png) [@bump](https://boards.straightdope.com/u/bump)\ **Post date:** [October 23, 2019, 7:45pm UTC](https://boards.straightdope.com/t/elizabeth-warrens-wealth-tax/842135/67 "2019-10-23T19:45:16Z")
> [@Ravenman](#): > > It is short-sighted to think of it that way. High income areas of the country are extremely productive, but to the extent that middle class people are driven out of them due to cost, that leads to bad national outcomes. Now, it’s a very difficult problem to craft policy that takes into account the cost of living across the US, but it takes Trump-level lack of insight or interest to actively disregard the situation. Fine, but you’d want to set a cutoff that would indicate upper class/rich pretty much anywhere. Setting it to a value that’s basically what a family with two working parents making the average wage makes is absurd. I’d set my cutoff at something like 200-250k. That’s enough to be considered well off anywhere in the country, including NYC/SF, but not so low that you’re going to put a huge dent in people who aren’t necessarily having a lot of spare cash. ---
**Author:** ![Taesahnim](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/taesahnim/32/84_2.png) [@Taesahnim](https://boards.straightdope.com/u/Taesahnim)\ **Post date:** [October 23, 2019, 7:59pm UTC](https://boards.straightdope.com/t/elizabeth-warrens-wealth-tax/842135/68 "2019-10-23T19:59:14Z")
> [@Dinsdale](#): > > A “wealth tax” impresses me as far more complicated than inheritance taxes/restrictions on trusts. No need to get it from everyone every year, so long as you collect it once a generation. The money was already taxed when it was earned. Why tax it again? ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [October 23, 2019, 8:03pm UTC](https://boards.straightdope.com/t/elizabeth-warrens-wealth-tax/842135/69 "2019-10-23T20:03:40Z")
> [@Ravenman](#): > > It is short-sighted to think of it that way. High income areas of the country are extremely productive, but to the extent that middle class people are driven out of them due to cost, that leads to bad national outcomes. Now, it’s a very difficult problem to craft policy that takes into account the cost of living across the US, but it takes Trump-level lack of insight or interest to actively disregard the situation. > [@Miller](#): > > It seems like the opposite conclusion is the most valid one, given those premises. Living in a high cost of living region is an optional luxury. ---
**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\ **Post date:** [October 23, 2019, 8:06pm UTC](https://boards.straightdope.com/t/elizabeth-warrens-wealth-tax/842135/70 "2019-10-23T20:06:17Z")
**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. ---
**Author:** ![Running\_with\_Scissors](https://avatars.discourse-cdn.com/v4/letter/r/a183cd/32.png) [@Running\_with\_Scissors](https://boards.straightdope.com/u/Running_with_Scissors)\ **Post date:** [October 23, 2019, 8:09pm UTC](https://boards.straightdope.com/t/elizabeth-warrens-wealth-tax/842135/71 "2019-10-23T20:09:47Z")
> [@Ruken](#): > > What is your evidence for this? _I_ don’t have a good idea about my not-all-that-complicated wealth; the value of a business is not the sum of its accounts and material assets. One time for tax purposes I needed to determine the value of furnishings in a rental home I owned. This was difficult enough and it ended up being mostly guesswork. It’s one thing to determine the value of cash, bonds or stocks held in accounts, but the difficulty in determining the value of other assets is going to make this next to impossible to implement. Options? Artwork? Other collections? Real estate? Is the government going to force everyone to pay for appraisals for all their privately-held assets? ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [October 23, 2019, 8:13pm UTC](https://boards.straightdope.com/t/elizabeth-warrens-wealth-tax/842135/72 "2019-10-23T20:13:43Z")
> [@Ruken](#): > > Living in a high cost of living region is an optional luxury. This is not on topic to what I wrote. ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [October 23, 2019, 8:16pm UTC](https://boards.straightdope.com/t/elizabeth-warrens-wealth-tax/842135/73 "2019-10-23T20:16:00Z")
> [@Taesahnim](#): > > The money was already taxed when it was earned. Why tax it again? If you get paid $50,000, and get levied one tax of say, 22%; and then another tax of say, 6.2%; and then a third tax of say, 2.9%; why should I care that your income was subject to TRIPLE TAXATION!?!?!?!!? ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [October 23, 2019, 8:40pm UTC](https://boards.straightdope.com/t/elizabeth-warrens-wealth-tax/842135/74 "2019-10-23T20:40:13Z")
> [@Ravenman](#): > > This is not on topic to what I wrote. People choosing less luxurious areas to live, as I have done, is not a “bad national outcome.” ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [October 23, 2019, 8:52pm UTC](https://boards.straightdope.com/t/elizabeth-warrens-wealth-tax/842135/75 "2019-10-23T20:52:47Z")
> [@Taesahnim](#): > > The money was already taxed when it was earned. I have little interest in “why should?” nonarguments, but the above is not necessarily true. My father “earned” a share of stock at $1, now worth $100. Also bought a table for cheap that is now considered an antique with some inflated value. Call it $10–\>$200 just to keep the numbers round. No additional money was earned there. But as to taxing once vs every year, once is certainly simpler. Is simple valuable? YMMV. Although as it stands I would likely pay zero taxes on any of the above that I inherit and immediately sell due to basis reset. ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [October 23, 2019, 9:55pm UTC](https://boards.straightdope.com/t/elizabeth-warrens-wealth-tax/842135/76 "2019-10-23T21:55:15Z")
> [@Ruken](#): > > People choosing less luxurious areas to live, as I have done, is not a “bad national outcome.” Shoot from the hip tax policy is a bad national outcome. ---
**Author:** ![l0k1](https://avatars.discourse-cdn.com/v4/letter/l/bb73d2/32.png) [@l0k1](https://boards.straightdope.com/u/l0k1)\ **Post date:** [October 23, 2019, 10:23pm UTC](https://boards.straightdope.com/t/elizabeth-warrens-wealth-tax/842135/77 "2019-10-23T22:23:43Z")
> [@Ruken](#): > > What is your evidence for this? _I_ don’t have a good idea about my not-all-that-complicated wealth; the value of a business is not the sum of its accounts and material assets. Hire a better accountant to fix your balance sheet. Are you someone that has over $30 million on assets? If not then this tax won’t apply to you. I’m an accountant, this sort of financial analysis is not difficult, it’s basic. ---
**Author:** ![l0k1](https://avatars.discourse-cdn.com/v4/letter/l/bb73d2/32.png) [@l0k1](https://boards.straightdope.com/u/l0k1)\ **Post date:** [October 23, 2019, 10:27pm UTC](https://boards.straightdope.com/t/elizabeth-warrens-wealth-tax/842135/78 "2019-10-23T22:27:07Z")
> [@Taesahnim](#): > > The money was already taxed when it was earned. Why tax it again? All money is taxed multiple times. Why do I have to pay property tax every year? This is an absurd argument. What if the wealth in question is from oil, or other resource extraction? What if it’s inherited? ---
**Author:** ![l0k1](https://avatars.discourse-cdn.com/v4/letter/l/bb73d2/32.png) [@l0k1](https://boards.straightdope.com/u/l0k1)\ **Post date:** [October 23, 2019, 10:32pm UTC](https://boards.straightdope.com/t/elizabeth-warrens-wealth-tax/842135/79 "2019-10-23T22:32:02Z")
> [@Running\_with\_Scissors](#): > > One time for tax purposes I needed to determine the value of furnishings in a rental home I owned. This was difficult enough and it ended up being mostly guesswork. It’s one thing to determine the value of cash, bonds or stocks held in accounts, but the difficulty in determining the value of other assets is going to make this next to impossible to implement. Options? Artwork? Other collections? Real estate? Is the government going to force everyone to pay for appraisals for all their privately-held assets? Every company I’ve ever worked for, and every client I have now, has a listed of fixed assets and the current depreciated value of those assets. You have furniture in a rental unit? Amortize it over seven years. Done. It’s older than seven years? What is the maximum percent you can amortize according to the ppt laws in your state? Done. Or value it at zero. Done. You don’t know what you paid for it? Next time write it down. Your poor bookkeeping practices are not a good argument. ---
**Author:** ![iamthewalrus\_3](https://avatars.discourse-cdn.com/v4/letter/i/258eb7/32.png) [@iamthewalrus\_3](https://boards.straightdope.com/u/iamthewalrus_3)\ **Post date:** [October 23, 2019, 11:33pm UTC](https://boards.straightdope.com/t/elizabeth-warrens-wealth-tax/842135/80 "2019-10-23T23:33:59Z")
There are a few sort-of feasible ways to do a wealth tax and not get tripped up by hard-to-value assets, but they all cause pretty major distortions that may or may not be worth it. 1. Just tax the value of some types of assets. Like, it’s easy to value real property, publicly traded stocks, etc. All the weird stuff just doesn’t get taxed. The problem is that this gives the rich a huge incentive to invest in things that are hard to value. You can extend the set of things that can be valued by hiring an army of accountants, but only to a point. The more comprehensive the list of valuation formulae is, the more incentive there is to create new and arcane financial instruments that are not well approximated by the formula. Like, sure WeWork as a company is apparently hard to value within an order of magnitude, but that’s nothing. Wow much harder would the AA tranche of a synthetic WeWork CDS for sunny Tuesdays on the south side of the buildings be? Giving the financial system as a whole an extra 2% a year of earnings to devise instruments so complicated that no one can figure out what they’re really worth seems unwise. We tried it about a decade ago and it went badly. 1. Require the owner of any asset to declare a value for it, and make that value binding on them to sell. Like, if you say your Monet is worth $2.1m and someone shows up with a briefcase, you have to either sell it to them or raise your valuation (and presumably pay some back taxes on the new correct valuation). There’s a lovely economic efficiency and simplicity argument for this. The market can figure out the price of everything all the time! But it has some sweeping societal implications and about 99% of people who don’t have a PhD in economics hate them. Making capital gains be taxed as normal income (indexed to inflation) gets you almost all the value of taxing the rich more with very little nonsense and is a much better idea. And Constitutional. [Previous page](https://boards.straightdope.com/t/elizabeth-warrens-wealth-tax/842135.md?page=3) [Next page](https://boards.straightdope.com/t/elizabeth-warrens-wealth-tax/842135.md?page=5)