> The specific proposals by Ms. Warren and one of her rivals, Senator Bernie Sanders, to impose a new federal tax on wealth are innovations that require careful consideration.
The NYT and myself have a very different definition of “innovation”.
The NYT and myself have a very different definition of “innovation”.
However, they always collect way less money than the people who made the initial promises said, because the people who were making the promises always assume that if they tax wealth at 75%, their income will be 75% of the current tax base, at the time the wealth tax is proposed and/or passed. The problem is, if you make staying within your tax zone suddenly cost, say, literally 3 billion dollars (and that's the sort of thing we're talking about here), then you just gave the wealth a 3 billion dollar incentive to leave before your tax can come into effect, and the end result is the tax base is much smaller than was anticipated.
So they don't "work" in the sense that they will not collect anything near what the advocates promise they will, and they also chase the wealth away, which, for all the rhetoric about inequality and such, isn't necessarily a good thing for a polity. Generally when people want "equality", they want their wealth level to be raised, not to attain "equality" by lowering the average wealth level. Chasing, say, Jeff Bezos out of the country, along with whatever bits of Amazon he decides to take with him, is not going to be a net gain for the US, just as one example.
They also "work" in the sense that the Gini coefficient probably will indeed go down, so advocates can claim success. But it may not be what you were looking for.
(Also, for the record, I am neither particularly celebrating nor particularly condemning anything or anyone here. This is just how the incentives line up. You can't wish incentive structures away. Effective law takes incentives into account and harnesses them for the desired result. Generally, solving the Big Problems requires something other than the most obvious, direct approach, because there's a selection effect; if the most obvious, direct approach solved the problem, we wouldn't have it.)
You can impose tax on leaving bigger than 3 billion dollars effectively removing leaving incentive.
Also you are assuming they are fluid and actually can leave and stay wealthy somewhere else, which is likely not the case for most of the wealth on the planet.
In the US, the country in question, you'd have some constitutional problems with that plan. That's a bad thing; you need this wealth confiscation to be clearly legal, because you have incentivized billions of dollars worth of legal expenditure to prevent it from happening. (There's those nasty incentives again.)
Also, it turns out that demonstrating to the entire world that you'll just take whatever you want, whenever you want, and punish anyone who tries to protect themselves from that, doesn't exactly incentivize a healthy business environment or encourage the kind of investment you need to create the wealth that you need to bring inequality down by bringing most people up. People need predictability to make plans for the future; this sort of thing extremely strongly incentivizes even shorter term planning than we sometimes get, because nobody knows whether you're going to come along and take most of their stuff tomorrow, or even retroactively. It's not a good plan to create a wealth-producing society.
It's really, really easy to "solve" the wealth inequality problem by simply destroying all (or almost all) wealth, everywhere. It's been done in several countries in the past century. It's not usually the solution people want when they're talking about wealth inequality... oh, they might take a small hit in spite if they knew it was really going to stick it to those "wealthy fat cats", but for the most part, people expect the end of "wealth inequality" to increase their own wealth, not destroy it.
"Also you are assuming they are fluid and actually can leave and stay wealthy somewhere else, which is likely not the case for most of the wealth on the planet."
It is the case for the sort of wealth we are talking about, though. Yes, you can indeed tax the lower and lower-middle classes very hard, because they tend to be unable to move. Not exactly a "wealth" tax anymore, though, is it? Billionaires can move wealth. After all, if we're talking a 75% confiscation rate, it's worth it to move overseas even if they take a 50% bath. Billions of dollars worth of incentives cover a lot of things.
I know this is a hawkish view, but certain individuals have so much wealth and political influence that it's not so far fetched to consider them like a hostile sovereignty that has effective regulatory capture of the the countries they exist in. People generally don't like to be treated like serfs. The taxes will eventually stick, or there will be trouble.
Also, the fact that was repealed doesn’t really say whether or not it was a good policy or not.
If America could raise 1% of its revenue from wealth taxes, that would be a yearly revenue of ~$31.8B.
For reference, NASA's yearly budget is around $21B, and the cost of free college for all Americans would be around $45B depending on plan and how aggressive a single payer could reduce costs.
Now I'm sure any attempt to actually do that would end in a court case, but it's not really worth the risk to the owner of said wealth to offer the government all your Rembrants at bargain basement prices.
Let say you have Warren Buffett's shoes.
Warren Buffett paid $X for those shoes.
A pair of new shoes would cost him $Y.
Someone might pay $Z as they are Warren Buffett's shoes.
Someone might pay $V just to inconvenience Warren (so he would have to go to the shoe store).
Maybe they have some sentimental value to Warren, so he would pay $T not to lose them.
What are the shoes worth?
I mean, I don't know anything beyond what the person you're responding to said, but they made it pretty clear:
> the Government has the right to buy your property for whatever you've listed it for
When one runs out of other ideas, and can't extract money from the bottom 50% of US citizens who do not pay taxes, yet want to continue spending instead of cutting entitlements - treating rich people as another revenue source will continue.
They own dramatically more than their fair share so it all balances out.
And if we're talking about fairness if you were always happy with one of these imbalances then it's only fair to accept the second.
Sure there are massive inequalities in the US - but it is not because of "wealthy people". I could suggest it is because of the mainly failings of humans as a barely evolved species to create scaleable entities (businesses) as it requires a huge human effort, skill, luck, and capaiblity to do. Most humans give up on the really hard stuff required to build strategic levers that multiply their monetary outcomes. And instead focus on small ROI skills (monetarily speaking).
I disagree - I believe this is mostly projection. Most wealthy people aren't exorbitantly wealthy. There are 607 billionaires in the US (thats not many). They're not all hiring lobbyists, and trying to corrupt the US. Neither are the deca-millionaires, they're just either building things (businesses to employ others) or getting better at their craft.
If, instead of starting from a vague sense of what feels fair, you instead see wealth as a measure of one's responsibility to a society and look at the actual effects of these various redistributive policies, you get a very different picture. It's often pointed out (including in TFA) that some of the most prosperous, productive periods of American history had extremely high tax rates, but it's amazing when you actually look at the raw numbers for yourself:
https://en.wikipedia.org/wiki/Income_tax_in_the_United_State...
It's baffling to me that faced with this, people continue to push this idea that the key to economic stimulation is tax cuts at the top end.
The next level of "fair" would be everyone paying the same tax rate, like 10% of their income.
Just because a tax can be shouldered by some group doesn't mean it ought to be levied. It's extremely unfair.
Equity is evil. Equality is good.
The point should be to seek an outcome that is good for the society as whole, and that means balancing a lot of different objectives. For example:
- People who are wealthy and successful should enjoy an elevated standard of living.
- Regardless of your birth and other factors outside your control (race, wealth of parents, etc), it should be possible to achieve wealth through hard work.
- No one who works hard should lack basic necessities like food and shelter.
The current system optimizes heavily for the first item at the expense of the other two, and the fact that someone can even propose with a straight face that a flat $1k/year taxation scheme would be "fair" is just a sign of how broken our attitudes around this are.