There’s nothing incentivizing about a tax. It’s a threat, not a bonus. Also, it punishes earnings because it says that people are compelled to use earnings at an accelerated schedule rather than having the freedom to schedule the use of earnings as they see fit. If you want to show me where you’ve argued “large concentrations of wealth” is a social cost, go for it. I’m also waiting for your objective definition of “massive”.
i’ve read this about six times and it is still almost completely incoherent to me. Perhaps i’m just not intelligent enough to grasp it, but somehow i doubt that’s the problem.
If you can’t make fun of something, then it’s probably not worth taking seriously.
If you write off a legitimate point simply because the way it is conveyed offends your sensibilities then you are being dismissive.
i don’t disregard ideas because they are abstractions, but i do tend to disregard them when they are incorrect or don’t make sense, i admit.
i respect some ideas and not others. Does the fact that i don’t respect incorrect ideas make me immature?
The subject-object dichotomy includes whether or not something is particular or universal.
When we say something is “subjective”, that means something is contingent upon the particular judgment taken.
In the case of taxing savings, we’re discriminating against particular judgments which adhere to long term savings schedules, towards particular judgments which adhere to short term savings schedules.
That is short terms savings schedules become authorized to judge long term savings schedules despite how long term savings schedules don’t consent to short term authorship.
Just because you say so doesn’t make it true.
Why are you contradicting yourself? It’s like you’re deliberately trying to not make sense. Fun and seriousness are diametrically opposed.
Why are you focusing on the possibility of incorrectness instead of the necessity of ideas in themselves?
There’s a difference between the sum of individual net worths, and the net worth of the country as a whole. The sum of the individual net worths will account for individual liabilities, but will not include national liabilities like interest payments on national debt. The net worth of the nation as a nation will include those national liabilities. The distinction makes all the difference when we’re talking about taxes, since the whole reason we have taxes is to cover national liabilities. And it’s especially important when we’re talking about wealth taxes, since the sum of individual net worths is the very national asset we’re taxing to cover liabilities!
This is semantic. You pay income taxes every year, it doesn’t make a difference if it comes directly out of your paycheck or makes a brief stopover in you bank account. In both cases, people will need to compute their tax liability every year. The difference is just how it’s calculated. And as I said, just as is the case now with income tax, very low-wealth people could be tax exempt. We try to do this now, we just use the poor proxy of low income as a substitute for poverty, but a billionaire who works at Deny’s will pay the same low taxes as the struggling single mother working beside him.
More costly, yes. But the expected returns from a well-diversified portfolio are in the range of 8%, so the expected return is still positive, even assuming 5% (which I still think is higher than it needs to be). Moreover, since there is no income tax, the average person has more money, so even though they’re earning a lower return, they’re able to invest more. I would expect the total dollar return for the average individual to remain the same, but I have not done the math. It will depend, I think, on my earlier claim that the average person will pay the same dollar amount in taxes.
Also, it’s arguable that stock returns would be better on average. Since corporate taxes would be shifted back to the owners of those corporations, the corporations themselves would see a larger profit. They would be wise to put some of that towards dividends, to offset the increased cost of ownership.
I don’t know why this would be a benefit to income taxes. A big part of the reason that the recession happened as it did, and what will be a big part of the reason for the next recession, is that there were no consequences to placing foolish bets in the market. Why should the public subsidize poor decision making by stock buyers?
Sure there is. First, incentives can be negative; taxes on anything are a negative incentive on that thing. Moreover, as Phyllo points out, taxing savings encourages spending, or is an incentive for spending.
No. That’s a threat. It’s like saying someone sticking a gun in your face to do something is an incentive. (Even literally, that’s how taxes work. You either pay them or you go to jail and get your assets taken away. If you defend yourself, you get shot.)
If you want to claim that incentives can be negative, then it defeats the purpose of the word.
I’m not denying that. My entire point is that it’s immaturely functionalist in discriminating against long term savings schedules.
If I’m irresponsible in the moment and you’re responsible over time, it would contradict your responsibility to expect you to afford my irresponsibility.
That’s just another way of saying people with lots of money but not much income are obviously not going to like it if Carleas’ plan were put into effect. But if the plan works in acheiving its stated objectives, then i’m not sure the feelings of people with lots of money but not much income really outweigh the benefits the plan might have for society as a whole.
It’s rare that every tax payer entirely concurs with the government’s tax policies, but they still have to pay taxes. That’s really just the way authority works, those subject to the authority are not going to consent to everything that authority does. If everybody agreed with the authorities on everything, that authority would be obsolete/redundant.
No they aren’t necessarily. And i’m not contradicting myself - if something is worthy of being seriously considered, then it can also be worthy of jokes. That’s why Mel Brooks is so funny when he parodies the holocaust or the Spanish inquisition. He’s not dismissing or disrespecting them, but he is quite literally making fun of them.
Because bad ideas can cause the world a lot of grief.
What I’m talking about is people’s sense of time. Estate taxes discriminate against those who care about the future.
That’s mob justice.
Not really. His productions are disturbing in that they come at the expense of someone else’s dignity. Literally, people are being made fun of.
Those being made fun of are serious. Again, fun and seriousness are diametrically opposed.
How is “badness” defined without regard to the integrity of ideas in themselves?
It sounds like you’re being a pragmatist who’s carrying out witch-hunts against the weird, expecting people to conform to authority without consent.
Hello Carleas,
— I propose a revenue-neutral tax shift from income to wealth. Rather than pay a percentage of their income, determined by the size of their income, individuals should pay a percentage of their wealth determined by the size of their wealth every year.
The tax would be fairer, because the burden would not fall on those who earned a lot, but those who had a lot. A billionaire who ‘comes from money’ will owe little in income tax, even though she could afford to pay a significant amount; conversely, a young entrepreneur pulling herself out of poverty may earn quite a lot, but have significant debt or family obligations that make her actual ability to eat the cost of taxes quite low. Shifting to a wealth tax will make it much harder for the idle rich, and much easier for the upwardly mobile. Both seem like net social positives.
O- Except that it is an attack on a section of your voting population. Already you bring a moral prejudice to what should be a reasoned argument. We should reward success, entrepeneurship, risk-taking. We should encourage investment of capital, or as you put it “wealth”. Without such consecions on capital you may lose the ability of others to remain “upwardly mobile”.
Wealth is also not easily defined. The yatch, the beach house? Givens, but that accounts for a small percentage that, even if heavily taxed, could not make up the loss of revenue tax. The value of such things is not fixed either, while income dollars, more or less, have a determined value. If your system had been in place during the crash, the plight of the wealthy would have been passed right along to the govt, making it another victim and not a possible rescuer.
— A wealth tax also encourages people to use the money they do have wisely. Properly applied, a wealth tax should include the value of investments as ‘wealth’, but since sitting on cash is likely to lead to a loss of money, people are incentivized to move their savings into investments whose returns will offset the loss from taxes.
O- Doubt it. basically any investment would mean risk for me and none for the government, who will nonetheless enjoy the fruits of my saga. That is unfair. Why should I risk my money. If anything I will risk hiding my money, since then, while I see no increases for me, there is no loss of wealth to the taxman. Sitting on cash will not necessarily mean loss of money, while increase wealth will be.
I think that the broader issue is the increase of government oversight, reach and power. The state you are describing is nothing short of big brother. You depart from a negative assessment on wealth. I don’t see an argument here for this at all. Why should the roads we all use be paid only by the wealth of a few? Wealth does not strip a person of their basic rights and this seems to be a dissimilar approach to an individual, thus a discrimination against an individual based on wealth. To me it seems fair that tax should be a percentage of an individual’s assets. Make it 15%, for sake of argument. The burden here would be the same but not the contribution. That is fair.
Wealth should not be penalized because, in the end, it should be the goal. Wealth is not something we simply are born into. It is the result of someone’s work, genius, dexterity, foresight, and risk. It should be the person’s right to do as she sees fit and not the prerrogative of a govt that did not earn it. If you do tax it, as you propose, then we offer less incentive to bring and keep the best and brightest from the world. If you want to encourage the movement of wealth…well, you get more with honey than with vinegar, and that means giving tax breaks on philantrophic contributions, donations and community investment. Invite the wealthy to do what you ONLY HOPE the govt will do with the wealth they repossess.
No, it discriminates against those who prefer to save large amounts of money - and Red Lights discriminate against people who prefer not to stop. The fact is, i think most everybody cares about the future in one sense or another.
Well, if we’re talking about a representative authority, then it’s more like democracy, which is sometimes similar to mob justice, but not the same thing.
Just because you say it doesn’t make it true 
i suppose it’s all a matter of taste
I’m not sure what you mean by “integrity of ideas in themselves” . . . There are good ideas, bad ideas, and everything in between. Yes, i discriminate between ideas - everybody does. And yes i’m a pragmatist. One of the ways i evaluate ideas is by how well they work - but i’m not on a witch hunt for anything, especially not the weird. People consent to be governed, and sometimes that will inevitably entail them having to take on obligations they would rather not take. That’s the nature of life under ANY government, even the most benevolent and fair.
No. A savings tax applies regardless of quantity, and greater quantities emphasize greater concern for the future.
How does public infrastructure compare with private savings?
No. Prove it.
…except there’s no representation without consent.
I’m not talking about opinion here. I’m talking how, literally, his productions are about the disturbance of characters.
The problem is pragmatism is subjective. What works for some doesn’t automatically work for everyone. You’re discriminating against those with weird judgment over the definition of what works.
Prove it.
That’s called principal-agent conflict.
My figure of US net worth (2009) of $75 trillion almost certainly does not include federal assets and liabilities.
Check out this article from December 2012:
aei-ideas.org/2012/12/u-s-ne … 2007-peak/
Net worth is difficult to calculate for an entire population but whether it is $65 or $75 trillion, it is not 3 times that figure ($202 trillion) which you want to use as a tax base.
It’s not semantic.
Let’s say a person earns $100K in a year and then nothing for the following 9 years.
Using income tax calculations(25% rate), he will pay tax in the first year but nothing in subsequent years so after 10 years he has $75K of the money earned.
Using wealth tax calculations (5% rate), he will pay tax in each of the 10 years. After 10 years, he will have $59,874 left. And he will keep paying until there is nothing left.
Very optimistic. What happens when there is 0% return or a negative return? The investor has to sell stock in order to pay the wealth tax.
It’s a benefit because tax payments are only required when revenue is generated …the investor has cash on hand to pay the tax and does not need to sell assets to raise cash.
Really? i don’t see how it’s infeasible that a savings tax might only be charged to people with savings over a certain amount. And how much a person has saved really reflects very little about how they see the future. All it means is they have money they haven’t spent yet. Maybe their gonna go blow it all on trip to Vegas next weekend or maybe they’re never gonna spend it and just pass it on to their kids. You can’t tell just by the fact that they have money in the bank. Maybe someone is in fact quite concerned with the future but has no savings because they don’t have enough money to save. It does not necessarily follow that people with lots of money saved care any more about the future than people who don’t.
It’s about how laws work. They discriminate against certain behaviors, whether it be the behavior of saving lots of money, or the behavior of running red lights.
Uhm, it’s basically self-evident that humans display and express concern for the future. That’s like if i said most people enjoy sex and you told me to prove it. i think if you are seriously asserting that people without savings don’t care about the future, then the burden of proof would be on you.
That’s not really how it works in a democracy - when someone gets elected, the electorate has consented to their leadership. Not always fair for those who voted against the person who gets elected, but, as they are in the minority, they are less representative of the electorate at large, and so they lose out. That’s life in a world where consensus determines leadership. Not everybody will be happy all the time. Oh well.
Most stories and productions center around disturbances to characters. The ones that don’t tend to be boring and pointless.
No i’m not, i accept that a weird judgment about what works might ultimately prove correct. Personally i think it’s weird that salt melts ice, but i acknowledge that it works. Now, if someone’s judgment is that a sieve works for transporting water, then yes i will discriminate against them, because they are wrong.
Are you suggesting that no one consents to be governed? Because all i have to do to prove it is provide an example, which i can do quite easily by offering myself as exhibit A. And i think we both know full well that i am not alone.
Well, i call it a simple fact of life.
Then the purpose of the word hath been vanquished. I’m not making anything up when I say incentives can be negative, and I didn’t make up the term “negative incentive”. This tangent is semantic anyway, call it what you will, and focus on the substance.
Savings is self-recommending, and is a good idea even if the returns are diminished somewhat (and as I argued to Phyllo, they may not be). Moreover, if we maintain the progressive tax system we have, and change only the means of calculating tax liability, it wouldn’t be responsibility that would be punished, but accumulation. It would be like telling the ant that saving up for the winter is a reasonable thing to do, maybe even for several winters, but once you’ve saved up for more winters than you’re likely to see, your savings isn’t about being responsible.
Hi Omar. I hope you don’t mind, you made a number of points that need responding to, and in the interest of not responding line-by-line I’ve tried to digest you post into a few larger objections. Let me know if I’ve missed anything or mischaracterized your argument:
It was not my purpose here to argue in favor of progressive taxes. Most developed nations have some form of progressive taxation. I think there are good reasons for it (in particular, diminishing marginal value and the fact that some costs are fixed, both of which imply that a dollar is actually worth less to a wealthy person than to a poor person). But even if you aren’t convinced, it seems like a fair assumption that we should tax the wealthy more than the poor, given that we try to do so.
I’d rather not try to defend that proposition here, though, so perhaps there is a better way to go about the discussion: given that a flat tax is the fairest way to tax, should the tax be calculated based on income or wealth? Both imply certain value judgements, and both affect different groups differently (e.g., the idle rich would prefer a tax on income, and the upwardly mobile poor would prefer a tax on wealth). I’d be curious to know your thoughts on that comparison.
I don’t mean to take any position about where wealth comes from. Certainly some people get wealthy based on hard work and brilliance. But certainly others inherit wealth, or inherit cultural capital that makes the road to wealth significantly easier. No matter, the government needs to take some money out of the stores of personal wealth in order to pay for common goods. How that happens involves a lot value judgements and a lot of practical considerations. I don’t see the utility for the discussion in questioning any exercise of government prerogative.
I find the suggestion that government should offer targeted tax breaks to be at odds with your concerns about government prerogatives, Big Brother, and a ‘fair’ tax system of flat taxes. Minimizing government interference would mean minimizing the instances in which government effectively pays you to spend your money in certain ways. Targeted tax breaks are equivalent to government spending.
Moreover, it does not seem that we should expect the wealthy to spend their money in way which will reduce ascription (which will benefit their children). That would be irrational. And blanket tax breaks for anything that can be described as “philanthropic” will probably result in a lot of ballets and art museums getting funded, the proceeds and benefits from which will never flow to the urban poor.
If wealthy people want to give money, they still can. Indeed, they’re encouraged to by a wealth tax, since doing so will reduce their liability. But for the same reason that we don’t let people decide where their taxes will be spent, it is ineffective to substitute philanthropic giving for tax-funded programs.
Wealth is difficult to define, but I think you understate the extent to which income is similarly slippery. First, if the value of the dollar tanks, the real value of income also tanks, while the value of things like a house or a stock might rise to compensate, maintaining the same real value. Furthermore, stocks, insurance policies, and other perks from jobs have to be tallied among income. The use of a company car or a company-owned condo must be included in income; indeed, virtually anything that needs to be appraised as personal wealth can also be earned as part of a benefits package, and in both cases they would need to be taxed.
As to how the tax base changes during a crash, could you say more about why a wealth tax has worse effects? The tax base made up of the working class dropped substantially during the crash, as the unemployment rate increased, and many of those who kept their jobs had their salaries cut. Moreover, since negative returns on investment are written off, the wealthy’s liability similarly decreased. My guess is that the real effect of the crisis would be roughly the same, regardless the tax system.
This is true, but as I argued above, the world is moving away from cash, so hiding cash under ones mattress is getting very difficult. Moreover, making declarations of wealth binding in court would make stashing any sizable amount of wealth undesirable: it couldn’t be used as collateral on a loan, it couldn’t be reported if stolen, and most of all it would sit in squallor while the market rose. Over the long term, cash is a losing investment, and that is likely to remain true with a wealth tax (especially if I am right that returns on investment would increase proportionally in response to the change).
Yes. But it is wrong to think that this proposal is all that different from the state we actually have. The cashless society is coming, it’s cheaper and more efficient, it’s easier to regulate and measure, it’s easier to administer and police. I rarely carry cash, I rarely interact with cash, I rarely make a transaction that isn’t immediately recorded in several computers. The wealth tax doesn’t make a state of government oversight possible, it leverage the state of government oversight we’re living in for a beneficial change in tax policy.
Look again at your own source for original figure. It lists as the total assets of “Households and non-profits” as $73.5 trillion. It further lists the assets of “Corporate businesses,” “Other businesses,” and “Financial businesses” as $30 trillion, $13 trillion, and $67.6 trillion, respectively. The $202 trillion figure included “Foreign investors,” which I was wrong to include, but we’re still left with a total asset base of ~$180 trillion.
I’ll grant what I think is the gist of this hypothetical (about which I’ll say more in a minute), but when I said it was semantic, I was responding to it being characterized being “paid once” vs. being “paid repeatedly every year.” All that your hypothetical shows is that if you change the basis liability, you will change what a person owes in taxes. If a person has a net worth of S100k, and then spends all her money, she will go from owing $5k to owing nothing. Taxes are assessed, on everyone, every year. If the basis of liability, no matter how it’s calculated, is zero, then you will owe zero taxes. But you are still personally liable for your assessed taxes each year.
As to the 0-income individual owing taxes, why shouldn’t she? Does she not use the roads? Is she not protected by the police and the fire department? Is he country not protected by the military? If someone earns a bunch of money and then decides to sit around, it does not seem that they are any less benefiting from the protection of government or from the public goods it ensures. Someone with $100k being reduced to $60k in ten years should not be alarming, the cost of living basically anywhere is much greater than that. And if we still find it problematic, it’s an easy matter, as I’ve argued, to determine the percentage of liability based on wealth, so that the rate would fall from 5% to 4% to 3% to nothing, or what have you.
What about the CEO who accepts no salary, but is paid in stock options? What about the nanny who is paid in room and board? Either of these individuals will still owe taxes, and will not have been given cash on hand to pay the tax. What about someone who is paid as an outside consultant, so that no taxes are assessed at the time they’re paid, and who invests all the money in their business? They will too will need to sell of assets or take out a loan to pay their taxes.
Will a wealth tax penalize anyone who does not plan for paying their taxes, or who has no cash on hand for whatever reason at the time they’re taxes are due? Yes. Is the same true of an income tax? Yes.
That’s a possibility, not a necessity.
I didn’t say how far into the future or in which way they care.
Laws work because they’re autonomously idealized first, mutually agreed upon second.
No.
(I don’t think you know what self-evident means either. Just because you and I care about the future doesn’t mean everyone does.)
No. Burden of proof is on the affirmative. Appeals to absurdity are subjective.
Then democracy is broken. It dismisses freedom of assembly, rights to privacy, methodological individualism, etc.
One, prove it.
Two, then most stories and productions don’t take serious things appropriately.
That’s your opinion. (Some people like serenity and tranquility. It cultivates creative thinking [and actually helps people learn how to flirt]).
I’m saying people don’t necessarily consent to be governed. Again, you’re getting the necessity-possibility dichotomy confused.
I call it recognizing we don’t just live, but live in society which is an idea dependent on abstract reason. We don’t enslave some people’s abstract reason to others’ just because others say so.
I think that you are double counting here. Publicly traded corporations are already counted as assets of the person who owns the stock. Privately held corporations would get added to the asset pool. Financial institutions hold properties, deposits and promissory notes on loans. The properties would be added. The deposits are already counted in household net worth. I think that the loans cancel out because the borrower got an asset in exchange for the loan. - I’d have to think about a bit more.
Retirees and the unemployed, who own property, also use these services and in a prior post you wanted to exempt them or give them a lower rate. And why should a billionaire pay more to use the same road as a slacker?
You mean that they won’t pass the savings on to the consumers and lower their prices? They might (or not) give a benefit to the shareholders?
Sounds like the weasel corporations we know and love.
I did focus. You ignored what I said about threats.
The problem is the definition of “likely” is subjective. It’s up to the individual saver to decide what risk to assume in judging how long one will live.
People also don’t necessarily save for retirement. People also save for investments, and they save to pass down an estate to future generations.
Regardless, it’s an obvious, pragmatic remedy to the problem.
You said that the size of a person’s savings indicates how much concern they have for the future. That is not necessarily true.
i’m not sure what this means.
Yes.
Everybody plans, everybody prepares, everybody attempts to predict what is coming, that demonstrates a near universal concern for the future.
Whatever. You made a dubious assertion. i will continue to doubt it unless and until you can prove it (which i don’t expect you will be able to do).
No democracy is not broken, it’s simply not a panacea. It’s the least of all possible evils, but far from perfect.
No. Just go read some novels and watch some movies.
Maybe there are differing standards of seriousness.
i like serenity and tranquility, but that’s not why i partake of stories.
i am aware that some people don’t consent to be governed, i was not denying that such people exist.
Not all abstract reasoning is created equal.
No, it’s not, and pragmatism is subjective.
I didn’t say how much. I said greater. That’s a generic quality, not a specific quantity.
Ceteris paribus.
It means laws don’t spawn out of nothing. People think them up, and then people agree on them.
If we discriminate on a utilitarian basis, then we’re prioritizing some styles of thoughtfulness before others.
Prove it.
What assertion?
That’s what it means to be broken. You’re forcing people to assume the risk of falling through the cracks such that everyone isn’t treated fairly. The lesser of evils is still evil.
Personal attack?
(I’ve read and watched plenty of plots. You don’t need negative disturbances in order to have positive entertainment. A protagonist can pursue a goal and develop in the process rather than overcoming obstacles to solve a problem. Protagonists don’t need to have antagonists either.)
That’s your opinion.
You said “People consent to be governed”.
Yes it is. It’s the results of reasoning that makes the difference. Reasoning itself is just a faculty, not the exercise of that faculty.
(You said “created” so I’m assuming you meant the noun, not the verb.)
That may be right. Corporate assets would already be priced into stocks, and ownership of stock is likely included in net worth. Corporate tax liability would be priced in too, but I don’t think it would change much if that liability were passed on to individuals; the tax base would increase, but the individual tax rate would have to increase to compensate. In that case, the source that that wiki article relies on to establish gross assets may be wrong. I tried to look into the basis for the numbers, but I quickly got out of my depth.
Here’s another important question: is individual tax liability is included in these numbers?
A billionaire retiree would pay more than an employed but broke young man, as would an unemployed trust-funder. That is the opposite of how it works now. Even if I were to agree that the wealthy should pay exactly as much in taxes as the poor, it definitely shouldn’t be the case that the working poor pay more in taxes than the idle rich, but an income tax does that.
There are a lot of reasons to be outraged at taxes, but what matters here is the outrageous differences between income tax and wealth tax. Wealth tax falls most heavily on those who have lots of money. Income tax falls most heavily on those who earn lots of money. The latter seems more outrageous to me.