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Wealth Taxes: A Future Battleground [W:471]

Joe Steel

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Typically, debate of US national debt focuses on the proper mix of spending cuts and revenue increases and revenue increases almost always are discussed in terms of income taxes. Here's another perspective on the dichotomy.

IF you’d like to know where American political debates are headed, the data suggest a simple answer. The next major struggle — in economic terms at least — will be over whether taxes on personal wealth should rise — and by how much.

...

While virtually every government could pay off its debts by taxing wealth, such taxes are often politically unacceptable. In other words, fiscal problems are best regarded as problems of dysfunctional governance.

...

Higher wealth in a nation means that there is more to take, and growing inequality means there are more problems that its government might seek to remedy. At the same time, however, this new economic configuration will mean greater political influence for the holders of that wealth, and that will make higher wealth taxes harder to achieve.

Wealth Taxes: A Future Battleground
Taxing wealth is a great idea. One of the most frequently heard arguments against taxation is the disincentive to production it is said to create. That's the basis of the Laffer Curve. We don't have that problem with wealth taxes. Wealth taxes will be completely independent of work. They will reflect the community's fair share of wealth accumulated by any means whether productive effort or just good fortune. Wealth taxes are an idea whose time has come.
 
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fmw

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Taxing wealth is a great idea. One of the most frequently heard arguments against taxation is the disincentive to production it is said to create. That's the basis of the Laffer Curve. We don't have that problem with wealth taxes. Wealth taxes will be completely independent of work. They will reflect the community's fair share of wealth accumulated by any means whether productive effort or just good fortune. Wealth taxes are an idea whose time has come.
Why, so you can give a corrupt congress more money to waste in order grow government even more?
 

Joe Steel

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Why, so you can give a corrupt congress more money to waste in order grow government even more?
Your comment reflects a false premise. Congress is no more corrupt than we let it be. If voters pay attention to what they're doing, we can get an excellent Congress.

Besides, Americans love Big Government. The ink on the Constitution hardly was dry before Americans began thinking of ways the government could do stuff for them.
 

ttwtt78640

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Typically, debate of US national debt focuses on the proper mix of spending cuts and revenue increases and revenue increases almost always are discussed in terms of income taxes. Here's another perspective on the dichotomy.



Taxing wealth is a great idea. One of the most frequently heard arguments against taxation is the disincentive to production it is said to create. That's the basis of the Laffer Curve. We don't have that problem with wealth taxes. Wealth taxes will be completely independent of work. They will reflect the community's fair share of wealth accumulated by any means whether productive effort or just good fortune. Wealth taxes are an idea whose time has come.
The falacy of this approach is in defining what just counts as personal wealth. If that wealth is invested in stocks, as much of it is, then you are simply taking money out of priavte hands, that was being put to very productive use, and transferring it to the gov't which is (or should be) prohibitted from investing it in the same manner. Without the ability to have substancial private investment how can businesses raise capital for start-up/expansion?
 

fmw

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Your comment reflects a false premise. Congress is no more corrupt than we let it be. If voters pay attention to what they're doing, we can get an excellent Congress.
Not false at all. Congress is corrupt and the fact that there might be a reason for that doesn't change the fact. We might get an excellent congress if we were to demand single term limits. The bigger the government the more powerful the congress so Congress will grow it fast as it can.

Besides, Americans love Big Government. The ink on the Constitution hardly was dry before Americans began thinking of ways the government could do stuff for them.
About half of Americans love big government. The half that pays for it feels exactly the opposite.
 

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A Greek guy a few years ago explained how this idea would work out:


A man and his wife owned a very special goose. Every day the goose would lay a golden egg, which made the couple very rich.

"Just think," said the man's wife, "If we could have all the golden eggs that are inside the goose, we could be richer much faster."

"You're right," said her husband, "We wouldn't have to wait for the goose to lay her egg every day."

So, the couple killed the goose and cut her open, only to find that she was just like every other goose. She had no golden eggs inside of her at all, and they had no more golden eggs.

 

MaggieD

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Your comment reflects a false premise. Congress is no more corrupt than we let it be. If voters pay attention to what they're doing, we can get an excellent Congress.
If only that were true. It's not.
 

mpg

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I'm in favor of it as long as it replaces some other tax. Taxes are too high already.
 

274ina

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The falacy of this approach is in defining what just counts as personal wealth. If that wealth is invested in stocks, as much of it is, then you are simply taking money out of priavte hands, that was being put to very productive use, and transferring it to the gov't which is (or should be) prohibitted from investing it in the same manner. Without the ability to have substancial private investment how can businesses raise capital for start-up/expansion?
unerned income is not productive. It is the mechanizem of the LEECH that takes from those creators that work.

and they only pay 15% or 0% taxes on those millions.
 

ttwtt78640

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unerned income is not productive. It is the mechanizem of the LEECH that takes from those creators that work.

and they only pay 15% or 0% taxes on those millions.
In order to get a dividend or captial gain that already taxed income must be invested (at risk) and is taxed yet again. In order to hire you the "boss" first has to get investors (whether that be from a bank loan or from stock share sales) to create that business; in either case those investors, as well as that "boss", expect a decent return on that investment. If you do not want to work at (or do business with) a firm that "overpays" its executives or shareholders, or "underpays" its workers, then you are quite free not to do so.
 

274ina

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In order to get a dividend or captial gain that already taxed income must be invested (at risk) and is taxed yet again. In order to hire you the "boss" first has to get investors (whether that be from a bank loan or from stock share sales) to create that business; in either case those investors, as well as that "boss", expect a decent return on that investment. If you do not want to work at (or do business with) a firm that "overpays" its executives or shareholders, or "underpays" its workers, then you are quite free not to do so.
My income is taxed over and over and over. So what are you complainng about?

Corps are not taxed. (in reality, not laws) So the income is only taxed once. And considering your only paying 15% to ZERO taxes on that income, you have nothing
to complain about.

How about this. A constituional Amendment that says that unearned income must be taxed at 2x the rate of earned income........THAT would be reform.

Lets see, 2 x the (whole) FICA rate alone is about 30%........
 

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The falacy of this approach is in defining what just counts as personal wealth. If that wealth is invested in stocks, as much of it is, then you are simply taking money out of priavte hands, that was being put to very productive use, and transferring it to the gov't which is (or should be) prohibitted from investing it in the same manner. Without the ability to have substancial private investment how can businesses raise capital for start-up/expansion?
The $40 Trillion nest egg that the top 5% have amassed is what is driving the call for a wealth tax. It QUINTUPLED from $8 trillion in 1980 mostly due to low tax rates. Those wealth growth rates are unsustainable and damaging to our economic health. There is TOO MUCH money to invest and too few REAL investments available. This has created a new "industry" in the banking world, they spend their time thinking up new ways to use that excess cash to manipulate prices to our detriment. Take a look at what the banks have done to the aluminum markets. Copper is next.
http://p.nytimes.com/email/re?location=4z5Q7LhI+KVBjmEgFdYACPLKh239P3pg5T3mWUw2cKJEczARywFxliH9BND6f20I4fOhmlorgqgH4JeqBI1AxL7dUMMEXmcKYnJurB8Ldno0fpY7agQKE2zXi1VU9xZil7XXOWbHuirPBL30b00ipkZXKmiQ5jYG167E1qFou6dVB0590wJ8jA==&campaign_id=129&instance_id=30677&segment_id=48693&user_id=558ba203d7c37d7d039b5abfccbdd443&regi_id=28152600
 

Joe Steel

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The falacy of this approach is in defining what just counts as personal wealth. If that wealth is invested in stocks, as much of it is, then you are simply taking money out of priavte hands, that was being put to very productive use, and transferring it to the gov't which is (or should be) prohibitted from investing it in the same manner. Without the ability to have substancial private investment how can businesses raise capital for start-up/expansion?
I don't know but it's irrelevant. We wouldn't be in our predicament if whatever the private sector is doing is what we need to have done. American capitalism has failed. It has created too many poor and is destroying the middle class. We shouldn't put much effort into trying to shield if from harm. Letting it go may be a better move.
 

Joe Steel

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Not false at all. Congress is corrupt and the fact that there might be a reason for that doesn't change the fact. We might get an excellent congress if we were to demand single term limits. The bigger the government the more powerful the congress so Congress will grow it fast as it can.
We can get a new Congress every two years. Whatever it is making Congress corrupt is a short term problem. The solution is better voting.
 

Joe Steel

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A Greek guy a few years ago explained how this idea would work out:


A man and his wife owned a very special goose. Every day the goose would lay a golden egg, which made the couple very rich.

"Just think," said the man's wife, "If we could have all the golden eggs that are inside the goose, we could be richer much faster."

"You're right," said her husband, "We wouldn't have to wait for the goose to lay her egg every day."

So, the couple killed the goose and cut her open, only to find that she was just like every other goose. She had no golden eggs inside of her at all, and they had no more golden eggs.

How quaint.

I doubt, though, that the American People would cut-up a goose looking for eggs to be laid one a day into eternity. I suspect they're much better acquainted with biology than that. I also don't think they view our greed-driven version of capitalism as a golden egg-laying goose. Those days are long gone.
 

iguanaman

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A Greek guy a few years ago explained how this idea would work out:


A man and his wife owned a very special goose. Every day the goose would lay a golden egg, which made the couple very rich.

"Just think," said the man's wife, "If we could have all the golden eggs that are inside the goose, we could be richer much faster."

"You're right," said her husband, "We wouldn't have to wait for the goose to lay her egg every day."

So, the couple killed the goose and cut her open, only to find that she was just like every other goose. She had no golden eggs inside of her at all, and they had no more golden eggs.

Or in the case of the top 5%, greed results in quintupling your net worth in 30 years to $40 trillion.
 

Paschendale

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Taxing stagnant wealth instead of income and spending is actually a great idea. Stagnant wealth does nothing. It just sits there. Earning and spending money is transactions, that's the economy. Wealth sitting around gathering dust is money taken out of the economy. If taxes really do discourage people from doing the things that are taxed, then transitioning to a tax on standing wealth is perfect. No one will be discouraged from making money or spending it, but will instead be discouraged from leaving money sitting around. It's even incentive for the supposedly crucial wealthy class to invest more.
 

Bob Blaylock

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Why, so you can give a corrupt congress more money to waste in order grow government even more?
Look at his “Lean”. If he's true to it, then he's all in favor of bigger, more corrupt government; and thinks it a good thing to take as much wealth as possible from those who rightfully earned it, to be given to parasites who did not.

Untitled-1.jpg
 

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Taxing stagnant wealth instead of income and spending is actually a great idea. Stagnant wealth does nothing. It just sits there. Earning and spending money is transactions, that's the economy. Wealth sitting around gathering dust is money taken out of the economy.
Post #2 already explained that this "stagnant" wealth is often invested, and provided some starting explanation as to what would happen if these investments had to be converted for taxation purposes.

Why can't wealth tax advocates comprehend this?
 

Paschendale

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Post #2 already explained that this "stagnant" wealth is often invested, and provided some starting explanation as to what would happen if these investments had to be converted for taxation purposes.

Why can't wealth tax advocates comprehend this?
Did you miss the part where I described this as incentive to invest? Can you put two and two together and figure out how that relates to your point?
 

Neomalthusian

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Did you miss the part where I described this as incentive to invest? Can you put two and two together and figure out how that relates to your point?
Wealth in any significant amount tends to already be invested. How do you tax wealth that is already invested? Do you really think the "wealthy class" has savings accounts lying around, collecting dust as you said, earning 0.01% interest, ripe for double taxation (wealth tax)?
 

fmw

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We can get a new Congress every two years. Whatever it is making Congress corrupt is a short term problem. The solution is better voting.
Well then by all means go fix the voting.
 

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Joe Steel said:
Typically, debate of US national debt focuses on the proper mix of spending cuts and revenue increases and revenue increases almost always are discussed in terms of income taxes. Here's another perspective on the dichotomy.

IF you’d like to know where American political debates are headed, the data suggest a simple answer. The next major struggle — in economic terms at least — will be over whether taxes on personal wealth should rise — and by how much.

...

While virtually every government could pay off its debts by taxing wealth, such taxes are often politically unacceptable. In other words, fiscal problems are best regarded as problems of dysfunctional governance.

...

Higher wealth in a nation means that there is more to take, and growing inequality means there are more problems that its government might seek to remedy. At the same time, however, this new economic configuration will mean greater political influence for the holders of that wealth, and that will make higher wealth taxes harder to achieve.

Wealth Taxes: A Future Battleground
Taxing wealth is a great idea. One of the most frequently heard arguments against taxation is the disincentive to production it is said to create. That's the basis of the Laffer Curve. We don't have that problem with wealth taxes. Wealth taxes will be completely independent of work. They will reflect the community's fair share of wealth accumulated by any means whether productive effort or just good fortune. Wealth taxes are an idea whose time has come.
Whenever someone starts a thread like this it's easy for each poster to fall back on their politically ideological positions. Frankly, you're hearts are in the right place from your relative view points, but your solutions are misplaced.

After WWII, this country experienced an economic boom. Why?

Because innovation was unleashed along side public-private partnerships. But there was another element to our nation's economic rise that few are talking about: immigration.

Now, stay with me because it will all make sense in a moment. So, I urge you to keep reading...

From 1945 through 1972, the nation experienced an economic boom despite going through three armed conflicts: WWII, the Korean War and the Vietnam War. US Economic policy, foreign trade policy and two major changes in immigration reform helped this country stay atop of its economic might. Until the late 60's, corporation paid a higher tax rate than individual consumers, but since then and especially since the early 80's that trend in taxation has undergone a major shift. Our tax policies where shaped in a way that allowed financial leveraging as the basis of wealth accumulation. As such, the industrial age this nation once experience slowly began to disappear. Outsourcing became the name of the game. If a company could be more profitable by shifting jobs overseas by reducing their labor cost (paying lower wages) and less taxes (lower corporate tax rates in foreign lands) it didn't matter what affect this shift had on society as long as some consumer mechanism was designed to maintain a level of "consumption and debt" where the people believed their standard of living was well maintained, all was well. Fast forward to present day...

We're at a point now where the arguments are framed the wrong way, specifically, the OP to this thread. I've never believed that taxing the rich was the right thing to do. However, what I have said is it's the fair thing to do at this point short of any other reasonable solution. If you're read this far, I urge you to keep reading...

The only recourse most people have when faced with overwhelming debt is bankruptcy. But then what? If they've lost everything including their job and the nation's unemployment rate is high and there are no jobs available for which they are qualified for and retraining would take considerable time, how else are they to manage to met their survival needs? I want people to think about that for a moment.

The only recourse the poor and have are social services and soup kitchens. But when charitable organizations aren't received enough in donations to render assistance, churches are closing their food pantries and government is cutting back on spending on social programs, where do these people go for help in order to survive? Answer: The streets...your local retail business or worse YOUR HOUSE! The revert to their worse survival instincts. This is why we're seeing a rise in crime rates in some areas with high unemployment rates (even when viewed in pockets). Social programs do help, but they aren't meant to be "cradle to grave" support systems. People do need to be incentivized to find meaningful work for themselves. But when they can't acquire the tools they need through education or retraining, they fall back on getting whatever aid they can get...until they're forced to fall back on their basis survival instincts. But the rich can help!

The rich could take one of four approaches. They could:

- pay more in taxes either directly (marginal) or indirectly (eliminate tax credits); or,
- pay more taxes for the same services they receive as the common man (provisions within ObamaCare come immediately to mind here); or,
- pay a higher U.S. corporate tax rate OR pay taxes or repatriotized earnings that return to the U.S.; or;
- (best solution) pay higher wages.

Now, I know none of the above options set well with some people, particularly Conservatives, but of all the options listed above, the best one for a society that's based on free enterprise and consumption IS for those who have the wealth to pay more in the most direct way their money will help the economy grown AND improve their profits long-term. That is, pay your employees a higher wage so that they can be the consumers they are. Get the engine of consumption going again in earnest and corporation can do the things the tenants of Conservatism claims it should be doing:

- keep consumer prices low.
- ensure a robust national economy.
- take care of those in need via charitable giving.
- keep corporate taxes low.
- retain a vibrant industrial complex both in retail, services and military (defense).
- spur creativity and innovation.

This is how you unleash America's ingenuity - "shared sacrifice". The people - employees, laborers - are already paying a higher marginal tax rate than their employers - corporations. The only thing that makes sense as a viable solution to our nation's economic problem is for corporations to make a sacrifice. And that sacrifice can only come in one of two ways: pay more taxes or pay employees a "living wage". I know there is debate on this front, so let me just say this: A living wage IMO means paying your employees a wage rate that allows them to meet their survival needs while also maintain a standard of living expected of the greater societal need.

For example: Most people would agree that we all need food, water, clothing, shelter and transportation. Most socialist countries try to provide these things, but we all know how that works, right? It truly becomes unsustainable after a while. When China faced an explosion in its population growth their governmental structure couldn't afford to maintain, their government believed the answer to this problem was controlling family size. Rationing kids? Whodda thunk it!

Greece begrudgingly accepted austerity measures to control their failed economy.

America cannot afford to enact a never ending stream of social entitlement programs any more than it can keep in place strong austerity measures. Otherwise, we lose. All of us! But a plan that allows a shared sacrifice based on our socio-economic principles would work because no one side is seen as gaining an unfair advantage over the other. This is the current state of things in our nation today. This must change!!

I said from the day I became a member of this board that I came here to learn, to "listen" to various view points and grow. I've studied our nation's current social, political and economic problems with great interest trying very hard not to remain so steadfast in my political viewpoints. It's difficult, but I try to see the problems as each side sees them. And I believe I've heard enough to know that the solutions one side offers up with never work unless both sides are willing to work together. For me, the only option that works is "the rich will have to give up on some of their riches". And since they don't want to pay more in taxes fearing their tax dollars will only go towards "increasing the size of government" and giving more to the "social welfare state" (while ignoring the array of corporate welfare that takes place), the only solution is to pay higher wages. But consumption is the only benefit here. Public investments are also a plus. Think about it...

If America, both its politicians and its citizens, are so worried about foreign entities (be they governments or investment groups) are buying up so much of our debt (not to mention our land and our businesses), the only solution to this problem IS to make "Made AND invest in America" truly mean something again. Empower the people to take a stake in America's economic interest all around not only in living the American Dream (which is faltering as a result of the housing bubble bursting along with 401ks and pension funds going insolvent), but also in providing individuals to buy those Treasury securities foreign investors are buying. So of you may remember how America bought government war bonds during WWII. Why can't we do something similar to this again? You'd be amazed at how quickly American renewal would be once we all were in a position to participate in America's prosperity to ensure our posterity. But consumption is not the only benefit here.

Discuss...
 
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Objective Voice

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(Dang! Gotta get in the habit of using a word processor to edit my post before posting them.) Sorry about the spelling and grammar errors in the above post, but I try to submit my posts before the forum times out. Otherwise, I have to log back in and that's such a pain.
 
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