Replacing all Taxes with Wealth tax
- Thread starter Archbob
- Start date
Tahuti
Writing Deity
- Joined
- Nov 17, 2005
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- 9,492
While a nice idea in principle, such would definitely lead to offshoring, unless it can be internationally implemented, or there is tobin tax in place (which ought to be internationally implemented as well). Even then, it would be very difficult to enforce and implement. Try defining a person's total asset's objectively, for one example.
One the other hand, taxing monetary assets (and only monetary assets) would prevent hoarding and would be easy to enforce as well, especially if you eliminate physical money. And prospective tax havens would have an interest to implement such a tax as well, lest foreign money pours in and suffer the triffin dilemma, trade deficits and crushing debts.
Pro-Cyclical
One the other hand, taxing monetary assets (and only monetary assets) would prevent hoarding and would be easy to enforce as well, especially if you eliminate physical money. And prospective tax havens would have an interest to implement such a tax as well, lest foreign money pours in and suffer the triffin dilemma, trade deficits and crushing debts.
Pro-Cyclical
I'd not take any income-earning businesses public, I'd tell you! That way, my enterprise would be valued at its asset level instead of at its market valuation.
Mise
isle of lucy
There's a valid place for small, narrow, targetted wealth taxes, but there's no way in hell that our entire tax system can possibly work if it's based solely, or even significantly, on taxing wealth. It's a ridiculous idea.
GenMarshall
High Elven ISB Capt & Ghost Agent
I'd rather have my income taxed. Don't tread on my assets! (no pun intended 
)
)
Archbob
Ancient CFC Guardian
Most people don't really have assets.
Mise
isle of lucy
Would you tax net assets or gross assets? I can see problems with both.
Archbob
Ancient CFC Guardian
I'd actually tax net Worth
GhostWriter16
Deity
GenMarshall
High Elven ISB Capt & Ghost Agent
Only in your narrowly defined definition of "assets". What's a car? an asset. The money laying around the bank account? an asset. A house? an asset.
The defenition that I am going for is: Assets is ownership that can be converted into cash (Cash in itself is an asset in itself). Which goes along with the similar concept in economics which an asset is any form in which wealth can be held (e.g. car, house, money in bank account). Not strictly defining it to an enterprise or a business model.
Archbob
Ancient CFC Guardian
You realize the Median Net Worth for a family these days is like $100k, which means like $2k in taxes per year which is far less than most of them would be paying right now. Things like Cars Depreciate incredibly fast so you wouldn't get taxed that much on them.
The average Net Worth of a family is one area where the mean is very different from the Median. The mean is like 5x what the median is because all the rich people just hoarding assets at the top.
The average Net Worth of a family is one area where the mean is very different from the Median. The mean is like 5x what the median is because all the rich people just hoarding assets at the top.
GenMarshall
High Elven ISB Capt & Ghost Agent
I'm not even going to go into the petty details on the statistics. I simply gave out the definition I am going with, and you regurgitate statistics that has no place when I place down the definition I am going with. I'm not arguing about how much a family's net worth is, I'm arguing on how not only is it going to add more burden to the tax payers (I'm not going into the semantics on statistics of Net Worth for a family, I don't care about that in this debate nor do I want to argue about regurgitated statistics) but also would complicate the tax system.
That's dependent on your local city or town. Some people pay property tax on their cars. But this is largely a local issue from town to town. Maybe you're fortunate not to be taxed much on your car in your Town/County/State (Dependent on factors on assessment at your local Assessor's Office and/or the mill rate). Hypotetically, you could have a crappy car that's depreciated, yet your local town would have a high mill rate and still would taxed a lot (Hey, municipal government can't let apartment dwellers get off scott free
).Continuing on this theme of taxing people's assets. It would not be appropriate if this is done on the state and federal level and most people would not like being taxed two more times on their assets if this is already happening at the town/city level.
Then you get into the argument, if you're going to be taxing people's assets on the state and federal level. Then you're going to have to go through the entire process of going through the mill rate and sending assessors out to assess each and every one private property each tax payer owns.
Archbob
Ancient CFC Guardian
See this is you not looking at facts and statistics again. This would not add burden to tax payers, under this system the majority of Americans would be paying far less tax than they are paying now. Your median family would be paying a total of $2000 per year in taxes, which is far less than what your middle-income american pays these days. You argument has no basis in saying that it would place an extra burden on taxpayers when it doesn't. Only the really rich would be paying more than they are right now.
GenMarshall
High Elven ISB Capt & Ghost Agent
No, it's you regurgitating statistics that holds no basis on a definition that I gave. If someone asks "What is obsidian" I plainly tell the person what it is, not regurgitate how much obsidian is on Earth.
Oh lord. Your argument does not even take into consideration of state and municipal taxes that the tax payer also pays into. I'll play your little game, let's say for the sakes of argument the state government keeps their tax system income based and municipal governments maintain their property tax system. How are you calculating a tax payer's net worth? Are you assessing all of their assets (house, savings, retirement, vehicles)? Are you adding in any sort of deductions (You stated that the system is progressive, but only on basis of net wealth. Not including deductions in the current system)?
My own opposition to this proposal is that I don't want the government to be touching what I have been saving up or set aside for later spending. To me, property taxes within municipal governments are tolerable since all they're taxing at most are property and motor vehicles. Not eyeballing your savings, checking account, 401k, and other investments.
It may not be much of a burden to you, but it can be a burden if a person wants to save their money for a larger purchase or spend it later on. Doesn't give much incentive to save and/or invest if it's just going to be taxed. I'm sure if your hypothetical family manages to move up the net wealth bracket, that they'd be a bit peeved about having to pay more giving them a sense of punishment of their hard work. With your statement that they pay only $2000/yr. It may seem rosy, it does not offer any sort of incentive to move up the bracket.
Archbob
Ancient CFC Guardian
Insurance companies do this on a daily basis, estimating someone's net worth is not that hard. The bulk of anyone taxes is federal tax. Anyone who pays taxes and separates them out by percentage knows this. For someone who makes an income of $50k, around the college-educated average for Americans, they pay far less under a wealth tax system than under the current system. There's no way anyone can deny that. A wealth tax disfavors the super-rich and favors everyone else, its a simple concept. For the sake of retirees, you can exempt retirement savings from the tax since 401ks and IRAs are limited in contribution per year anyways.
What you don't seem to understand is at a 1 or 2 % rate, you'd have to store up around a million dollars to actually come out negative against the current tax scheme. The vast majority of people never ever make it to that point anyways.
BvBPL
Pour Decision Maker
The idea of a wealth tax is interesting. It would challenge a lot of stuff about how we understand our nation and would have a lot of unintended consequences. One of those consequences relates to ethnicity. White have vastly more assets than blacks and other ethnicities. As you can see from this chart, by mean whites have more than twice the assets of other ethnicities, but by median whites have more than FIVE TIMES the assets.
