I think you meant to say “Historically speaking” rather than “logically speaking.” And of course, that take is subjective. Lots of good has come from obscene levels of wealth, from building hospitals and endowing schools to museums and symphonies.
Historically speaking, nothing good has ever come from governments deciding “nobody needs ”. I don’t see how so many people just blithely spout that phrase. It basically reads as “a little oppression is fine when applied to the right groups.”
Some perhaps, depending. But not illegal stuff- ever.
Yep.
I can get a loan on my car and/or home- is that 'wealth"?
Not so much in CA- your property taxes do not increase as your home value goes up.
If the IRS had the agents- that would be disallowed.
But Canada does not tax wealth either, except as Property Taxes. In fact almost no nation does.
It is a bad idea.
Right.
Nope, absolutely wrong. Relief of liability is taxable.
I don’t think so. It’s my inheritance, and if I sell it quickly, there’s no step-up basis for capital gains, and it’s not taxable as income.
So if I spend all that on hookers and blow, I’ve got nothing. Except fond memories.
I wondered about that, is it relief of liability if I give the lender something that is worth $10M? They aren’t writing off the loan, they’re going to sell the coin and (after selling expenses) be made entirely whole. Does the law require that I sell the collateral, record it as personal taxable income (or capital gains), and pay the lender with post tax cash? Maybe it does, it wouldn’t surprise me.
Then you have sold it, in effect, and that is taxable.
Really the only way out of the borrow then die is- dying.
Man, they’re ruining all of my plans.
I did call it cheating.
I don’t understand the need to obfuscate this.
Assets - liabilities. If you buy a home then your wealth is the value of the home minus the loan balance. You probably aren’t very wealthy unless and until you pay down the loan significantly or the house appreciates.
If you have a billion dollars in stock and you use it as collateral for a billion dollar loan, you have 2 billion in assets and only 1 billion in liabilities. You have a billion in wealth, which is what you started with. This is a simple calculation for a wealth tax (but of course, the devil is going to be in the details of valuing all of the assets).
You also have a billion in cash that spends like income but doesn’t count as income.
You’re right, I shouldn’t speak in absolutes.
But fundamentally, while billionaire philanthropists might do good things like building hospitals, I’m not comfortable with them building hospitals on their terms. If a hospital is a public good, then the public should get a say in where it’s built. Lest, underprivileged communities might not get their hospitals because Daddy Warbucks wanted his name on a building in his own community.
I also don’t think it’s right that the public might not get a say in things like museums or symphonies. If people are living in poverty, is that really how they’d vote to spend those funds? Why should a select, unelected few get to allocate resources for many?
I’ll readily acknowledge that some philanthropists are better than others at allocating their donations in a way that will provide the most good, but I still don’t think it should be up to them.
I mean, we can start with “governments have said that nobody needs thermonuclear weapons” and go from there. Governments have banned all kinds of things that most people would consider to be great moves.
I’d feel just fine, because I made money. I can, if I choose, sell the statue to pay the taxes, or, if I like the statue more than the price I’d get for it, I can keep it and pay the taxes out of some other source of money.
Those people still take part in the same progressive tax system as the rest of us. We can still debate where all of the tax brackets should be set, and I’d argue that successful doctors, lawyers, and small businessmen probably should be paying somewhat more than they do now, but that’s details. The current rates for them aren’t a fundamental injustice. The problem isn’t the people who are rich because they worked hard; the problem is the people who are rich because they’re rich. The people who got their money just by already having money, not by earning it. There’s a reason why economists use “rent-seeking” as a dirty word: Those folks are parasites. And yet, not only do we allow those rent-seeking parasites to exist, we actually tax them at lower rates than the folks who worked hard.
No, it’s easy. The tax code already draws a distinction between earned income and unearned income. All we need to do is tax the unearned income at a much higher rate than earned income, instead of at a lower rate like we do now.
Because they are allocating their own resources. John Green gets to buy a soccer team and try to single-handedly wipe out tuberculosis. You get to buy Girl Scout cookies, donate your change at McDonalds, or tithe your earning to the Church of Scientology.
The argument that the public would use the money to reduce poverty is disproven by the fact that the public currently decides how we spend trillions, and they don’t. Vehemently.
I don’t think “the public” has much to do with our current government. Wealthy people and corporations dictate policy while we vote for “less bad”. This is the problem we’re trying to solve. “Get money out of politics” is a failed platitude.
Trying to push off all responsibility for our current society onto the rich is satisfying but as you note it’s also not realistic.
Wal-mart started as a sensible outfit making a variety of inexpensive American goods available in smaller towns. Over time, the owners of businesses in small towns - exactly the sort of people held up as examples of good capitalism - realized they were going bankrupt because people cared about nothing but low prices, made possible by bulk purchases and relentless pressure on manufacturers. Soon enough, every item had to be made in other countries. And every business not in the luxury trade had to emulate them.
The rich started noticing that global warming is an onrushing menace a while back. Non-rich people can do a million things that would collectively push down the rising curve, but they have decided to mock anyone who would trade a tiny bit of current pleasure for a better future. Fuck our kids is practically a motto tattooed across their foreheads.
We expect the rich to behave differently? Why? Our past gains, like the 40-hour work week and child labor laws and food regulation, came about solely because millions of the non-rich battled fiercely for decades. The wealthy were forced to back down inch by inch. That may have left a mile of separation but the workers’ own lives were improved.
Maybe if workers didn’t vote for the most venal billionaire and his wealthy friends they would see some relief. And maybe online grousing isn’t the most effective tactic either.
The federal estate tax of 40% that affects large estates is not just on capital gains, but on the total value. Some states also tax estates, often at an additional 16% large estates. For the majority inheriting smaller estates, saving the 0 to 15% on capital gains tax from step up in basis, while paying no estate taxes gives the impression that billionaires must be getting a similar deal. Trusts, annuities, and loans which can save on taxes are available to everyone, but may not be worth the effort or expense unless rich.
And regarding trusts, I read someplace that South Dakota eliminated the rule against perpetuities, so many billions in trusts are held there out of the reach of the IRS.
It sounds awfully punitive to state that if she manages to sell enough albums and songs to earn a billion dollars on her art/image, that somehow she doesn’t deserve to keep it, just because of the number of zeroes.
Why not car dealers with 50 million net worths? That’s not as unbelievable as it sounds; if you own all the stock in a good-sized chain of car dealerships, you could easily have a net worth over that amount, assuming they’re successful.
That’s the thing- a seven-figure doctor is probably more unreasonable in my opinion than someone whose 50 million net worth is because they own stock in their own successful business. One’s just getting paid a ridiculous wage, and the other has a high net worth because they’ve been successful.
The fundamental question (I think) there is whether there ought to be some limit to a person’s wealth. I am inclined to say no, but it is true that money IS power and influence, and I don’t care how many Monkapotamuses Bezos has in his private zoos, but I do care that he is more a citizen than am I. And he is, for all practical purposes.
And everyone should pay equitable taxes, no matter how they got their money or whether it’s income or some other form of wealth.
I agree that there shouldn’t be a limit on the number of dollars or wealth one has. What should be limited (limited, but not reduced to zero) is how one retains wealth that one did not personally work to earn.
Gift link to a New York Times article on how the CEO of Nvidia (worth $127 billion) used tax avoidance strategies so that his family won’t need to pay much if any estate taxes (which might otherwise be about eight billion). The article uses him as an example of how the rich avoid taxes. One paragraph from the article:
Revenue from the [estate] tax has barely changed since 2000, even as the wealth of the richest Americans has roughly quadrupled. If the estate tax had simply kept pace, it would have raised around $120 billion last year. Instead it brought in about a quarter of that.
Exactly. How is that OK? I really have no access to such strategies. And I don’t know how many kids he has, but here come a generation of Trust Fund Babies who will employ buy borrow die and pay virtually no taxes.
Put this on the list of things that would enrage people if they understood it.