Yeah, I guess that’s a point. Not sure how much that benefits the country if the goal is to rationalize wealth disparities, though.
What’s wrong with double taxation? Nothing. I pay income tax on my salary and then I pay taxes with the money left over. Big whoop.
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.
Yeah, no. They have found that wealth taxes is something that anyone affluent is willing to do a lot to avoid and to lobby against. Norway has one and “too disruptive and hard to administer” has never been among the top arguments, I can’t even remember having hear it mentioned. The chief arguments are:
I already paid taxes on that! (A nonsense argument. If it weren’t, it would be used to protest local and central taxes, which are calculated on the same tax base, but it never is.)
It requires those with family owned companies with low profits to sell off property to pay it. (This might be valid, but could easily be remedied.)
It is unfair, benefiting foreign owners and encourages tax evasion and tax emigration. (The first part is valid argument, but should be fixed by finding a way to equally tax foreign owners. The second is a recipe for a race to the bottom.)
And how is it administered? It’s just a part of standard financial reporting, just like income is.
Of course we don’t have a tax-averse constitution to wrestle with.
Property tax works that way: a tax merely for “existing” / possessing the thing.
I imagine that we’ll do it the same way that we do it now. Our current tax system, based on transactions, already has to put values on all of those sorts of things.
FYI, Sen Warren’s proposal is based on the work of two economists from UC Berkeley. They describe their idea in this 65-page PDF paper, although I have not read it thoroughly.
Errrr no. That’s not anywhere near it.
I mean I can’t speak to the other 11, but what we French have found is that the ultrarich are **really **whingy about it. Then we have found that our President really likes him some rich people.
One of my friends used to be a tax auditor so I can ask him if need be. But as a guess I expect “average market value” to be the answer.
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.
That’s reasonable, but so what? It isn’t like God ordained that Ye Shall Not Countenance Double Taxation. In fact, it’s probably a pretty good analogy: there are people who will say that wearing clothes of mixed cloth is a SIN!!! but I don’t see why I should care.
They could indeed argue that, except that it would be completely irrelevant. First of all, if the argument “all wealth derives from income” is that the value of wealth consisting of property consists only of the realized income of that property then that is pretty obviously untrue. Property can have value in numerous ways beyond any income it is currently generating and at least some would fall under any common definition of “wealth.” If, as I suspect, you mean that the ownership of all property which would be considered “wealth” was acquired at some point via a transaction made possible by the owner’s income (earn money, buy stuff with money) then that is irrelevant as well.
Because even if you accept arguendo that all property ownership derives from some past transaction made possible by income it still wouldn’t eliminate the numerous common-sense and long-standing legal distinctions between income and property. And there is just no real possible chance that the Court is going to declare property is equivalent to income for these purposes simply because that may be how it was ultimately acquired. Furthermore, not all ownership is based on such a past transaction, e.g. the creation of Intellectual Property.
Also, to find that the 16th Amendment authorizes the taxation of all property because it is all somehow an extension of “income” would almost certainly violate the Canons of Constitutional Interpretation because such a broad reading would either conflict with other provisions of the Constitution without explicitly declaring that purpose and/or render another part superfluous.
Yes, it does. But that is because the states are not subject to the Constitutional prohibition and also why property taxes are administered on the state/local level and not the Federal.
Our current system puts value on things when they are transacted. There is no average market value when there is no market. Publicly traded securities? Cash and equivalents? Those are easy. Land + structures? Harder depending on movement in the local market, but we have a framework for that. My intellectual property? My share of a B Corp? My entire small business? This starts getting tricky. I’m not saying you can’t do it, but the OP is asking how, and I’d like to know that too. But I’m not finding any details about how other countries do it online. And EW’s proposal is lacking detail.
I’m assuming we have some process for inheritance taxes. Maybe I should start there.
Good point.
nod. As far as I can ascertain via wiki & Google, the valuation for our ISF was in large parts copy/pasted from inheritance rights.
There were numerous exemptions and exceptions however, which in turn were seized upon by people seeking to escape the tax. Notably antiques, collection pieces and art were all excluded from the total valuation because it’s really hard to pin down the value of a given painting and the volume of transactions on each individual painting isn’t enough to math out a functional average (especially since the cash values of these transactions can shift wildly for no immediately apparent reason).
Which is why there’s a ton of Rembrandts and the like stashed away in Swiss vaults.
The largely subjective value of art such as paintings, statues, etc. has long provided the means for the wealthy to engage in tax avoidance/evasion and money laundering completely independent of any wealth tax. It is also generally reflective of the problems with assessing the value of some types of property for taxation purposes and how either their inclusion or exemption would further alter the relevant markets as people seeking to avoid tax liability would respond accordingly.
Some people are opposed to the idea of double taxation so to the extent that some part of policy making is marketing, then that part should be addressed. Add to that the idea that once the bridge of taxing something more than once is crossed, then it becomes a difference of degree not of kind to go to triple or quadruple or more taxation. I think that’s bad, independent of any potential constitutional issues.
Well it could be that the actual act of putting something on the market and having someone buy it helped with the determination of value. How do you value intellectual property or other things like art work or vast collections of stock if it isn’t being sold?
Owning the rights to music for example or a book can generate royalties which you pay tax on. But to pay tax on what the right to that music based upon someone’s assessment of its value? Who is going to assess the value of all that stuff?
Part of why certain stock has value is because certain people aren’t dumping all their stock.
But “some people” think Zenu is headed towards Earth at light speed in a Boeing 707, but just because they call “He’s cooooooooming!” doesn’t mean that there’s any reason why anyone outside of their belief system should care.
Same with double taxation. Seems to me that there’s a certain percentage of Americans who know instinctively and with tremendous faith that double taxation lies somewhere on the road to hell, and yet can’t explain why that is.
I dunno. Maybe it’s like jazz. You either get it or you don’t; and maybe it’s all about the arguments one doesn’t make that makes it good.
Perhaps because the top 1% has seized most of the wealth generated since the recovery, and the wealth tax is a way of getting some of it back.
And don’t talk to me about how this seizure was justified. Income taxes tax income whether or not the income was justifiable.
I don’t know. I get a statement every month detailing the extent of my (rather feeble) wealth, and I’m sure Bill Gates does also. Some things might be harder to value, like cash in your mattress and non-liquid assets like art. But we could do something like in real estate, and tax based on purchase price.
As for patents, which was brought up, the value of a patent or copyright is basically the royalties you make from it, and those are taxed already.
It’s not like we need to go through file drawers worth of paper to value wealth any more. At least not wealth which would be subject to the tax.