American wealth inequality is staggering. A wealth tax, which would hone in on the money people actually have, rather than just the money we earn and spend, could be a solution.
Well, I'm not the smartest guy on my block but like most everybody else on this site I won't let that stop me from commenting.
a question that was not even raised in the video. Licenses and fees on your car is kind of a tax, do they get to reduce their tax burden by what they have already paid? Same question on house and property taxes, they have already paid some tax on their property so would they deduct that from the tax owed by this or would that be considered double taxation?
And what happens when politicians decide they are not gaining enough money from this tax? Do they increase the tax amount or lower the line on who has to pay? This then becomes another political football that is played at the whims of the political party in power.
The last piece on my mind (I told you I wasn't the smartest guy on my block so my mind is small) is I think they would be better served in presenting this if they also did research on how a lot of these people made their money in the first place. I mean, who was a trust-fund baby vs who actually earned it in the first place? Bill Gates did not start out with a silver spoon in his mouth but he built up a company that a lot of people wanted a part of and along the way made himself (and others) very rich. And they have paid taxes on that income and growth as it's gone along. So wouldn't taxing his current wealth be another form of double taxation?
Why go to all that trouble of a new tax? Why not just restructure things so that there is a maximum amount a person can make and anything over and above that belongs to the government? basically the same thing in my view.
See, this is how wealth works: If your wealth consists of equities, or real estate, or art, or collectibles, or whatever - you aren't taxed on the value of the wealth, because it's subjective. It's only paper money at that point. When you sell it, you're taxed on the capital gains - based on what you were actually able to get for it at the time you sold it.
If someone had collected enough Beanie Babies to qualify for a wealth tax (or tulips back in the day, or real estate back in the early 2000s) - they would have been taxed on that wealth under this idea. Then when the bottom fell out of the market for Beanie Babies (or tulips, or real estate), and the person's entire investment dropped dramatically in perceived value, would they get paid back for the taxes they were charged for money they actually never made?
I am truly impressed with the caliber of everyone's Comments here.
Not.
I'm truly impressed by your fine grasp of the challenges with taxing wealth, when much of it would exist only on paper at the time of taxation, and how you've addressed those challenges.
What difference do the tax rates make, when you can't get around the fact that taxing wealth is often a tax on something that's purely subjective? Who's going to pay to appraise the items that constitute the wealth every year? What happens if they become worthless but you've taxed someone lots of money on their perceived past value? It's just not practical.
Push for the capital gains tax to be increased if you want a practical way to tax wealth.
Several people have asked questions, or made suggestions, or stated why they were against the plan as presented in the posted video. Do you have anything to add that might be an actual conversation around the seed you started? It's kind of difficult to discuss a seed that you actually posted if you are not willing to take part in it.
Snuffy , the way I see it , and anyone is free to correct me , is Bob is being a salesman , and the video is his version of a presentation , and as any salesman would do they will make their presentation in its best light .
The video on its face , is well presented , and on its face makes some sense, but human nature when watching such an idea , is most people will look at all those charts and graphs and see where they fall, people like to see what they will loose vs what they will gain.
The video explains it only affects a small percentage of the higher income earners so those under that threshold wont be affected , they it appears have nothing to lose. so far so good for the presentation.
The lynch pin of the whole presentation though is the people in the groups that will be taxed have to continue have that level of income( wealth) so there has to be an incentive to continue to have that revenue stream, under what I posted , there is no incentive to continue to have that income, so I can understand why it was disregarded , you put an upper cap on what someone can earn and they will only earn up to that point and take the rest of the time off, no body will work for no pay or half pay .
According to the vid , those in the mentioned group, will pay a tax rate on all income, say its 20% after they make over a certain amount another 2% is added on that income over a certain level, mosquito bite really maybe 2, IF they reach another income level, another 3% over that level is added , its incremental , they are not paying the full 25% on everything they earn.
2-5 mosquito bites , just annoying , but not enough to take away the incentive to continue on.
Where as my post about a top cap on income is the equivilant of 60 million mosquito bites all at once, which would make the idea in this presentation goes right out the window because the incentive to create the wealth is gone, if the wealth is gone there is nothing to be taxed and the government doesnt get the money to spend , which is what it is actually after , not information, and without that group to pay those taxes they will focus on a group in a lower tax bracket to make up the loss, right on down the line .
the threshold will eventually be lowered to the point that some one finds themselves in the taxable group that when it started they were uneffected.
I don't know if this is the right plan, but I would endorse an effort to activate excess capital lying dormant and get it into the economy where it can benefit more of society. I don't endorse taxing people just because someone is butthurt that some people have more stuff than they do. Very often I see that emotion of envy behind these pushes to tax the rich.
I would endorse an effort to activate excess capital lying dormant and get it into the economy where it can benefit more of society
What do you consider to be lying dormant? Stuck in a money market account? Really, if you bought a painting, your investment in that painting is lying dormant as long as it's hanging on your wall.
Raising capital gains taxes is about the only viable way I can see to tax wealth, although even then, it's not taxed until you sell it.
What do you consider to be lying dormant? Stuck in a money market account?
Sure, that's a fair example. Since I'm not a billionaire, I really don't know how much the mattresses of billionaires are stuffed with money.
Thinking of a corporation, though, I know that for a quite a while, many people were critical of Apple for holding on to more cash than any corporation ever has rather than reinvesting it in r&d or (as they ended up doing) finally issuing dividends to investors.
Raising capital gains taxes is about the only viable way I can see to tax wealth
I tend to agree. I think it's sort of fundamentally unfair to claim someone has X dollars of wealth. A thing has value if you can sell it and we don't truly know what that is until the sale happens. This is one of my biggest gripes with property tax. Every year, the county assessor tells me what my house is worth and I think "yeah, well, good luck actually selling it for that much."
Thinking of a corporation, though, I know that for a quite a while, many people were critical of Apple for holding on to more cash than any corporation ever has rather than reinvesting it in r&d or (as they ended up doing) finally issuing dividends to investors.
I get that. Although I can see why a corporation, or an investor, would want to hold onto some cash so they'd be ready when a good opportunity presented itself.
The Federal government has not taxed wealth but states and cities do tax wealth. Property taxes are an example of state and local wealth tax. Typically state wealth taxes are used to fund education and local infrastructure.
BTW, over 85 pct of national education is paid for by state and local taxes; not by the Federal government. National expenditures on education is about $1.2 trillion. More is being spent on education than the military. But the bulk of the cost of education is paid for with state and local wealth taxes.
So, we already have wealth taxes in the United States, just not at the Federal level.
Unfortunately those state and local wealth taxes have lowered Federal tax revenue because of SALT deductions. State and local wealth taxes are deductable for Federal income taxes; the SALT deduction protects income from Federal taxation which mostly benefits the wealthy who pay more state and local wealth taxes. Limiting or eliminating SALT deductions would make the state and local wealth taxes a true wealth tax rather than a Federal tax dodge.
Elizabeth Warren's idea is actually superfluous. Eliminating the state and local wealth tax dodge through SALT deductions accomplishes the same thing. State and local government already have laws and mechanisms in place to tax wealth. There isn't a need to establish some sort of new tax scheme at the Federal level. State and local wealth taxes shouldn't allow the wealthy to hide income from Federal taxation.
S E E D E D C O N T E N T
Please watch the entire video before Commenting - there's some important stuff near the end.
Please Comment strictly on-topic.
Well, I'm not the smartest guy on my block but like most everybody else on this site I won't let that stop me from commenting.
a question that was not even raised in the video. Licenses and fees on your car is kind of a tax, do they get to reduce their tax burden by what they have already paid? Same question on house and property taxes, they have already paid some tax on their property so would they deduct that from the tax owed by this or would that be considered double taxation?
And what happens when politicians decide they are not gaining enough money from this tax? Do they increase the tax amount or lower the line on who has to pay? This then becomes another political football that is played at the whims of the political party in power.
The last piece on my mind (I told you I wasn't the smartest guy on my block so my mind is small) is I think they would be better served in presenting this if they also did research on how a lot of these people made their money in the first place. I mean, who was a trust-fund baby vs who actually earned it in the first place? Bill Gates did not start out with a silver spoon in his mouth but he built up a company that a lot of people wanted a part of and along the way made himself (and others) very rich. And they have paid taxes on that income and growth as it's gone along. So wouldn't taxing his current wealth be another form of double taxation?
I don't think you understood the numbers, which is understandable because really big numbers aren't part of our world.
Please watch the video again, paying attention to who would pay this tax. I think you'll find the answers to your questions.
No, I understood the numbers and I understood who would pay this new tax. I don't think you understood what I said.
Why go to all that trouble of a new tax? Why not just restructure things so that there is a maximum amount a person can make and anything over and above that belongs to the government? basically the same thing in my view.
If something like this ever comes about gold will skyrocket and hardware stores will run out of shovels.
there will be a run on mason jars and matresses….
See, this is how wealth works: If your wealth consists of equities, or real estate, or art, or collectibles, or whatever - you aren't taxed on the value of the wealth, because it's subjective. It's only paper money at that point. When you sell it, you're taxed on the capital gains - based on what you were actually able to get for it at the time you sold it.
If someone had collected enough Beanie Babies to qualify for a wealth tax (or tulips back in the day, or real estate back in the early 2000s) - they would have been taxed on that wealth under this idea. Then when the bottom fell out of the market for Beanie Babies (or tulips, or real estate), and the person's entire investment dropped dramatically in perceived value, would they get paid back for the taxes they were charged for money they actually never made?
I am truly impressed with the caliber of everyone's Comments here.
Not.
I'm truly impressed by your fine grasp of the challenges with taxing wealth, when much of it would exist only on paper at the time of taxation, and how you've addressed those challenges.
Not.
Did you watch the video? Did you notice the tax rates and their points of application?
Try doing those things...
... or alternatively, you can continue to give explanations that have nothing to do with the actual plan.
What difference do the tax rates make, when you can't get around the fact that taxing wealth is often a tax on something that's purely subjective? Who's going to pay to appraise the items that constitute the wealth every year? What happens if they become worthless but you've taxed someone lots of money on their perceived past value? It's just not practical.
Push for the capital gains tax to be increased if you want a practical way to tax wealth.
Several people have asked questions, or made suggestions, or stated why they were against the plan as presented in the posted video. Do you have anything to add that might be an actual conversation around the seed you started? It's kind of difficult to discuss a seed that you actually posted if you are not willing to take part in it.
No, they have not.
Apparently, you need to re-read them.
Snuffy , the way I see it , and anyone is free to correct me , is Bob is being a salesman , and the video is his version of a presentation , and as any salesman would do they will make their presentation in its best light .
The video on its face , is well presented , and on its face makes some sense, but human nature when watching such an idea , is most people will look at all those charts and graphs and see where they fall, people like to see what they will loose vs what they will gain.
The video explains it only affects a small percentage of the higher income earners so those under that threshold wont be affected , they it appears have nothing to lose. so far so good for the presentation.
The lynch pin of the whole presentation though is the people in the groups that will be taxed have to continue have that level of income( wealth) so there has to be an incentive to continue to have that revenue stream, under what I posted , there is no incentive to continue to have that income, so I can understand why it was disregarded , you put an upper cap on what someone can earn and they will only earn up to that point and take the rest of the time off, no body will work for no pay or half pay .
According to the vid , those in the mentioned group, will pay a tax rate on all income, say its 20% after they make over a certain amount another 2% is added on that income over a certain level, mosquito bite really maybe 2, IF they reach another income level, another 3% over that level is added , its incremental , they are not paying the full 25% on everything they earn.
2-5 mosquito bites , just annoying , but not enough to take away the incentive to continue on.
Where as my post about a top cap on income is the equivilant of 60 million mosquito bites all at once, which would make the idea in this presentation goes right out the window because the incentive to create the wealth is gone, if the wealth is gone there is nothing to be taxed and the government doesnt get the money to spend , which is what it is actually after , not information, and without that group to pay those taxes they will focus on a group in a lower tax bracket to make up the loss, right on down the line .
the threshold will eventually be lowered to the point that some one finds themselves in the taxable group that when it started they were uneffected.
[deleted]
The vast majority understands that the government needs information.
So?
So?
I don't know if this is the right plan, but I would endorse an effort to activate excess capital lying dormant and get it into the economy where it can benefit more of society. I don't endorse taxing people just because someone is butthurt that some people have more stuff than they do. Very often I see that emotion of envy behind these pushes to tax the rich.
What do you consider to be lying dormant? Stuck in a money market account? Really, if you bought a painting, your investment in that painting is lying dormant as long as it's hanging on your wall.
Raising capital gains taxes is about the only viable way I can see to tax wealth, although even then, it's not taxed until you sell it.
Sure, that's a fair example. Since I'm not a billionaire, I really don't know how much the mattresses of billionaires are stuffed with money.
Thinking of a corporation, though, I know that for a quite a while, many people were critical of Apple for holding on to more cash than any corporation ever has rather than reinvesting it in r&d or (as they ended up doing) finally issuing dividends to investors.
I tend to agree. I think it's sort of fundamentally unfair to claim someone has X dollars of wealth. A thing has value if you can sell it and we don't truly know what that is until the sale happens. This is one of my biggest gripes with property tax. Every year, the county assessor tells me what my house is worth and I think "yeah, well, good luck actually selling it for that much."
I get that. Although I can see why a corporation, or an investor, would want to hold onto some cash so they'd be ready when a good opportunity presented itself.
The Federal government has not taxed wealth but states and cities do tax wealth. Property taxes are an example of state and local wealth tax. Typically state wealth taxes are used to fund education and local infrastructure.
BTW, over 85 pct of national education is paid for by state and local taxes; not by the Federal government. National expenditures on education is about $1.2 trillion. More is being spent on education than the military. But the bulk of the cost of education is paid for with state and local wealth taxes.
So, we already have wealth taxes in the United States, just not at the Federal level.
Unfortunately those state and local wealth taxes have lowered Federal tax revenue because of SALT deductions. State and local wealth taxes are deductable for Federal income taxes; the SALT deduction protects income from Federal taxation which mostly benefits the wealthy who pay more state and local wealth taxes. Limiting or eliminating SALT deductions would make the state and local wealth taxes a true wealth tax rather than a Federal tax dodge.
Elizabeth Warren's idea is actually superfluous. Eliminating the state and local wealth tax dodge through SALT deductions accomplishes the same thing. State and local government already have laws and mechanisms in place to tax wealth. There isn't a need to establish some sort of new tax scheme at the Federal level. State and local wealth taxes shouldn't allow the wealthy to hide income from Federal taxation.