Why is a wealth tax unconstitutional?
Really? So the people who inherited George Steinbernner’s estate. When was the value of the NY Yankees taxed at least once?
In a capitalistic society it is not the role of the borrower or capital seeker to allocate capital, it is the role of the capital owner to do so. Blaming a bad credit for borrowing the money rather than the loose credit policies of those who were lending the money to bad credits is putting history and market principles on their heads.
The deeper implications of lemon socialism raise their ugly heads.
Do you know how easy it is to convert capital gains into dividends (its tougher the other way around but a corporation can almost always dividend out earnings and profits)? Some conservativers these days have been trying to convince us taht capital gains taxes are also a form of double taxation so we should be grateful for the 15% we are currently getting.
To some extent yes. Your kids get to go to public school whether you have a dozen kids or no kids at all and we all pay for it in a way that approximates our ability to pay.
EVERY government is “socialist” as conservatives these days seem to define it. Heck, fire insurance is socialst the way conservatives these days seem to define the term.
Corporations are a separate juridical entity not a proxy for the shareholder. They are separate entities subject to their own level of taxation.
The conservative argument is taht if you raise taxes, even a little bit, you will no longer get “from each according to his abilities” because the job creators will go on strike and live in a city under the sea with john galt.
The upper middle class pays the highest effective tax rates. Most of their money is earned so it is tax at ordinary rates rather thanc apital rates and they earn enough to hit the top marginal rates.
We could do it at the top of the scale without affecting consumption very much at all, we could certainly do it at the $1 million plus level. I mean seriously, paying an extra 36K on your second million dollars of income in a year simply isn’t going to make a single bit of difference in your spending or investing habits.
Better to eliminate the cap and let people keep their benefits. Means testing social security changes the nature of social security from an entitlement to a welfare program. You don’t want to do that.
“Poor people are so lucky, they don’t have to pay taxes” is about the lamest rallying cry I have ever heard.
A better question is how is it Constitutional?
You think it was originally bought with untaxed money? The profits have been taxed, and taxed again as dividends, and the increase in value will be taxed, if/when it’s sold.
No, why don’t you explain how easy that is and why anyone would want to do that, and get taxed twice for it? Qualified dividends are taxed twice.
Almost every government is “socialist”, to some extent, as defined by every political science professor, whose class I’ve been in.
Your citation of Amendment 5 doesn’t really work.
Notice the “due process of law” bit. Taxes, in general, are legal and generally passed via a due process of law.
And a levy on the value of your property (aggregate wealth, in this case) is not illegal. Otherwise, property taxes would be illegal as would personal property taxes.
You seem to be arguing that most taxes are illegal, rather than just wealth taxes. Congress has been given the power to levy taxes. Whether a wealth tax is a good idea or not is questionable, but I’m not seeing how there’s a serious argument it doesn’t pass Constitutional muster.
I don’t believe that is true. http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=456
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Better to eliminate the cap and let people keep their benefits. Means testing social security changes the nature of social security from an entitlement to a welfare program. You don’t want to do that.
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Well, maybe I don’t want to do that. And maybe I do. If you eliminate the cap on contributions but keep the cap on benefits then you have done the same thing as if you means-test the benefits.
[QUOTE=ABraut]
The profits have been taxed, and taxed again as dividends, and the increase in value will be taxed, if/when it’s sold.
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The increase in value will not be taxed fully, because of the step-up in cost basis, as I understand it.
Who is John Galt?
oh man, too perfect
Only if you consider people in the 99.5 through 99.9 percentiles ($1.2 million) “the upper middle class.” That’s most of the top 0.5%, in the real world.
Income / Effective Income Tax Rate / Effective Federal Tax rate
Percentiles 96-99
269,800 / 15.2 / 25.7
Percentiles 99.0 - 99.5
588,100 / 19.4 / 29.7
Percentiles 99.5 - 99.9
1,207,200 / 20.7 / 31.2
Percentiles 99.9 - 99.99
4,699,500 / 19.9 / 32.1
Top 0.01 Percentile
35,473,200 / 17.0 / 31.5
States can tax property, but the Federal Government cannot.
Could you explain why you think that this is the case but that the estate tax is acceptable? Is it because the estate tax involves an economic transfer and is thus indirect?
I would stipulate that, at best, the constitutionality of a wealth tax is unsettled.
Yes, property taxes have been determined by SCOTUS to be a “direct tax” and direct taxes are subject to apportionment, except for income tax.
Only if you can find a way to get a wealth tax to be considered an “indirect tax.”
One aspect of the fairness argument that I rarely see expressed requires one to ask a slightly broader question about living in our society: Who benefits the most from our current system of government, laws, and society? This question is followed by: Shouldn’t those that benefit the most pay the most to maintain it?
It seems sometimes to be taken for a given that it’s the shiftless poor sipping beer on the front porch in between cashing welfare checks who “get the most” from the government, but I’d argue it is precisely the richest who actually benefit the most - as evidenced by their increasing wealth.
The wealthy’s overseas investments and trade routes are protected by our enormous military expenditures. Their personal property is kept safe by our Federal, State and local law enforcement agencies. Their intellectual property is protected by government agencies here and abroad. The output of their factories travels across our state and interstate highways. Their workers (at least the ones they haven’t off-shored) are educated in public schools. And on, and on, and on.
The structure of our society is such that a relative few are able to best capitalize on it and become wealthy. That’s a good thing. But to believe that all wealth is created by individual effort without being enabled by the structure of our society is silly, and to shirk the responsibility to pay for the structure that enables generation and preservation of wealth is not merely stingy, but ultimately self-defeating.
I think I somewhat touched on this already in the last paragraph of post #68, albeit not as detailed as you did here.
Congress has the power to tax.
Are you talking about the apportionment requirement?
http://www.taxhistory.org/thp/readings.nsf/ArtWeb/736DB4705B4EE21D85256F2B00548FA3?OpenDocument
http://www.taxhistory.org/thp/readings.nsf/ArtWeb/7CFC6F1046AFB37A85256F2B0054C3CC?OpenDocument
I would argue that Jensen is reading the law too narrowly while a wealth tax is an excise tax under current law. In fact the estate tax (a form of welath tax) is considered an excise tax. Heck, the Corporate icnome tax was considered an estate tax and didn no require apportionment.
Then you must also think that a consumption tax or a VAT are also unconstitutional? You would also be relying on caselaw that is over 100 years old and has been steadily eroded almost since the case was decided.
Good luck with that.