Here's a good reason why we need a wealth tax

[OscarLevant]

Robert Reich's tweet basically states the case:

 

[Moon]

Need more information. Are they richer due to stock market increases, or do they actually have that much more cash in hand? In general, I think wealth taxes are a horrible idea.

 

[vanceen]

Wealth taxes have some inherent problems associated with them. Those are the main reasons they haven't been widely applied.

First of all, there would have to be an assessment of wealth. Everyone's home, cars, furniture, land, jewelry, golf clubs, and so on would have to be assigned monetary value and added up. This would be an enormous bureacratic burden, involving many times more people than we have now in the IRS. Not to mention the huge intrusion into the lives of citizens. Not to mention the inevitable mountain of challenges and lawsuits over assessments.

Second, it is not at all rare for people to have substantial wealth but low income. To pay a wealth tax, someone in this category would have to liquidate assets. Many of these assets would be in the form of land, houses, or businesses that can't be sold in "pieces", but would have to change hands in order for the tax to be paid. Introducing significant numbers of forced sales would distort markets and tend to lead to under-valuation of real estate and businesses.

Income taxation is clean and clear. When you get a stream of money, you pay tax on it. Billionaires have to realize a cash flow to have billionaire lives; taxing that cash flow works fine.

 

[beancounter]

Wealth is just after tax income.

What we need is a secondary income tax for those with incomes (not wealth...) over a certain threshold.

 

[vanceen]

I would add that I think Reich's statement is idiotic and it makes me think less of him.

The fact that some people have a lot of money is not an argument for a wealth tax.

 

[vanceen]

Wealth is just after tax income.

What we need is a secondary income tax for those with incomes (not wealth...) over a certain threshold.

Wealth isn't after tax income. Wealth is total net worth, i.e. any money you have plus any property you own minus debt.

 

[beancounter]

Wealth isn't after tax income. Wealth is total net worth, i.e. any money you have plus any property you own minus debt.

Wealth is built through the accumulation of income (less taxes paid) over time .. (whether that's from wages, interest dividends, capital gains, etc.)

How do you suppose you would acquire the property mentioned in your post? The down payment, at the very least, is paid from your savings (which is the accumulation of your income, net of various living expenses and taxes)

 

[SkyChief]

What we need is NO DIRECT TAXES.

Then we would be able to freely donate to charities of our choice.

My wife and I would love to donate money to charities, but so much of our wealth is taken from us (in the form of federal income tax, State income tax, property tax ) we cannot afford to donate anything.

(Aside from some clothing and old appliances that we have donated to Goodwill/Salvation Army on occasion)

 

[beancounter]

What we need is NO DIRECT TAXES.

Then we would be able to freely donate to charities of our choice.

My wife and I would love to donate money to charities, but so much of our wealth is taken from us (in the form of federal income tax, State income tax, property tax ) we cannot afford to donate anything.

(Aside from some clothing and old appliances that we have donated to Goodwill on occasion)

What would you propose as an alternative to direct taxes (specifically?)

 

[OrphanSlug]

Meaningless twitter post without near enough context to take seriously.

What we really need is people to extend beyond lazy bumper sticker rhetoric and make a meaningful argument.

 

[Lutherf]

Robert Reich's tweet basically states the case:

"Some guy on Twitter said something and I agree with him so I need to start a thread to show everyone how smart I am!"

 

[NatMorton]

Honestly, if you really think you're entitled to someone else's wealth -- i.e. money you did not earn -- you ought to be embarrassed.

 

[NatMorton]

What we need is a secondary income tax for those with incomes (not wealth...) over a certain threshold.

Why?

 

[vanceen]

Wealth is built through the accumulation of income (less taxes paid) over time .. (whether that's from wages, interest dividends, capital gains, etc.)

How do you suppose you would acquire the property mentioned in your post? The down payment, at the very least, is paid from your savings (which is the accumulation of your income, net of various living expenses and taxes)

It's not a question of how you get it. It's a question of what it is. You can acquire wealth through income, you can receive it as inheritance, it doesn't matter.

"
What Is Wealth?
Wealth measures the value of all the assets of worth owned by a person, community, company, or country. Wealth is determined by taking the total market value of all physical and intangible assets owned, then subtracting all debts. Essentially, wealth is the accumulation of scarce resources. Specific people, organizations, and nations are said to be wealthy when they are able to accumulate many valuable resources or goods. Wealth can be contrasted to income in that wealth is a stock and income is a flow, and it can be seen in either absolute or relative terms."

https://www.investopedia.com/terms/...value of,the accumulation of scarce resources.

 

[Lutherf]

Wealth is just after tax income.

What we need is a secondary income tax for those with incomes (not wealth...) over a certain threshold.

Wealth is "just after tax income"? That's incorrect....VERY incorrect.

Wealth is generally calculated by netting assets against liabilities. For example, if your sole asset is a house that you owe $250k on and the fair market value of the house is $350k then you have "wealth" of $100k. The problem with this kind of calculation is that FMV is quite often hard to determine and/or subject to significant fluctuation.

 

[Lutherf]

It's not a question of how you get it. It's a question of what it is. You can acquire wealth through income, you can receive it as inheritance, it doesn't matter.

"
What Is Wealth?
Wealth measures the value of all the assets of worth owned by a person, community, company, or country. Wealth is determined by taking the total market value of all physical and intangible assets owned, then subtracting all debts. Essentially, wealth is the accumulation of scarce resources. Specific people, organizations, and nations are said to be wealthy when they are able to accumulate many valuable resources or goods. Wealth can be contrasted to income in that wealth is a stock and income is a flow, and it can be seen in either absolute or relative terms."

https://www.investopedia.com/terms/w/wealth.asp#:~:text=Wealth measures the value of,the accumulation of scarce resources.

You can also build wealth through your own initiative and abilities. If you have a shovel and someone needs a hole dug then your asset value has just increased rather dramatically.

 

[MrPeanut]

Wealth tends to accumulate in fewer and fewer hands over time. This is why many countries have progressive tax systems and robust social safety nets.

 

[reflechissez]

Wealth taxes have some inherent problems associated with them. Those are the main reasons they haven't been widely applied.

First of all, there would have to be an assessment of wealth. Everyone's home, cars, furniture, land, jewelry, golf clubs, and so on would have to be assigned monetary value and added up. This would be an enormous bureacratic burden, involving many times more people than we have now in the IRS. Not to mention the huge intrusion into the lives of citizens. Not to mention the inevitable mountain of challenges and lawsuits over assessments.

Second, it is not at all rare for people to have substantial wealth but low income. To pay a wealth tax, someone in this category would have to liquidate assets. Many of these assets would be in the form of land, houses, or businesses that can't be sold in "pieces", but would have to change hands in order for the tax to be paid. Introducing significant numbers of forced sales would distort markets and tend to lead to under-valuation of real estate and businesses.

Income taxation is clean and clear. When you get a stream of money, you pay tax on it. Billionaires have to realize a cash flow to have billionaire lives; taxing that cash flow works fine.

It's your assertion that it would need to cover home, cars, furniture, land, jewelry and golf clubs. Florida used to have an intangible tax (stocks, bonds, mutual funds) but it was repealed.

 

[The Baron]

Robert Reich's tweet basically states the case:

View attachment 67309692

Robert Reich is a reptile. He completely ignores people right to enjoy and control their own personal property.

 

[Helix]

i prefer taxing all income as income above a cap.

 

[SkyChief]

What would you propose as an alternative to direct taxes (specifically?)

Federal Sales Tax.

The rate would be fixed - - maybe 7% or 8%.

Some would argue that a Federal Sales Tax would hurt the poor, and wouldn't affect the rich, but this is simply not true.

Poor people don't buy expensive things, so the amount that they pay for Federal Sales Tax would be very low.

Rich people buy a lot of very expensive things - - they will pay a LOT in Federal Sales Taxes.

 

[Lutherf]

Wealth tends to accumulate in fewer and fewer hands over time. This is why many countries have progressive tax systems and robust social safety nets.

Wealth tends to accumulate in fewer and fewer hands because so many government programs are designed to make people reliant on the government instead of being self-reliant. It's really a good thing, if you're running for office, is the people you seek to rule are 100% reliant on you for their education, shelter, health care, jobs, income, etc. Wealthy people can be independent so governments LOVE to destroy wealth.

 

[vanceen]

It's your assertion that it would need to cover home, cars, furniture, land, jewelry and golf clubs. Florida used to have an intangible tax (stocks, bonds, mutual funds) but it was repealed.

Yes, it's my assertion that those things constitute wealth, and a true wealth tax would include them all.

Tax on assets is of course very common. I pay property tax, which is a very narrow and focused kind of tax on wealth. It's manageable because land and houses are relatively easy to assess. So are stocks and bonds.

 

[Lutherf]

Federal Sales Tax.

The rate would be fixed - - maybe 7% or 8%.

Some would argue that a Federal Sales Tax would hurt the poor, and wouldn't affect the rich, but this is simply not true.

Poor people don't buy expensive things, so the amount that they pay for Federal Sales Tax would be very low.

Rich people buy a lot of very expensive things - - they will pay a LOT in Federal Sales Taxes.

How would you go about collecting that tax?

 

[vanceen]

Federal Sales Tax.

The rate would be fixed - - maybe 7% or 8%.

Some would argue that a Federal Sales Tax would hurt the poor, and wouldn't affect the rich, but this is simply not true.

Poor people don't buy expensive things, so the amount that they pay for Federal Sales Tax would be very low.

Rich people buy a lot of very expensive things - - they will pay a LOT in Federal Sales Taxes.

A sales tax could be a substitute for direct taxes, but it would be equitable only if purchases essential to living were exempted.