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Comment by oh_sigh | Hacker News Reader

I can't really understand proponents of wealth tax...either they are very confused, or are intentionally obscuring the truth for their political purposes. Based on the author's pedigree, I have to unfortunately assume it is the latter. But either way it isn't a great look.

For example, in the article the author laments that Buffett's wealth went up by $X, but he only paid $Y in taxes, and that's not fair to middle class people. But middle class people benefit in exactly the same way - if you pay $250k for a house and a year later because of a housing boom it is now worth $350k, you don't pay taxes on that $100,000 you "made".

If the whole world decides a random rock in your back yard is worth $10M, you shouldn't need to give the government $3M while the rock just sits there.

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You don't even need to look at pedigree, the author's intentions are explicit in the beginning:

> So I regret to inform you that Mr. Buffett is actually the most dangerous kind of billionaire we have. The worst billionaires are the Good Billionaires. The sort who make it seem like the problem is the distortion of the system when, in fact, the problem is the system.

It's also obvious by what they don't say. The author very breezily mentions that Buffett has donated some money, but no amounts or anything.

side note: India Times, please get rid of the silly copy and paste override. It is just plain obnoxious

> because of a housing boom it is now worth $350k, you don't pay taxes on that $100,000 you "made"

Actually, in most states in the USA, you do. When your home's value increases, your property tax in nominal dollars increase.

https://www.marketwatch.com/story/homeowners-are-facing-the-...

Here is a better explanation from https://www.investopedia.com/articles/pf/07/property_tax_tip...

> In order to come up with your tax bill, your tax office multiplies the tax rate by the assessed value. So, if your property is assessed at $300,000 and your local government sets your tax rate at 2.5%, your annual tax bill will be $7,500.

>>But middle class people benefit in exactly the same way - if you pay $250k for a house and a year later because of a housing boom it is now worth $350k, you don't pay taxes on that $100,000 you "made".

Just to note, you don't pay taxes on the speculative "profit", but you do pay property tax as some percentage of it's "value" upon reassessment by a blackbox.

>>If the whole world decides a random rock in your back yard is worth $10M, you shouldn't need to give the government $3M while the rock just sits there.

I totally agree. Unfortunately, that's exactly what governments do with cars and boats. No one should be forced to pay a tithe for owning property or risk being thrown in jail for refusing.

At least where I live, property tax is assessed based on home value, but the multiplier varies based on the overall budgetary requirements for the town. So it's not like you are just always taxed 1% of your home value(or whatever). If every house in the town doubles in price, and the budget remains the same, then whatever multiplier is used would halve. Which makes sense - if home prices increase it doesn't mean that the town actually needs to provide more services to the same amount of residents. Of course, towns frequently see increasing home prices as a sign that they can siphon more money out of people via budget increases, but that is a separate issue.

Interesting that every time wealth tax has been proposed by somebody, it always interestingly has the "limit" set above said person's own personal wealth.

> If the whole world decides a random rock in your back yard is worth $10M, you shouldn't need to give the government $3M while the rock just sits there.

Why not?

General taxation is done on two principles -- ability to pay and the principle of fairness. Those who have more pay more.

If you have a rock worth $10M in your back yard you can certainly pay. You'd have to get a loan or sell the rock to do so, but you have more ability to pay than anybody who isn't a millionaire.

And by not selling for $10M, you're demonstrating that the rock is worth more than $10M to you. So the government is doing you a favor by only taxing on the $10M rather than on the actual value to yourself.

Because if the world later decides the rock is worth $5, the government doesn't give you the taxes back. Taxes levied at the time of transaction are sensible and reduce the risk that people who own volatile assets will end up paying taxes without realizing gains.

They currently don't tax unrealized gains, so how do you know that they won't rebate losses if they ever started to tax unrealized gains?

Because the government doesn't have a history of reducing property taxes when house values decline. In Fairfield county, CT many of the local municipalities left property taxes at 2006 levels straight through 2007-2010 even though real estate was worth less if it were to be sold. Other areas did the same thing.

Think about this - I have un unrealized appreciation in an asset, and I am a normal person, the only way I'd be able to pay the taxes on my $10m rock would be by selling the rock. Wealth taxes can force a sale to cover the taxes. Practically, this is not something we want. In fact, most cities have laws designed to help people NOT be forced to sell. If every long time owner of an apartment in Oakland had to pay taxes on their real-estate appreciation, the majority would be forced to sell. Net: Wealth taxes are strongly regressive, and pro gentrification.

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