Time to tax wealth - Covid cost Solution

ELM327

TBH I'd be happy if the lifetime dolers had to pay 3% tax let alone 30%

saabsaab

Serious wealth has many ways to avoid tax. I suspect often through loopholes left by legislators.

Geuze

A readable academic article on wealth taxes.

Available for free, no paywall:

https://www.aeaweb.org/articles?id=10.1257/jep.35.1.207

https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.35.1.207



Abstract
This paper evaluates proposals for an annual wealth tax. While a dozen OECD countries levied wealth taxes in the recent past, now only three retain them, with only Switzerland raising a comparable fraction of revenue as recent proposals for a US wealth tax. Studies of these taxes sometimes, but not always, find a substantial behavioral response, including of saving, portfolio change, avoidance, and evasion, and the impact depends crucially on design features, especially the broadness of the base and enforcement provisions. Because the US proposals are very different from any previous wealth tax, experience in other countries offers only broad lessons, but we can gain insights from closely related taxes, such as the property and the estate tax, and from optimal tax analysis of the role of wealth taxation.

Idbatterim

do a flat tax above a certain threshold. Even if it was 25%... probably not "progressive" enough for the hundreds of thousands here, that benefit from the ridiculous wealth redistribution.

I mean this is the arguament you would get, and it is the level of idiocy you get and only come to expect here! "someone on 70k should be paying more tax than someone on 40k" :rolleyes:

Renua in a polite way, after their flat tax proposal didnt go down to well with the public, they effectively said, the electorate are too stupid to understand the concept and they are right...

KyussB

The use of taxes and bonds for funding is an anachronism - one we'll have to put up with for some time more, but which should not stop us from changing our focus on the purpose of taxation.

Among the several main purposes of taxation (grounding demand for the currency, managing inflation), there is the purpose of 'taxing bads' - things we agree are harmful and should be discouraged, like pollution, activities damaging to health (smoking), and excessive wealth inequality (which corrupts society, politics and the economy).

So the purpose of taxing wealth is not for funding. It is 'taxing a bad'. Funding ability is not the method wealth taxes are to be judged by. A wealth tax that can be worked around isn't an argument for removing it, it's an argument for improving it.

Same applies to Progressive Tax vs Flat Tax. Funding is not the method to judge it by - and of the two, Progressive Taxation is far and away the superior method of attenuating income inequalities effect on wealth inequality.

HansKroenke

saabsaab wrote: »

Serious wealth has many ways to avoid tax. I suspect often through loopholes left by legislators.

This is where a property tax is key. Property can't be moved so taxing it becomes a lot easier. Ownign property is being wealthy on the current environment where asset prices have skyrocketed the last two decades while salaries have not to any where near the same extent.

There is a lot to be said for property taxes being more meaningful but I would have a big problem paying them when I see how the money is wasted by persistently inefficient and wasteful governments and civil servants.

GreeBo

FVP3 wrote: »

A wealth tax.




A percentage tax on the 5 million. Not on income. If somethings have to be liquidated, so be it. Most rich people will have easy access to liquidization. I mean if I have million in stocks and I have to liquidate a percentage to pay tax, so what.

So your plan is that the wealth tax will erode the person's wealth?
What percentage were you thinking? If it's more or even equal to their return then that's not very sustainable.

Sam Russell

GreeBo wrote: »

So your plan is that the wealth tax will erode the person's wealth?
What percentage were you thinking? If it's more or even equal to their return then that's not very sustainable.

It is possible to structure the wealth tax as being allowable against income derived from that wealth. So you have a valuable painting worth a million in your lounge - tax due - allowance - nil. You have shares in Apple with dividend - tax due on value of shares, but income tax allowance on dividend derived from the wealth up to value of wealth tax due.

The problem with wealth tax is that it is too easy to hide or disguise wealth. Look at The Trump Organisation, which is being accused in NY of declaring a low value on property for tax purposes but raising it, on the same property, for bank valuations for loans.

Our property tax does not extend to land - I wonder why.