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.
Ok Daktoria, this conversation has reached the point of silliness. With all due respect - simply saying “No, it’s not” and “Prove it” is not argumentation - and i say that as advice, not a personal attack. In any case, we are hopelessly off topic relative to the OP, so i will respond to a few of the points you have made and then exit the thread.
Of course. Which is precisely what we should be doing. Not all ways of thinking are equal.
The assertion that how much money a person has saved reflects how much they are concerned with the future.
Life is unfair. That’s not my fault, it’s not pragmatism’s fault, it’s not democracy’s fault. Blame God or the universe if you must blame something.
Not a personal attack at all, if you have read many stories or watched many films you will be aware that protagonists struggling with obstacles in pursuit of a goal, or grappling with antagonists, are at the basis of most. You can deny it, but you will be wrong. i have no interest in trying to prove to you what is already obvious and well-established.
i was not referring to every person. i was referring to people who, in fact, consent to be governed. Like if i said, “People put ketchup on hamburgers”, i don’t mean every person in the world puts ketchup on hamburgers . . .
That’s a pragmatic way of looking at it, well done.
Tax isn’t a liability. It’s not part of the net worth equation. Debt is a liability.
Before a tax payment is due or before you get the tax bill, there is no entry for it in liabilities.
When you get the bill but have not yet paid it, it becomes a liability in the ‘Accounts Payable’ account. At that point it has become a debt.
When you pay the bill, cash from the ‘Bank’ account are applied to ‘Accounts Payable’.
So it’s only a liability for the short time that you are holding onto an invoice/bill.
The biggest problem with the income tax system is that there are so many loopholes, that a wealthy person can avoid paying a fair share of taxes. And there is no political will to close those loopholes.
The other ‘problem’ is a consequence of capitalism itself - when you are wealthy it is easy to make money without doing work. Simply investing the money in stocks and bonds will produce a return. The ‘excess’ money gives you a considerable advantage over those who don’t have money to invest.
Hello Carleas,
— 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.
O- The ideal is to tax fairly. Taxating, even progressively INCOME, remains closer to the ideal as the field of taxation is equal. When you tax wealth you enter into another realm and it can get ugly. Not only that but it is an irrational process, as “wealth” is relative. A percentage of your income is not.
— 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.
O- The “idle” rich (already there seems to be a prejudice)…who are they? Are we talking about nobility in america? A person that has wealth, let’s say Romney, might not have to go to work. This does not mean that they have no income. They have investments that yield returns and these could be considered taxable “income” (as they are currently or with changes). Anything that increases your money is income. That is the most rational tax. It is the preferred tax, also, because it allows your country to keep it’s wealth. Wealth is the goal, not the redistribution of wealth through the hands of government.
Suppose you tax the wealth of the rich, as you guess, they won’t like it. There are ways in which that wealth can disappear from our shores or certainly from the taxman radar.
They can renounce their citizenship, count their loses, whatever they may be, and flee this sort of communism as they did in Cuba. Once the wealth acquired by the govt is redistributed, used up, who is the govt going to shake to pay it’s wages and plans? How do you invite capital to initiate ventures in your country if wealth is taxable?
Wealth can be “translated” into gifts. Will your tax code tax gifts, like gold and diamonds? Every year or at the time of purchase? Either way, while electronic transactions, such as income, can be traced by the taxman, diamonds can hide a huge amount of wealth and then all you have to do is “lose them”.
— 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.
O- The issue is not the abolition of govt prerogative but the prevention of it’s degenation. Man is not born wealthy. If you inherit wealth then that means that either your father or grandfather or some other combination, going back X amount of generations, accomplished something significant either over time or in a flash. It should be the individual who earned it that makes the decision on whom to leave it to. Shall your taxman cease to honor a wealthy man’s will?
Secondly, wealth, without capacity simply leads to a shrinking return on wealth until it disappears. If you just live idly on inheritances, eventually you will eat your way through it. On the other hand capacity, even without wealth (but assistance) eventually translates to wealth. In other words: “Give a man a fish and he eats for a day. Give a man a fishing pole and teach him how to fish and he will eat for a lifetime.”
— 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.
O- That is to suggest that govt owes me and what I don’t “give” is actually what I have been given. My wealth, my income is govt’s, and what I keep, through tax concesions, is actually a handout. I reject that and I don’t even see the need for producing an argument here because I cannot believe that a normal person would believe such a thing- that a dollar I don’t pay in taxes is a dollar I “earned” from the govt. NO. My income is what I have already earned through the hours I have put in at work. Govt can make an argument on why I should pitch in to pay for common goods, like roads, education, military, and I agree that we all should contribute. But what I keep is not what I earned from govt but what I already earned myself.
Now, what you might be saying is the argument that the Bush taxbreaks negated the normal “revenue” of the state, without reducing the cost of govt, thus making it another expenditure by govt. That is mismanagement of govt and not a necessity.
— 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.
O- That should be their prerogative, not the state’s.
— 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.
O- So will your govt fund ballets and art museums or will it burn books instead? It worries me that you consider such things superfluous. Museums and ballets create revenue, create jobs, reduce the urban poor. Best thing that can happen to run-down part of town where the urban poor struggle is the opening of anything that will bring in tourists and afficionados to it’s streets. Over time the value of their property increases, investment moves in creating jobs.
— 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.
O- One, what would be the point? If govt taxes wealth there would be no guilt left associated with wealth, a sense of responsibility, which would be assumed by the taxman. Secondly, if I give charity simply to reduce my taxable wealth-print then it ceases to be charity and becomes naked-self-interest. Is that something we want? Third, I don’t know about you, but here in Florida, Miami-Dade county we vote on how our tax-payer money is used. I am not saying that we vote on every possible use of the state’s budget, but that doesn’t mean that we have no say on how it is used at all. It is not an absolute. It is representative govt, ideally for the people and by the people.
— 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.
O- The value of a currency like the dollar is quite stable if for no other reason than the size of our economy. During the crisis the value of the dollar dropped against the euro and other currencies but while for most income remained the same amount, they were able to pay for services and food normally. Houses however lost sometimes 100K in value. It didn’t enhance wealth but decreased it radically. When jobs were lost the negative value on the houses did not help their owners, thus foreclosures or short sales ensued, flooding even more the housing market and taking more “wealth” out of “wealthy” people. People moved to other states, income while reduced, still existed, but real state wealth was lost.
— 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.
O- No they don’t. Why should they be? I see no argument. Offering stocks and other perks may be seen as necessities taken by an employer to attract or retain the best and brightest. The company car, the company apartment are the company’s, not the employee, so why would you tax for what they do not own?
— 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.
O- Perhaps. Wealth and jobs decreased, but I think that the loss of 100K in house value over that time would have reduced the govt revenue more because it will take much longer (according to some projections) to regain that loss than for most to regain their income. Unemployment is back under control and yet the housing market, while recovering has not regained the wealth that could then be taxable. In other words, an income taxation would have recovered by now while a wealth taxation syst would be dealing with write offs from banks and from the former homeowners for years to come.
— 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
O- If you have cash, to the point that you are considered wealthy, then why you need a loan for? If govt ask where you got the money, you can say that it was a gift from your family.
— it couldn’t be reported if stolen
O- Neither if “stolen” (taxed) by the taxman.
— and most of all it would sit in squallor while the market rose.
O- Or crashed…
— Over the long term, cash is a losing investment
O- Not as much as wealth…
— 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).
O- Doubt it. Why would they increase? Why wouldn’t they instead decrease?
It’s certainly a liability for me. After earning a bunch of money, you know that you will owe a certain amount of taxes on it. That knowledge will certainly affect your appraisal of your own worth and your own access to money, why shouldn’t it be taken into account? If you know you owe 25% of $100k, you know you can’t afford an $80k yaught.
Is your position on this from any of the sources you provide? I couldn’t get much out of the sources of that wiki article about how exactly individual net worth was computed.
I agree with both statements. I’d much rather see the closing of most tax loopholes than the implementation of a wealth tax, since a wealth tax would be just as shitty as our current system if it exempted things the way our income tax system does. I also agree that investment makes it easier to keep money than to make money. I would like to see the elimination of the special tax status of capital gains, since I don’t think earning money in the market is “[not] doing work” or that it needs special consideration. It seems to just be a huge tax write off for the rich. And really, if capital gains were taxed the same way other income is, I think there would no real reason to keep increasing taxes on very high incomes; broaden the base, lower the rate.
Right, but we’re both coming at this with value judgements about what that means. You think fairness is in equality, right? But you have to agree that it would be absurd to divide the spending liabilities of the US by the population and assess a flat fee to every man, woman, and child, right? Because many, if not most, of the people could not afford it, and even a minimal form of government will provide services like police and courts of law to those who couldn’t afford to pay for them. Moreover, while you assert that “‘wealth’ is relative”, would you deny that you can pay two bums $50 to fight on camera, while $50 million would likely not entice your average CEO? Because wealth is relative, so is income; how could it be otherwise?
A big part of what government does is protect property. If that’s true, then people should pay for government in proportion to their property. To me, that is taxing fairly.
Let us be clear: we’re not talking about taxes generally, we’re talking about targeted tax breaks, i.e. situations in which you would owe some money but for a decision by government to decrease the burden in exchange for some action, e.g. philanthropic donations. In that case, they function exactly like government spending, you yourself acknowledge that they function as an incentive, and it makes absolutely no difference if the money ends up with you because your taxes are reduced or because you gave the money to the government and they gave it back to you. A ritual exchange of money doesn’t make it any more spending-y.
If I owe a friend $10 and win $5 in a bet, I now owe him five, and he has effectively paid me. What normal person could believe otherwise?
Does this question really exhaust the options? I’d say neither, but spending priorities are not relevant to the structure of the taxation that will pay for them. My point in bringing up e.g. ballet is that philanthropy cannot be treated as a substitute for government spending. If you like ballet, then replace ballet with some thing that is philanthropic but which you think would be a waste of taxpayer dollars. I’m sure there’s something.
I wasn’t even the one who suggested tax breaks for charity! You said your last post, “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.” You advocated for a tax structure that would provide incentives for the wealthy to give to charity, i.e. a little “honey” (read: “naked-self-interest”).
Well, they are taxed. And any part of a compensation package, including salary, can be described as a “necessit[y] taken by an employer to attract or retain the best and brightest.”
What if instead of paying you in cash, a company paid you in AcmeBucks, and any time you wanted to buy something they bought it for you and deducted the equivalent cost from your store of AcmeBucks. You technically earn no income, and yet you have everything you need paid for. Obviously, this shouldn’t be allowed. Neither should diverting some amount of a salary into in kind benefits. That’s why they are taxed, that’s why they should be taxed.
But also note that one of the government’s responses to the crisis was to cut taxes and issue stimulus payments. Smarter people than I are under the impression that a good way to combat a crisis is to borrow rather than tax to pay for government services (though some other smart people disagree with them). If wealth generally decreases in a recession, it’s effectively the same as government cutting taxes and returning money (though not the same as direct government spending, which was arguably a valuable part of the stimulus package (it was certainly a major part of it)).
I only mean to say that you would significantly limited. You couldn’t use a credit card or bank, because they report the movement of funds to the government. You could make up a person that gave you the money, but they would also have to be living a constrained life, or the government could tell that they didn’t in fact give you the money. You couldn’t make a large purchase: a house, a car, a business, tuition, medical expenses, all would leave a paper trail that would require explaining. I’m not saying it’s impossible, I’m just saying it would be hard.
And not because of anything the government would need to do different from what it does now: People currently evade taxes, and the government compares records to catch them. The system isn’t perfect, but it is better now than it was 50 years ago, and no matter what system we have in 50 years, you can be it will be a lot better at catching tax evaders.
I’m not certain of this claim, but my thinking is this:
First, if corporate taxes are reduced, corporations have more money, meaning they either pay their workers more, pay their owners more, or reduce the price of their wares. While I’m not as cynical as Phyllo seems to be, I think at least some of that reduction would be put towards owners, because companies raise capital based on their stock price, and it’s important to keep it high. If the return on investment in any company is effectively decreased, companies have an incentive to increase the return on investment to maintain the same equilibrium.
A couple other factors would probably play a part. First, people would likely spend more money. In the short term at least, that would increase profits and liquidity, and thus stock yield. More spending would also mean less investment capital to go around, so returns on the investment capital that remained would increase to encourage more investing.
More generally, though, I think that a wealth tax would not change behavior substantially enough to affect the effective returns on stock. The prices that exist today represent market equilibria where the people that find the things worth buying and those who find them worth selling are about even. My impression is that over the long term, any shift in how taxes are collected (not including targeted tax breaks) would return things to substantially similar equilibria, given that the tax is revenue-neutral and roughly approximates the tax burden that people face today (which it would; in the US, the tax burden is relatively evenly distributed by wealth, even though there are much, much higher taxes on large incomes).
You can do that. It can be listed as a ‘current liability’. It’s probably not commonly done because income tax is hard to calculate and income tax is often withheld by employers as part of the payroll process. What you describe is more like creating a budget rather than getting a statement of net worth.
This is what commonly appears on balance sheets. I only see tax listed for public companies. :
Boss, if you can’t conduct yourself with manners or respect due process, the substance of what you have to say is irrelevant.
Just because you claim something doesn’t make it so. You need to validate it with reason in order to prove why it’s necessary. I’m not even asking for empirical evidence here. I’m just asking for why your ideas are well-founded.
I concede the point. Let me take a couple steps back, and concede for the sake of argument that the tax rate necessary will be 5% or higher.
Is it not the case that the average tax payer probably pays that or more already? The argument goes like this:
We’ve assumed for simplicity that this tax will be revenue-neutral, so we’re collecting the same total amount of taxes. Whatever the average payment from a member of the tax base, that amount times the size of the tax base is equal to the total. Whether we’re applying a wealth tax or an income tax, the average payment x number of payments = the total. The toal is the same, so if the number of payments stays the same, the dollar amount of the average payment stays the same.
We can’t assume that the people who are subject to a wealth tax are the same as the people who are subject to an income tax (indeed, I’ve argued that’s part of the appeal). However, since we’re comparing tax systems, we’re not talking about the actual tax base, but the hypothetical tax base: who could be paying taxes? And for either the income tax or the wealth tax, that set will be the same. That means that the average payment will be the same across that set. Thus, the average payment will be the same percentage of the average wealth.
Americans don’t need a revenue-neutral tax … they need to increase taxation because they don’t collect enough tax to cover expenses. Their problems will grow unless they get the courage to look at the situation realistically.
Sorry, I meant ‘revenue-neutral’ with with respect to the change from income tax to wealth tax. That is, collect the same amount of tax, just assess liability differently. I don’t know if we need to collect more taxes, I don’t think national debt is as bad as it’s made out to be, but that is a different discussion.
I don’t think any tax that doesn’t limit it’s own potential revenue gain can be just. If a tax takes X% of the GPD this year, but can simply be raised to 2X% next year because we need more tanks or more welfare or more whatever, it’s an inherently unjust tax regardless of who you’re taking it from or under what pretext. I’ve basically decided that tax issues are uninteresting to me until the Gov’t. is willing to actually set a budget and live by it. It’s absolutely incoherent to talk about who should pay what and how much if there’s no target figure to reach.
Like for example, this wealth tax- even if it was a great thing and a fair thing, there’s currently nothing stopping the U.S. from simply implementing it on top of all the taxes they currently levy, or starting off with just a wealth tax, then adding more later whenever they feel like it. If 40% of everything you make is your ‘fair share’ now, but if the Government wants 55% next year that suddenly becomes ‘fair’, how can you even have a conversation?
Unfortunately, as with most of the philosophical endeavor, this discussion has to take place in a world that will never exist. We will never live in a world where the question is simply one of switching from an income tax to a wealth tax; we’ll always also have to wrestle with questions of the total level of taxes, the total level of government spending, the ratio of different forms of tax, the exemptions that we’ll offer to people below a certain age or above a certain age or who own their house or rent, etc. etc. But that doesn’t mean individual tax decisions can’t be usefully analyzed apart from all that. Talking about the wealth tax, we may determine that it is better or worse than income tax no matter what the level of total taxation, or even that whether it’s better or worse form of taxation depends on the answers to several other questions, including the total level of taxation.
And there is a real possibility that new taxes will be levied. Now, we might agree that increasing the overall rate of taxation is a bad thing, but given that taxes will be raised, there’s still ground to be won in making that tax the best kind of tax. Even though I don’t really want my fingers broken, I do care whether the broken fingers are on my right or my left hand.
In that spirit, it seems to me that some kind of flat tax is the most fair- if taxes are something that we vote on, then it's only just if all voters (or as many as possible) are equally burdened by a tax they vote for. Anything else, and you're getting a classic example of why the Greeks didn't like democracy. That said, I've no problem off the top of my head with taxing wealth as opposed to income..I'm vaguely worried about such a tax forcing people to keep more of their wealth liquid than they'd like (so they can pay the tax)- just taking it off the income seems like easier bookkeeping. But that's a pretty petty concern.
In 2012, the federal gov had revenue of $2.469 trillion and expenditures of $3.796 trillion. IOW, revenue was only 65% of expenditures. That’s no way to run household, business or country. It’s the road to disaster. There is no political will from the leadership or electorate to change. 
I followed this thread until midway through the second page where it got bogged down in statistics. It’s not that I can’t follow them, but rather that I don’t trust statistical thought, it always fucks you over in the end when you go to trust it.
My experiences in life general show this to be a fact. In China, people dodge tazes through hard to determine Luxury Goods, is it a bootleg Birkin or Kelly, a fake wedge from Prada, the jacket really from Paul Smith, a fake or the real thing? There is a entire IRS taskforce that does nothing else other than harass stores in the places I used to work in San Francisco when I was a security Guard… I worked in the most elite stores, and they all had tax evasion rings, ran by Asian Tongs, intimidating the staff into fear- wondering if the person looking at the stupid $40,000 dollar purse was buying for legitimate reasons or was hired to buy it for someone else. This is what the Chinese fixation of taxing wealth has produced… a entire industry of international gangs that hop international borders to buy goods from another country that was manufactured in yet another country so they can get the ‘authentic goods’ at more reasonable tax rates- instead of having a 300% luxury tax in China, they get a much lower tax here. This is especially frustrating, given most of these firms of French, and they have a fixation on special ultra-luxury items only sold to elites in certain parts of the world, so they get something ‘extra special’. This in turn gets even more fanatical tongs who specialize in this to literally go store by store planet earth over (I’m not exagerating this in the least, they show off their passports and brag to me where they were, and are going) in each of this brand’s name for that super special style and stamped piece.
It’s deeply sad… I know one nitwit from indonesia who has several million dollars in purses- but they look very similar to copies hand sewned on the streets sold to tourists for 30 bucks. I have a friend in Thailand who bouth two special editions ones for less…
In return, there is a second underground underground industry of ‘resellers’ that are not recognized by the industry for deeply obvious reasons- one the tax issue (no, these stores DON’T make money off the resellers, but it’s not a good topic to bring up if the IRS might be listening in a van) and second loosing business to them. Only customers ‘in the know’ know about them, and only because the staff lets them in on it once they bought enough items as ‘investments’. It’s harder to get into these specialty shops then underground bars during the prohibition- the people at the door know the exact texture, stitch (can usually tell who sewned them by name) and will simply not anwser if you ring not wearing the right stuff. It’s completely legal and legitimate- no different than a used clothes shop that people puruse looking for deals- but this stuff is no longer on the market, and it’s stuff that costs MORE than what it used to, because it’s vintage- and the recently wealthy don’t have vintage stuff because they were poor when it was vintage.
So there is this huge international trade network our of Shanghia, Beijing buying untraceable goods- and both the US government and Chinese government is obsessed with it, because that’s massive tax dollars missing from China, and if we can ever get them to enforce stuff on their end regarding our intellectual property, they have to trust us to do their work on their end. It’s mass chaos, and I’ll venture in saying only half of the goods sold ever was bought directly by the buyers. That’s the real currency of the world. You want a apartment complex to go up in Outer Mongolia, you gotta show them the goods… the wife knows, because the other wives know. You gotta have the right belts to be accepted, the right shoes, the right phone case. More than you can possibly imagine goes through these lines of transmission- it’s a unofficial world currency. I don’t think you quite comprehend just how much of the world turns by this- you think ‘it’s just a handful of shops in paris doing this, making these goods by hand’- but they are shops that sell to the top movers and shakers in our world. Not nation, world.
Your not taxing this. Even if you know what your looking for brand wise, your never certain if it’s fake or not. Yeah, sometimes the fakes are blantent- leather purses superimposed and inkjet printed on a canvas bag, or sewened by someone useing bad leather and no concept of technique… but alot of times, especially in the beginning, I couldn’t tell the difference. It’s something you only pick up on- yes, it would be the right technique- and even the right leather- but that style in that year never produced that exact size- if they did make that size, it would come out exactly as that- some very smart craftsmen around the world set up fake shops in western nations.
One time I even brought a craftsman into the downtown, upscale shops down in embarkadero showing him italian shops were selling french knockoffs for 20,000 grand. He was blown away- and he knew his stuff- worked it for decades (it’s on the otherside of chinatown from where we were, and we both were passing through, a three block diversion).
In the end- no… you don’t have a chance of taxing ‘wealth’ realistically- as the wealthy trade in alternative currencies based on nuances in the main currencies. Only the really wealthy know what those things really are- there are cues within and without that determine it’s authenticity. One of the items theives are most mad about are not the items itself, but the boxes they are sold in, or the specialty ribbons, or a printed card. It makes the bootlegs worth that much more… which is frustrating when your stockroom guy is careless and throws away boxes without ripping them up… people get paid to dig through the trash for that stuff. I knew one homeless guy in San Francisco who built a roof in the woods with the stuff… which was a relief, as we thought he was reselling it to the tongs… he didn’t realize how much money his cardboard roof was made of.
Another aspect of taxation is many tax collectors simply are fooled. My old boss in Hawaii was a expert at this- he was even jailed in Africa for a while for his hairbrained schemes. I was hired under confusing conditions, as a security guard in the boonies with a free place to stay for a few hours of work per day- the guy was supposedly running a farm. He paid his workers in cash and drugs- enough money to eat + a rock of coccaine. I was shocked to all hell when I found out, but I wasn’t hired to police the workers, and Hawaiians are generally a heavily addicted population- it wasn’t like every other farm wasn’t full of workers high as shit, just most of them paid in legal tender, and not drugs directly- but that’s how my boss was. I got free internet and utilities, and a free place to keep out theives and keep the tenants paying.
I didn’t realize until after a long while that the main facility wasn’t zoned correctly, and the fucker had a industrial complex where agriculture was supposed to be, and also made a illegal movie studio out in the middle of no where, with a half a million dollar server set up in a food processing plant hidden, and brought in a movie studio than made a TV Show I am very fond of… and then fucked them over and somehow bankrupted them, keeping all their equipment. Just about everything that guy owned was seized from others through fucking evil means, and he had 30 some cars- including a formula one racing car- but none of it was on his books. He didn’t have a title for most- it was people who ‘couldn’t pay their rent’ and had everything seized- but it was people who I now am thinking did infact pay and he just took it anyway.
Anyhoo- that guy gets arrested all the time, people try to kill his family with submachine guns, and one of his tenents running a illegal operation on the site tried to kill me, failed, tried to repeatedly assult me, failed, and finally I called the cops on him… he used the profits form this to buy a facotry in China- in Shanghai- and couldn’t get it working in China, and last I saw him he was trying to con some chinese into buying his worthless factory making shitty sheds that fall over- his property was strewened with fucked up examples of them- sometimes they came out right, but not usually. But the guy- he’s a ‘philantrophist’ because he employs the poor- he’s a farmer feeding the hungry, and he helps people in the third world by housing them. Everything is a scam, and he makes him absurd business run by mass brinbing both party politicians on the island so they will restrain and overlook the enterprise- and had the absurd desire to tell me of other people like him bribing politicians- the local politicians will accept bribes and get it past the muninciple levels, then the state even… but then they get bogged down in EPA and Federal regulations- from Americans and foreign investors, and they will get angry as fuck and demand the project gets approved or their money returned. In the end, it ends with the politicians having guys like me pimping automatic rifles.
I ended up getting myself fired when he kept trying to break me into his ‘deals’ as I was a ‘smart man’ into selling vehicles with no titles, and renting industrial space for propeties in addition to my security. It’s one thing to stay up and make sure people don’t steal batteries as a legitimate guard- it’s another to be the fall guy for that whole operation, all I sold for him were a few sinks, and gratefully accepted getting fired when his estranged son returned hom from the mainland out of the blue. It was a sweet gig, but it caused me to realize just how deeply corrupt our ability to correctly access statistical evidence is. I only found two farms in all the windward side of Oahu that actually grew food (not counting the poultry farms, there are quite a few- chickens eat for almost free in Hawaii and it’s easy harvesting eggs- I mean vegetables), but most of the land is zoned for agriculture. Well over 90 percent of the food in Hawaii is imported, and if a new pacific war breaks out, there will be mass starvation there- next to no foods worth scavenging for on Oahu, and the neighboring islands can’t support 900,000 mouths from Oahu’s population alone.
But- the land is subdivided- accessed with clever statistics. I assure you, there are clever people like Phyllo in Hawaii spouting our numbers. Just don’t expect me to beleive it. Yes- tax is being ‘extracted’ from the subdivisions. However, it’s not fair, balanced, or equitable. The automotive shops get hammered harder than the hiddle shops a few miles away. Hidden currencies, hidden trade, hidden wealth. This happened on a tiny, tiny, tiny Island with major financial issues, and a highly educated tax force.
Carleas plan rests on this:
The Tax Accessor being capable, and the Collectors competent and not corrupt. Your not going to have these two combinations in accurately accessing wealth. Our luxury goods that we’re attracted to evolved in our system to exploit this statistical understanding of taxmen who apply geometry and arthimetic to come to clever, ancient, time proven tax solutions. Our forms for taxing items over 10,000 dollars doesn’t do squat when it’s bought by a nameless frontman pimping a fake ID, or a cleaned up homeless man using a real ID, and then vanishes. Yes- government taxes at least 10,000 dollars- whoo hooo! Guess how much it’s sold for now? Guess what deal it’s given to grease over the wheels of a financial deal involving millions of dollars of resources?
No… computers and smart algorithms are not going to solve this one. No, emphasizing honesty and oath taking isn’t going to do it, or mandating stronger ethics be taught for MBAs. Giving Smears a extra course on honesty and integrity before he’s allowed to take the BAR Exam isn’t going to make him suddenly moral. The problem is deeply saddled at the roots of our system, and it’s not getting better for our tax collecting capacity.
Some aspects of wealth, such as your bank account kind- it’s useful- but it’s going to have the same negative effects as limiting primogeniture, which isn’t illegal in the US- families can still pass on the wealth that way- the Kennedies and Rockerfellers adapted the concept in collective decision making of family estates for example. Other families put individually inherited stocks into larger holdings that the individual still owns the part of. You can come up with alot of systems to get around this, not is it even desireable to eliminate this. Primogeniture is what allowed the mass collection of wealth to create the industrial revolution- banks play off a similar scheme, they amass wealth, and decide how to invest that wealth for certain clients (the money market, bind holding ones) over the average banking client- they guy doing automatic checking through a bank and using a credit/debit card. They bigger investors invest more, and they get hopefully larger returns. In return, the economy is invested in with larger and more complex schemes. It’s how we built the sky scrapers, it’s how we built our trade fleets, it’s how we get the food from the farms and the sea to our grocery stores. It’s deeply difficult, monolithic, and complex.
The goal is to tax productive wealth and NOT HARM IT. You gotta be a good steward to what is best to the survival of a state, a state in return is more likely to be a good state if it looks after it’s nation’s economic health as it’s top consideration. Merely changing from one set of statistical collection of goods to another isn’t going to do the trick, as that system is merely going to degenerate again, and likely this time more quickly, as the rich called our bluff a few hundred years ago when they started building up this scheme. We need to identify what it is in wealth we want to selectively target, and farm it- make more of it, and take a larger percentage of it while encouraging more of it to exist than before. Most importantly of all, we need to make certain what is wealth is what the wealthy- the truely wealthy- the mvoes and shakers making things happen for better or worst, is something they want to openly identify with.
Money is something the famous want to identify, because everyone wants more money, because we all need it. It’s a monocultural system from the bottom looking up, but top looking down it’s more diverse, and the rich have things we wouldn’t even occur to us is imporant, as it’s not even in our expected mindset. They form groups of acceptibility on this basis. Purses and shoes and watched and jackets and cars are deeply shitty reasons for declaring wealth and power- they are a joke at best, I can have the same stuff on the cheap. Isolated communities are another big joke, designer aethetics easily replicated is another.
RIght now- we need to identify what kind of wealth make taxation worthwhile, and figure out how to safeguard it, give it social and economic favor, encourage it, and raise people who possess it to higher positions over scamartists who are getting by on the fringes of advante guarde elitism, draining the living daylights out of the authenticity of the whole system.
In the end, if we don’t, were going to end up in a razor thin paradox like Oahu- importing literally everything and not producing squat. Most farms did stupid shit like gardening or florist boutiques. You can’t eat that shit. A society will starve under such conditions- it’s the main concern of the philosophical community in that state- will there be starvation? Meanwhile… all this other shit is going on with wealth.
Best of luck statistically finding your way out of that maze. I trust so and so amounts was extracted from the economy, but not that it’s accurate of where the wealth is, or of the harm-benifit threshold. Most taxation today is harmful because of where we sit on Ibn Khaldun-Laffer’s Curve. We tax more than the taxable accepts, and wealth is either hidden, or simply not created as the motivation to do so has dissapated. It takes a different kind of philosophy from the perspective of taxation, in legistaling, accessing, and collecting, to get back to the otherside. Merely relabeling what ‘wealth is’ isn’t good enough. Yes, it might be ‘easy’ to target bank accounts, but you’ll find bank accounts will get alot smaller once we start this. You’ll find our legal tender isn’t so useful in a idol-barter culture as is happening with out elites the world around collecting and showing off must have items you and I wouldn’t even recognize. Well, I might in many categories of Items, but you likely won’t.
Uccisore, a flat percentage tax will vary greatly depending on what we’re taking a percentage of. For example, the US has anything but a flat tax on income, but it works out to be pretty close to what a flat tax on wealth would be: the different quintiles of wealth distribution pay roughly the same share of the taxes as they own of the wealth. So a flat tax on wealth works looks like a progressive tax on income.
For collection, there’s no reason it couldn’t be collected from income based on the prior-year estimate of what the year’s tax will be, and then get a return or pay the difference at tax time. As I was arguing to Phyllo, I’d expect most people to see a similar rate of taxation to what they see now.
Phyllo, national debt and household debt function very differently. For one thing, a nation can print more money to pay off its debt. It’s also carried over a much longer period, and the government can default on it essentially whenever it wants, it’s only paying its debt because the diplomatic and trade consequences of not paying are worse; a household would basically cease to exist if it decided not to pay its debt (although we do allow that from time to time), but nations can default more liberally.
But for either a household or a nation, the downside of debt is overstated. Particularly where the US economy is currently strong, and its long term prospects have been good for nearly a century, taking on debt is wise. I’m personally going deeply into debt to pay for school, and that’s a smart decision if I expect the education to increase my marketability later enough to offset the costs of paying off the debt. I have a friend who buys stocks on margin, essentially taking out loans to pay for stocks, which he pays off when he sells the stock. If the return on investment is greater than the interest on the loans, then it’s free money (not accounting for risk). The US is a highly productive nation. Other countries, as well as individuals, choose to give the US their money because they think over the long term it’s a good bet. If we think that the US is likely to continue outproduce the rest of the world, it’s a good idea for the US to take on more debt.
CN, many of your criticisms seem to apply to all tax systems; it doesn’t sound like your boss paid income tax either. I’ve heard anecdotes like yours advanced as a justification for VAT or national sales taxes: they reduce the number of people that need to be policed (businesses instead of individuals), and they will tax even black-market goods, since all the money spent on them will be taxed when it is spent at a legitimate business. In any case, any tax system will leave shadows in which activity will go untouched, that’s true of virtually any law.
Another point you bring up is the international dimension of tax laws, that a luxury tax here would just increase sales somewhere else. That’s true, and its implications for the tax system are complex. It basically creates a game theory situation where there’s a race to the bottom to attract investment, but a countervailing incentive to have higher taxes to fund more government works (or line more bureaucrats’ pockets). It ends up that countries want the highest tax they can have that’s just barely lower than the tax of the next best place to do business.
There are really two questions then: what’s the best tax policy given that certain tax policies will lead to flight of the highest tax payers? and what’s the best tax policy if we assume that it will be applied globally? Both are interesting, and I think that while I’m answering the second more, I don’t think that wealth tax is a nonstarter as an answer to the first.