Its simply necessary. Not addressing it is naive and recipe for failure. I don’t have a problem with a wealth tax. I think it’s the best kind of tax as it incentivizes what you want to incentivize in society. The wealthy benefit from the international economy either by global markets or their ability to use their wealth anywhere due to the governmental assurance of currencies and security of nations to provide for their safety. The purpose of such agreements wouldnt be to prevent flight of wealth but to ensure that where the party immigrates to charges them the same amount to remove the incentive for “moving”.
What’s the difference between these kinds of taxes and income taxes? Why do you think these are worse? Or do you think all taxes are evil and/or unnecessary?
You think people who make their money hourly are less entitled to keep their income than someone who inherited by blood? Or someone who earned interest from investments managed by an investment professional?
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You think people who make their money hourly are less entitled to keep their income than someone who inherited by blood? Or someone who earned interest from investments managed by an investment professional?
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I think that the idea that rich people sit on their money like Scrooge McDuck is silly and ignorant. I think that wealth gets invested one way or another into our system, and it’s stupid, counter productive and ultimately economically suicidal to attempt confiscatory taxes to snag that wealth by the government. I think that there is nothing wrong with ‘someone who earned interest from investments managed by an investment professional’, because I realize that such an investment is an injection of capital into our system, constituting jobs or other material benefit to our society. I think someone is entitled to making their hourly wage AND entitled to inherit the wealth made by their parents or grandparents…it’s THEIR wealth, and it shouldn’t be confiscated just because it could be.
Depends…as I said in my first post, I’d need to see the actual details. What I’ve seen so far indicates the wet dreams of a few folks who don’t seem to have a very rigid grasp of how our financial system works, and basically think it’s a good idea to take away all wealth and capital (or some large non-zero percentage of it). If we are talking about some sort of modest tax, then it might not be too bad…but it wouldn’t make up for income tax. If we are talking about confiscatory levels, which you and others DO seem to be talking about, then I’ll just ask…historically, how has that worked out? My impression is…not so good.
Yes, of course it’s necessary. You see the obvious problem that if you got your wish then rich folks are going to leave your country, taking their wealth with them, and you want to ensure you get your cut. Of course, you don’t realize what it will MEAN if they actually leave, to your economy. You have your eyes on the prize…taking all that nasty wealth that the rich don’t really need and using it for the good of society. If you kill the goose that lays the golden eggs then you get a goose dinner!!
7.6 trillion seems to be the 2012 number for total government spending in the US. Total assets are about 188 trillion.
So my estimate was a little low on the amount needed to keep the various government budgets where they are (assuming these numbers are correct and a lot of cash isn’t hiding in foreign accounts that are owned by Amricans but kept secret). The tax rate on wealth would have to be 4%.
Now you take my wife and I. We make about 200K a year and have a net of about 200K in assets. That means we would pay 8k a year in taxes and… not seeing the problem here.
(The snide little bit about understanding how the economy actually works. Ya, might want to elaborate on the actual mechanics you think would be harmed by this sort of taxation assuming we could prevent flight of wealth instead of the nebulous affront)
Can you explain the “business vs secondary markets” bit? I’m not getting it.
In short, I don’t see the difference between owning part of a business and participating in the secondary markets. They’re the same thing; pensions, mututal funds, and banking all devolve into investments in businesses. The secondary market just makes it easier (and less expensive to the overall system) to invest. Even money put in a bank gets loaned out to businness, and the banks have a legal claim on the earnings of the companies. Futures and options just let’s people inject information into the system to arrive a better prices and also tailor risk/reward options to match investors’ individual tolerances.
If I buy into a business, say a 20% share, at some point I’m going to want to cash out. I could waste a lot of time and money trying to find another buyer to step in and pay lawyers along the way for the paperwork and negotiation, or we could just set up a secondary market to transfer the ownership in standard units at standard prices. Or from the companies’ position, how would it work? Would all stock certificates expire and the then current value of the company paid to the certificate holders and financied by a complete new isssuance? Seems extremely inefficient.
That’s all the stock market and other secondary markets do is remove these inefficiencies, so the wealth tax shouldn’t even play into the decision to have secondary markets.
I’m not expert in such things, but ISTM that while middle-class assets (i.e. a house) are hard to conceal, the primary ways the rich, and large corporations, hide income is by holding assets in hard-to-track-down ways, by having, say, a Dutch subsidiary of an Irish subsidiary of a Bermuda subsidiary of a Dutch subsidiary of an American corporation. If they’re holding assets in this way to keep their income out of the hands of the IRS, chances are the assets themselves would be exempt from a wealth tax. If not by this means, then by some similar means.
Just in general, I’m satisfied with the Federal estate tax as a ‘wealth tax.’ When someone dies, legal processes have to occur to transfer the decedent’s assets to his/her survivors, which is an opportune time to tax them.
I’d like to see some higher brackets for the FET, but that’s a whole 'nother argument for a different thread.
Family trusts get around this pretty well usually, at least delaying it a very long time. Also I imagine some sort of play with switching citizenship before the trust expires would allow a wealthy family to dodge the tax entirely, though I’m not sure of the details.
In any case the sad truth is without some pretty ambitious actions it’s pretty hard to get the wealthy to pay their fair share of taxes income or inheritance. Of course I think it would be right and good to pursue capturing evaders more first by making the evading completely illegal but then they own our government so.. ya.. we kind of have to take the government back first.
Savings account is pretty much cash. Money market not far from it. They are parking cash in liquid “investments” with little or no yield. True it is not a vault full of gold coins a la Scrooge McDuck, but it sure isn’t taking risks and investing in a way that creates meaningful numbers of jobs.
And this article cites a survey indicating that the uncertainty over tax policy is having a detrimental effect, even though the One Percenters are, in the majority, in favor of increasing their own tax rates.
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Savings account is pretty much cash. Money market not far from it. They are parking cash in liquid “investments” with little or no yield. True it is not a vault full of gold coins a la Scrooge McDuck, but it sure isn’t taking risks and investing in a way that creates meaningful numbers of jobs.
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No…neither is ‘pretty much cash’. Both are investment instruments, and in both cases the capital is in the system, in circulation and available to be used. A huge pile of cash is, well, a huge pile of cash. The money in it is out of circulation if you have it stashed in a big vault somewhere so you can have sex with some hookers while swimming in it…unless, of course, you pay the hookers with some of the cash, in which case it’s back in circulation. So, you’ve pretty much failed to demonstrate that the rich are sitting on huge piles of cash. What you HAVE demonstrated is pretty much what I said (thanks for backing me up there)…which is that in the current climate, the rich have shifted their investments to much less risky propositions because they are uncertain about the future right now and want to stash their funds where they will be protected. Attempting to tax their wealth isn’t going to make them keen on investment…it’s going to make them find other ways to hide it.
That’s nice. I’d love to see an actual poll of ‘One Percenters’ stating they want, eagerly, to see their taxes raised, and especially that they want a wealth tax as vaguely outlined in this OP and subsequent posts in this thread. I seriously doubt that more than a few Buffet types are keen…and, I note that even in his case he uses tax lawyers to ensure he doesn’t have to pay any extra taxes that he doesn’t have too. If he and others REALLY feel all that strongly about it then there is absolutely nothing preventing one from paying extra taxes to the fed…in fact, all they have to do to ensure this is not hire those tax lawyer types and instead do a standard filing with no deductions.
Where does it say in that brief article that they are selling bonds that cost investors money? Because that makes zero sense…who would buy such a thing? And why?
The only thing I can think of (assuming your interpretation is correct) is that it’s some sort of tax write off similar to folks who write off business losses in the US on their taxes. However, if ALL your investments are money losers then you are going to rapidly be out of money, so I doubt this would be anything more than a hedge. Even in France things are bad enough that the rich are going to invest in guaranteed money losers for the majority of their investments.
The reason this happens is that confidence in banks AND the market is low. The slightly negative rate of return is basically a fee one pays for the backing of a national government on their money’s safety.
It also only happens on short-term bonds, so these types of investments are a signal that big investors want to keep their money liquid but don’t have sufficient faith in the market or corporate bond issues in the short term. The choice being made is “I could put it in a savings account, but banks aren’t looking stable enough. I could put it in stocks, and risk a big loss. I will put it in short-term treasuries so I can get it back into play if the outlook is better in six months, and I’m craving stability so I’m willing to pay a small fee for direct government backing.”
With inflation as low as it is, this kind of investment becomes even more attractive in the short term.
