Who said anything about an income tax? I want a national wealth cap.
income tax is whack, tax wealth.
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A big problem with wealth tax is that not all wealthy are what you think of as rich. Old grandma maybe lives in a nice house in a good area that her now dead husband bought for 2 pennies 60 years ago. Now that house is worth millions. That grandma is a multi millionaire, but she may have a very minimal pension. Wealth tax that house and she may have a larger wealth tax than her entire pension income and be forced to move out of her own home.
Another example would be many farmers. Most small farmers don’t earn a lot. Some even go minus some years. But the land and machinery they own are worth extreme amounts of money if sold. Wealth tax them and they will go bankrupt.
So a wealth tax is a very uneven tax. It benefits those who don’t save and those who own business which are not capital intensive. Why should a farmer pay a lot more tax than a work from home freelancer even though both may have the same income?
There are so many weird things that can happen. Imagine you own a small property of land. Then they discover oil on your property. Suddenly you are wealth taxed for an extreme amount of money even though you don’t even want to let anyone drill for oil on that land. Maybe you will even be forced out of that land because suddenly you can’t pay the wealth tax on it.
A big problem with wealth tax is that not all wealthy are what you think of as rich.
YAWN.
This is repeated frequently, and it’s hauled out to mislead people every time this discussion pops up.
It’s repeated frequently because it’s true. A wealth tax that hits the truly rich is only a good tax if it doesn’t have side casualties. If you have a suggestion how to make a wealth tax that also doesn’t affect the examples I have mentioned I’m interested to hear it.
I think that instead of a basic wealth tax, a tax on rental properties and a tax on stocks and corporate ownership is more reasonable. The corporate ownership tax would also have to exclude small companies in which you are a worker yourself so as not to overly tax farms or other small capital heavy small businesses. I personally work with farmers and I know even a 1% tax on the total value of their farms would totally kill most of their profit. I personally know a farm near the city limits which is worth over 12 million dollars just because of the near-city land he owns and farms on. But his income is only average in the region. Yes he could theoretically sell the land to a real estate developer who could build over a hundred houses. But he only wants to farm so he doesn’t. I don’t think it’s fair to tax him on the 12 million, it would kill his business.
Turn housing into a human right instead of a commodity.
Stuff like primary residences and farms have never been what the people proposing a wealth tax have been talking about, so bringing it up is damn near a strawman argument.
How do you design the wealth tax in order that only the"right people" are affected. And if income tax is totally abolished like the post above is proposing, how do we make sure that high income workers pay tax? One could theoretically have a high income but strategically keep ones wealth low by keeping spending and expenses the same. For example by renting a mega yacht instead of owning a mega yacht. Or leasing a luxury car instead of owning a luxury car.
Adding exceptions for residences and farms will just make those the most attractive places to store ones wealth and we don’t want mega rich buying up all the farms or houses. None are more skilled at finding loopholes than the extremely wealthy.
I’m interested to hear suggestions.
Dude, you’re mixing up asset and wealth. Also, this might be a shock to you, wealth tax can be progressive
Wealth = Total Assets - Total Liabilities
Say I own a farm and I have a tractor worth 500 thousand dollars but I also have a 400 thousand dollars loan on it. Then yes I have 500 thousand in assets but only 100 thousand in wealth contribution. However say I own farmland for 12 million dollars and I have no loans on that farmland (as is quite common if the farm was inherited) then for that 12 million worth of farmland, asset = wealth. Same is true for the grandma example if she doesn’t have a loan on the house.
A progressive wealth tax is a good idea however I agree.
