This proposal is 0.4% tax on wealth above $30m.
The Dutch equivalent is 1.6% tax on wealth above €1m.
The number of Ultra High Net Worth Individuals in the Netherlands is still increasing.
The Dutch equivalent is 1.6% tax on wealth above €1m.
The number of Ultra High Net Worth Individuals in the Netherlands is still increasing.
It may be more comparable to Norway’s wealth tax, which is 0.85% of everything above 200K€ (With some provisions for primary residence and illiquid shares IIUC, discounting these somewhat)
A Norwegian tax professional I had a chance to talk to a few months ago claimed that wealthy people were leaving Norway because of the wealth tax. Are there any Norwegians in the forum that can say more about this?
They present it in the Netherlands as if you are paying 30% "capital gains" tax on an assumed-fixed gain of 5.28%, your actual gain becoming irrelevant under this system. You also pay this earlier - annually, not at the point of realising the profit.
Overall, the Dutch total tax on wealth is still going to be considerably higher.
Another democratic agreement is that you are allowed and encouraged to own capital. (That's why it's called 'capitalism', to distinguish it from other possibilities)
Statements like that never augur well for what follows.
> Why not call it what it is, a pre-death estate tax?
Do you have a cogent objection to estate taxes? Many would consider them the fairest of all possible taxes, since your property rights - past, present, and future - evaporate at death.
> it should be done at the time of use or income generation/realization
Why? What's the rationale, besides personal benefit/preference? Taxing money in motion reduces motion, which is hardly a good thing except when the motion itself is illusory arbitrage (e.g. HFT).
> double jeopardy laws
Double jeopardy is a concept of criminal law applied to humans. It's certainly the wrong term here, and arguably the wrong concept. Even your own "time of use" standard leads to the same money being taxed multiple times. Why should it be any different when assets are held instead of exchanged (see above about money in motion)? Henry George and others have made eloquent arguments for taxing wealth - especially land - instead of income. It has been tried many places and times, generally with good results. Do you have any substantive counterargument, or just random phrases plucked from a pseudo-libertarian website?
CA is imposing a tax on the TOTAL wealth of a person over the limits and excluding real property.
The Dutch impose a tax on the increased value of the wealth in the year, even if it was not "realized", which is more like our Capital Gains.
So an example, if you had Stocks worth 100 million, and they increased in value to 108 million in 2020
Dutch: 108-100: 8 million taxable, you owe $128,000
CA: 108 Million, you owe $432,000
Pretty large difference
and the Dutch Model is better in some ways when your assets DROP in value, which does happen,
so if we are in recession your stocks go from 100 million to 90 million, under the Dutch Model you would not owe taxes, under the CA model you still would
Edit: just found out that in California capital gains are regarded as normal income. So you'd have to pay that 1 million already, but now you'd have to pay another additional 432k... so tax increase of 50%.
Same scenario, 100million in stocks but due to a bad economy you they are now worth 95 million
Do you believe CA should collect $380,000 from someone that already lost 5 million that year?
There is always risks in investments, it is not always gains. CA does not properly account for that IMO
Further you will not get me support income based taxation either, I find income based taxation to be more immoral and unethical than wealth based taxation. It is literally stealing a persons labor
I am a proponent of Henry George's Single-Tax System
As for losing money, yeah in that scenario it's worse. The dutch system sounds better in the regard that it only taxes gains, but of course you'd here have issues as well with volatile valuations where you have gains in one year and losses in the next.
Regarding your potential loss scenario, hypothetically if you've owned 100 million one year and then over the course of 3 years it went down to just 1 million. Wouldn't it be beneficial for society had you contributed a little piece of those 100 million to society when you still had it? Other than you just holding onto it, benefitting nobody, not even you, as you lost it :). In the scenario where your money is stable or increases in value, this is no issue.
That being said, I'm not the greatest fan of estate taxes. My main issue with them is that they basically force you to have some degree of returns otherwise your money disappears, which is IMO kinda sad as it encourages people to invest in even greedier ways. You can e.g. buy a rental property and come up with shitty reasons to evict the tenants. Or you can buy it and keep them around for as long as they live.
Further your position requires one to assume the government will inherently spend the money better than allowing a person to keep the money to invest in a business or blow it on expensive cars yachts (and yes even though things are a net good for society) , your scenario of 100million just vanishing is not realistic as people will move investments in response to losses like that. We can however look at history and see clearly that government does not always spend money wisely
Just look at this comment thread for the cognitive dissonance the surrounds government spending. People asking for CA to justify more taxation in the face of their failure of public policy are simply meet with arguments that even more money will solve the problems
You see government programs are never bad, and never fail because they are bad policy, it ALWAYS because we did not tax or spend enough, no matter how many times this pattern is repeated it is never enough. They could steal 100% of all wealth over 30 Million, and when the problems are not resolved (and they wont be) the supporters of the programs will demand more money, say taking all wealth over 20, then 10, then...
Remember the original income/wealth tax only applied to the top 3% of incomes now it applies to 50%...
Government taxation on income only ever expands, that is the big problem here.
Your taxable amount on €100,000,000 is (approximately) 1.6% of the total, not of the gain. You would pay €1,600,000.
This does replace capital gains (I'm not sure to what extent): it is presented as an assumption that you will gain a fixed amount of [edited: 5.28%].
This site[1] seems to refute your assertion
[1]https://firetheboss.eu/personal-finance/dutch-wealth-tax/
For example, the main table has a column "Tax as % of Wealth"