That wealth is just paper until somebody spends it to buy something… capital goods, or services, or political influence, or whatever. Let people sit on their paper fortunes, but tax it consistently whenever it’s used to buy stuff, or collateralize a loan, or whatever that allows people to realize value.
I wouldn’t necessarily oppose a wealth tax, I just don’t think it solves the problem. The problem we need to solve is passive income being taxed far less than wage income, and then we need to tax both kinds of income at rates that make sense.
n some special financial scheme that effectively hides/reinvests any profits without triggering the tax obligation
If that happens, then the system is fundamentally broken. If cross-border complications allow for hiding of passive income, then they are effectively hiding the wealth itself.
the obligation to track and report individual wealth in a standard way
I just don’t think that’s possible. The US can’t force reporting requirements on “art” in Switzerland or Botswana. And wealth is difficult to measure anyway – if the wealth is invested in art in a safe in Switzerland, how do you even value it? How can you possibly know what the next person is willing to spend for that art?
Instead, wait for the owner to sell it, and THEN tax the sale. It’s very hard to measure and capture “wealth”; it’s relatively easy to capture transactions.
This is what bothers me. We say it’s impossible to do for the wealthy like this. Yet we regular folks get taxed like this every year. Property taxes. We have to pay for the illiquid shit we own, but it’s impossible for the wealthy?
Is the US government (or any national government) going to evaluate the value of paintings or baseball memorabilia or the portfolio of song rights for the The Turtles?
My sense is that it’s easier to establish value for things – and make a case for taxes – when they are sold in a market or used as a financial instrument (e.g. to collateralize a loan).
Estimate it. As I clearly said, it is mostly about increasing transparency, for a greater understanding and better policy tomorrow. Turn those that hide their wealth from the tax authorities into criminals, while making compliance easy and cheap/mostly free.
Some countries now require you to pay a yearly future-tax-contribution on financial investments, which is then corrected at time of sale (eg. potential for a tax refund after selling a stock after it had a very bad year). Good or bad, I don’t know.
That wealth is just paper until somebody spends it to buy something… capital goods, or services, or political influence, or whatever. Let people sit on their paper fortunes, but tax it consistently whenever it’s used to buy stuff, or collateralize a loan, or whatever that allows people to realize value.
I wouldn’t necessarily oppose a wealth tax, I just don’t think it solves the problem. The problem we need to solve is passive income being taxed far less than wage income, and then we need to tax both kinds of income at rates that make sense.
If that happens, then the system is fundamentally broken. If cross-border complications allow for hiding of passive income, then they are effectively hiding the wealth itself.
I just don’t think that’s possible. The US can’t force reporting requirements on “art” in Switzerland or Botswana. And wealth is difficult to measure anyway – if the wealth is invested in art in a safe in Switzerland, how do you even value it? How can you possibly know what the next person is willing to spend for that art?
Instead, wait for the owner to sell it, and THEN tax the sale. It’s very hard to measure and capture “wealth”; it’s relatively easy to capture transactions.
This is what bothers me. We say it’s impossible to do for the wealthy like this. Yet we regular folks get taxed like this every year. Property taxes. We have to pay for the illiquid shit we own, but it’s impossible for the wealthy?
Is the US government (or any national government) going to evaluate the value of paintings or baseball memorabilia or the portfolio of song rights for the The Turtles?
My sense is that it’s easier to establish value for things – and make a case for taxes – when they are sold in a market or used as a financial instrument (e.g. to collateralize a loan).
Estimate it. As I clearly said, it is mostly about increasing transparency, for a greater understanding and better policy tomorrow. Turn those that hide their wealth from the tax authorities into criminals, while making compliance easy and cheap/mostly free.
Some countries now require you to pay a yearly future-tax-contribution on financial investments, which is then corrected at time of sale (eg. potential for a tax refund after selling a stock after it had a very bad year). Good or bad, I don’t know.
I’m not sure that’s how taxes work, though.