I mean something along the lines of
no person shall be permitted to have a personal fortune of more than 30 million dollars,
all assets and cash over and above 50 million dollars will be put into a pool and split evenly between all citizens over the age of 18 with a personal fortune under 1 million dollars.
A: gq like sort of, any way to come up with even a ball park on how much money that would be per person?
B: what kind of effect would that have on the country in general? I can imagine the Housing crisis would be over in a week, car prices skyrocketing along with other luxury goods. would the rich even feel it?
This would be a disaster. No one who isn’t already doing this voluntarily would work to earn (ie, create wealth) in this country greater than that limit. Fortunes would be moved offshore, where they would not be taxed, or at least not taxed in this country.
Why you think the housing crisis would be over is beyond me. The housing crisis is largely due to lack of confidence in the economy and the banking system. This plan would multiply that uncertainty by a factor of 10-- ie, people would wonder what hair-brained idea he’d think of next.
I’ll also note that this OP, like many others around here, acts as the President could even do such a thing. Laws are passed by Congress, not the President.
Hard wealth caps are a bad idea. Suppose someone does get 30 million dollars: Presumably, that person is very good at doing something. But now that they’ve got their 30 megabucks, what are they going to do now? Whatever it is that they’re so good at doing, there’s just no incentive any more to keep doing it. And if whatever it was that they did was important to the economy at large (which it presumably is, since someone was paying them that money), then the economy at large loses out when that person stops working.
You could maybe argue for an extremely high tax rate above some bracket. There’s room for debate as to what the maximum bracket ought to be. But 100% is clearly going too far.
No. That wouldn’t work. You can’t just pass a law saying that a person would have to be put to death (give up life) or be thrown in jail (liberty) for having too much money. You would have to define a crime, and if you try to say that being wealthy is a crime, that would, IMHO go against the very idea of freedom and natural rights…
Or, you just institute an 100% tax on assets with a 30 million standard deduction.
Or, more practically, a very high top income tax rate, combined with a very high estate tax, or just by getting rid of the gift rules and treating them as income received.
remember, the top marginal tax rate on income was 91% until '64.
I understand that Sweden had combinations of taxes that exceeded 90% (or even 100%) during the 1970s. No, it wasn’t a disaster if by disaster you mean economic collapse. But the government did end up backing off from such policies.
The Swedes had relatively slow growth during the 1970s. Today they still have a high tax regime, with the top marginal tax at 57%. During this decade Swedish growth has been higher than the US’s, except for one year. http://www.scb.se/templates/tableOrChart____75432.asp
No need to cap wealth. A heavy estate tax on the largest estates would accomplish the same end. To my way of thinking, inherited wealth (beyond reasonable limits) is an obstacle to the US achieving equality of opportunity.
Like the right to liberty? Seems some politicians and citizens don’t have much problem quashing that when convenient.
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There really is no realistic way a cap on personal wealth would be proposed, given the present political environment. In the short term, can you think of a better gift that a President Obama could hand to the limping and bloodied Republican Party than giving them tangible (in the eyes of many) proof that Barack Obama has Socialist leanings?
So it couldn’t happen. And well it shouldn’t. For as much as I believe in the principle of wealth-sharing among societies, it seems that the law of unintended consequences would be a stern enough disincentive to stick to more tried and true methods of liberal-to-moderate government policies. Like raising taxes when needed and investing in infrastructure and more that only for the sake of brevity I omit.
A last thought-- the OP’s proposal does strike me as needlessly confiscatory. There are better ways of shaking things up. I think it is a fair assumption that the President-elect, while quite centrist in economic temperament, is also quite well versed in American history, to put it quite mildly. And my hopeful side is that he has Roosevelt-like tendencies in him… Teddy Roosevelt, that is. Busting a few trusts seems a mighty fine way to get rid of some dead weight in upper management and creating a competitive environment for the jobs and investments of the 21st century… those green jobs that can’t be outsourced, for example.
I didn’t say it would work. The post I was responding to said you can’t take away property without due process of law. I was pointing out that the OP wasn’t suggesting property be taken away without due process of law, since the OP was suggesting changing the requisite laws.
Right, because the existence of one person that has inherited wealth means that everyone that is wealthy got it by inheritance. Would you care to guess at the percentage of millionaires that have inherited any significant amount of money? I bet you are off by quite a bit.
Absolutely nothing would happen because no one would comply with the law (through a combination of creative interpretation, moving offshore, and using clever schemes to spread wealth among people without changing how its aactually controlled and who has the beneficial ownership (I’m thinking of something like a partnership with a wealthy person as the general partner and accommodation parties as the limited partners)).
The US estate tax currently excludes the first $2 million. So we’re really not talking about millionaires so much as billionaires. And in the 1980s at least, I’d say that about half of all large fortunes were inherited. Cite.
That’s right. If you say that almost all of the very rich have earned their money, you are at least half wrong.
(I agree with Rand though that tax avoidance must be factored in when proposing extremely high marginal tax rates.)