At the federal level, income only. States already tax wealth, in the form of taxes on property such as real estate, as @wguy123 ’s post indicates.
You can amend the constitution. So it’s possible to make that change even at the Federal level. It’s just really unlikely.
Property taxes are better understood as fees for service. They started appearing in the US long before the 16th Amendment (which applies only to the federal government, of course), and replaced actual wealth taxes.
It wasn’t until the beginning of the 18th century that states began to adopt uniform taxation based on the property’s value. This applied to all wealth – real, personal, tangible, and intangible property. Uniformity meant that each taxpayer-funded government services based on his or her proportionate wealth.
Illinois was the first in 1818, followed by Missouri in 1820 and Tennessee in 1834 to replace a provision requiring that land be taxed at a uniform amount per acre with a provision that land be taxed according to its value.
One of the many problems with a wealth tax I didn’t make explicit above is the difficulty of assessing value. Value taxes are a different category from either income or wealth. Ad valorum taxes like these typically are fixed over many years. Every time a new property assessment is done around here, people go wild over any new figures. (Even if the assessed value goes up but the rate per thousand goes back so that the total decreases. Nobody understands math.) Imagine the difficulty of doing this nationally. You’d need to double the government payroll and create an entire court system. Nothing would get settled in anyone’s lifetime.
Then please cite the economists who say that a wealth tax is an income tax and so presents no difficulties.
So, you are saying you CAN tax imaginary numbers for certain classes of wealth since it is based on some sort of estimate of the value of that asset, true? And isn’t it shocking that it’s the main wealth building class accessible to the middle class (at least, that seems to me the main wealth builder…maybe it is stocks and other assets for most middle class).
Odd that they cannot estimate the value of stocks that have actual REAL prices assigned to them at a point in time! Boggles the mind!
I can’t cite economists who say that, and I never claimed it myself. I claimed that increases in wealth are income, and that therefore, in the course of going from a multi-millionaire to a centi-billionaire, Musk must have made centi-billions in income.
I disagree. That’s confusing the way the tax is gathered with the purpose. All governments tax to provides services of some sort.
Property taxes are often charged by municipalities, but they also raise revenue by other types of taxes, depending on the municipal powers. Some may charge property taxes, but others may charge an income tax, some a sales tax, or hotel room taxes, and so on.
Whatever the mix of taxes a particular municipality uses, the revenue from all of them are to provide services in some way.
Property taxes are different from service rates like water or electricity, or waste collection, or other particularised service rates a municipality may charge. Those are specifically allocated to, and based on, the service provided.
Property taxes are not generally allocated in that way, at least in my experience.
I’m going by Thomas Piketty’s Capital in the Twenty-First Century. He has separate chapters on “Rethinking the Progressive Income Tax” and “A Global Tax on Capital.”
He admits in the latter chapter than the concept is utopian and goes through a long list of fundamental changes in the way the world works needed to achieve it. He also says there is a difference between his proposal and the property taxes that some countries, including the U.S., levies, mostly in the need for complete transparency of all global information about ownership of everything.
I’d like to be sure we are arguing the same thing. I think a wealth tax - a global tax on capital - is possible, theoretically, if utterly unworkable in our real world. It is not the same as an income tax, however, because wealth and income are different. Is it desirable? I wouldn’t mind utopia but that’s a just another brand of religion I don’t believe it.
Also needed is a Constitutional Amendment re: direct taxes.
That article leaves out a lot of data points. Luckily, their source is easy enough to find, and it has some additional data that lets us dig a bit.
Here’s the underlying data:
| Percentile Group | Top 1% | Top 5% | Top 10% | Top 25% | Top 50% | Bottom 50% |
|---|---|---|---|---|---|---|
| Avg Income $ | 2,152,254 | 734,573 | 473,572 | 268,178 | 169,874 | 21,979 |
| Avg Tax $ | 561,523 | 169,466 | 99,971 | 48,433 | 26,959 | 822 |
| Tax % | 26.09 | 23.07 | 21.11 | 18.06 | 15.87 | 3.74 |
| Tax Bracket %* | 37.00 | 37.00 | 35.00 | 24.00 | 22.00 | 12.00 |
* - Using 2022 tax brackets as a married filer (source data was also 2022)
If anything, I’d argue that $561,523 in federal taxes on an income of $2,152,254 is too low.
The United States taxes wealth above about $15 million at a rate of 40% with the estate tax.
Well, yes, except that tax isn’t levied until the owner dies, and then the heirs pay this tax on their inheritances. There’s no tax until the money changes hands, so it’s not really a tax on wealth.
Funny how they can take out loans with imaginary collateral.
who cares? The guy can’t write about how his ancestors blew through his great great grandfather’s accumulated wealth because he himself has a lot of money? It’s a factual recounting of what happened. What is your point?
I think if poor people knew how awesome having money is they wouldn’t be in such a hurry to take it away from people.
Bad suggestion. Like I said, it can easily be solved by fixing the tax code.
Kinda, but many exclusions.
Kinda- the estate pays the taxes before it get to the heirs. Estate taxes are a very minor part of the budget, ever since the GOP “fixed” them for the ultra-rich.
Which becomes real as soon as the shares are sold for the real current price, as I have noted several times.
As many shares are sold as necessary. The dollar figure is fixed, not the price of the shares. If the current value of the shares doesn’t equal the loan amount then either other assets need to be tapped or the loan defaults. Real consequences in the real world.
Bankers live in that real world. (Well, most do, most of the time. Bankers sometimes suck.) They don’t go for the imaginary.
If you are referring to taxing wealth, that is a direct tax and there are constitutional issues.
No, I am referring to fixing the Income tax code, mostly getting rid of all the crap Reagan did.
The combined worth of the 400 richest Americans is $5.4 trillion (per the Forbes 400 list). Confiscating 100% of this would about double the annual tax revenue, but that wealth wouldn’t be there to do it again the next year. Tthe following year, the next 400 richest could be raided, but they have a combined worth of only about $1 trillion.
Speaking as a beneficiary of that loophole, that’s a really crazy loophole, by the way.