Wealth Tax

[Damuri_Ajashi]

@jtgain

A horrific idea. It would destroy the economy. Unless your investment pays a higher rate than the wealth tax (10%) in this scenario, accounting for risk, you are better off putting cash under your mattress and not reporting it.

Rental rates on apartments and retail space get raised by 10% to pay for the wealth tax, making stores less profitable and more likely to put said cash in mattress. Interest rates rise by 10% because nobody would put their money in the bank otherwise. New car sales plummet. Even if you exempt primary homes from the tax, nobody can afford them at these interest rates. Home values plummet and make the current foreclosure mess look like chump change.

Cats marry dogs.

I also think any wealth tax over maybe 1%

[Trinopus]

@Little_Nemo

. . . if your main asset is your house (which is true for many people) and you’re given a tax levy every year based on ten percent of your house’s value (which I think is a realistic figure if this is your main tax plan) you’re going to have a hard time coming up with that money every year without selling your house. And you’ll probably have a hard time selling your house when potential buyers would be liable to the same tax burden.

But since you would have trouble selling your house, you’d have to lower the asking price, which (in any kind of justice) would be reflected in its evaluation for tax purposes, meaning that the tax burden is less. Eventually, the lines intersect. The Invisible Hand works every time.

(The removal of trillions of dollars of paper-value on millions of homes, of course, wouldn’t do the overall economy any good… Still a bad idea!)

[Strike]

@jtgain

A horrific idea. It would destroy the economy. Unless your investment pays a higher rate than the wealth tax (10%) in this scenario, accounting for risk, you are better off putting cash under your mattress and not reporting it.

Rental rates on apartments and retail space get raised by 10% to pay for the wealth tax, making stores less profitable and more likely to put said cash in mattress. Interest rates rise by 10% because nobody would put their money in the bank otherwise. New car sales plummet. Even if you exempt primary homes from the tax, nobody can afford them at these interest rates. Home values plummet and make the current foreclosure mess look like chump change.

Cats marry dogs.

Ah but you forget, it would mean 0% income tax & hiding money would be just as illegal as hiding income is now. It’s not like the tax could be avoided. Either keep a % of assets in the US or you are unable to do business in the US.

[Strike]

@Tastes_of_Chocolate

You are essentially taxing the same item/money year after year. There is now a huge disinsentive to save. That money I’m putting into a retirement plan? I’m going to take a hit to it, every single year. I started putting money into a 401k in my late 20s. That’s 40+ years of taxes I would pay on it. My kids’ college fund? Same thing. Using md2000’s numbers, my savings would be mostly gone before I retire.

My 401k is in stocks. So my savings is being taxed both at my level (since I own the stock) and at the company level (since they own the store/factory).

Meanwhile, my slacker sister is making the same as I am, but spends it all on hookers and blow. No savings, no wealth, no taxes. Andin 40 years, she’ll be looking to live with me, because she didn’t save.

No thanks.

There would be a disincentive to save - for the very rich. Those w/a low net worth (less than ~$10M) would very marginally effect there tax rate by saving less.

[pbear12]

So all the years that my husband and I saved our money and invested would be for nothing. We should have just blown our money. You want to double our taxes and eat up our savings with a wealth tax. Welcome to America. Be punished for saving and investing.

[Really_Not_All_That_Bright]

Let that be a lesson to you.

[Damuri_Ajashi]

@pbear12

So all the years that my husband and I saved our money and invested would be for nothing. We should have just blown our money. You want to double our taxes and eat up our savings with a wealth tax. Welcome to America. Be punished for saving and investing.

Or you could spend it.

Frankly, any wealth tax that is ever imposed would be closer to 1% than 10%. Mostly because people will take their wealth and move to the Caribbean.