Majority of Americans favor wealth tax on very rich: poll

https://www.reuters.com/article/us-usa-election-inequality-poll-idUSKBN1Z9141

by elsewhen • 7 years ago

77 172 7 years ago

reuters.com

derp_dee_derp• 7 years ago

this is a classic case of tyranny of the majority.

Majority of Americans favor stealing wealth from others.

spamizbad4• 7 years ago

They're trying to recapture their economic contributions. Companies won't pay more, so they're doing it via other means. When salaries were rising such actions were not popular.

akhilcacharya5• 7 years ago

Nearly everyone pays a form of wealth taxes in the form of property taxes. I see no reason why it should be different for the Rembrandts and the diamonds (if, of course, they could somehow be assessed at a level that exceeds ~$32 million to $50 million and more).

the2and7• 7 years ago

not really.

From wikipedia:

The scenarios in which tyranny perception occurs are very specific, involving a sort of distortion of democracy preconditions:

- Centralization: when federation makes a decision that should be local. => NOT THE CASE.

- Abandonment of rationality: when a decision "which bases its claim to rule upon numbers, not upon rightness or excellence"

Unless you argue taxing is irrational.

skitout6• 7 years ago

My feeling is rich are "stealing" from others, and feel that we are in an oligopoly... :)

foolrush• 7 years ago

You are not a billionaire and will never be one. Calm down.

pb72• 7 years ago

You don’t need to be a billionaire to think in a rational and unbiased way.

munk-a8• 7 years ago

I really don't think that it becomes stealing until the wealthy are pulled down below the poor - and that isn't anywhere near being on the table, most of the wealth tax options would just shrink the band between the super rich and the rich. It's not clear if this survey laid out a starting point but Warren's proposal is to only tax excess wealth above 50mil and such a tax would almost certainly be graduated (so a 51M person would pay tax on 1M and a 52M would pay tax on 2M (probably double?)) either way the worst that happens is that unearning trustfunders are slowly reduced to 50M in assets over time which is more than enough money for anyone... and I'd hope that as inflation/cost of living rose that level would be adjusted - being a millionaire today is hardly rare with most people who own a house in a metro area easily falling in that range.

uep• 7 years ago

This is grossly simplified, but I feel like I'm responding in kind.

The fundamental nature of a non-co-op business is that the company gets more value per person than it costs to employ that person. Companies have been "stealing" wealth from employees since they've existed.

SkyBelow4• 7 years ago

Do you see existing yearly property and car taxes as theft? In general, where does one draw the line between theft and taxes?

akdetrick• 7 years ago

The average worker is 5x more productive than they were 30 years ago, but wages have been basically flat.

In the last 10 years, the federal minimum wage has not risen, effectively reducing the minimum wage by about $1 due to inflation.

The richest 500 people in the world grew their wealth by $1.2 trillion in 2019, a 25% increase over a period of one year.

The minority build their wealth on the labor and taxes of the majority, but sure, adjusting the tax code is "stealing".

DuskStar4• 7 years ago

If workers are 5x more productive and wages are flat after inflation, why are profits also flat (after inflation and population growth)? This isn't a case of the corporate oligarchs taking a larger share, this is the pie not growing as fast as that 5x productivity improvement would imply.

sdinsn2• 7 years ago

The average worker is 5x more productive

Productivity isn't due to workers alone. Most productivity has been gained through technological advances.

nightski3• 7 years ago

I feel the wealth inequality issue needs to be addressed. My only problem with the wealth tax is that it takes money from the wealthy and feeds it to the government. I am having a hard time connecting how that improves the situation of the lower and middle classes.

sebazzz• 7 years ago

It helps if the money can be used to decrease tax on the lower classes or supply basic needs, like medical insurance.

jandrese7• 7 years ago

Yeah, it is a total mystery how adequately funding social welfare programs could somehow help the poor.

onepointsixC• 7 years ago

Benefits and welfare programs have been increasing dramatically as a percentage of GDP.

nightski3• 7 years ago

It's not a mystery at all. But that does not address the wealth inequality. It just provides bare necessities to the poor (which is a great thing, it's just not what I was talking about).

Pigo2• 7 years ago

I agree that many programs/departments need more funding, but the places with the most money seem to be doing the worst. It seems like more money is only part of the problem.

I think if they showed better efficiency and results, the public would be much more inclined to contribute. There's a lot of cynicism from witnessing so much waste and mismanagement.

mindcrime4• 7 years ago

Yeah, it is a total mystery how adequately funding social welfare programs could somehow help the poor.

If the government is going to steal my money, I'd like to think that it would go to something like that But in reality it goes to enriching the corrupt bureaucrats and politicians that make the rules and run the systems.

JohnFen2• 7 years ago

The argument for a higher tax on income above a certain level is that it helps prevent tyranny.

In the US, anyway, wealth equals power. Great wealth accumulated in few hands shifts a great deal of power over the nation from the populace to those hands. Without some constraint, this poses a real threat to overall freedom and liberty.

commandlinefan3• 7 years ago

You say that wealth accumulation poses a (vague, potential, in the future) threat to overall freedom and liberty... but arbitrary wealth redistribution poses an immediate, obvious threat to overall freedom and liberty _right now_.

qntmfred2• 7 years ago

this is why Andrew Yang is running for President on the Freedom Dividend. Solve wealth inequality and the social problems attached to it, abolish poverty, without feeding the government extra revenue that could go to waste (aka spent on wars)

kevingadd4• 7 years ago

I think you'll find our governments will never, ever fail to find the money they need for wars.

The "freedom dividend" may do some good but it's never going to abolish poverty or fix wealth inequality without lots of big systemic changes. How would giving everyone a fixed amount remotely "solve" wealth inequality when you still have even hundreds of billionaires out there?

keanzu3• 7 years ago

“The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money” -Alexis De Tocqueville

WhompingWindows2• 7 years ago

1. Held wealth past a certain threshold (500k? 1 million?) will be taxed at X% yearly.

2. US budgets get a huge new source of Y revenue, to balance current deficits, pay off debts, or fund progressive programs that help the needy.

How is that not helpful? It wouldn't help most HN users, it would help children, the elderly, sick, disabled, etc. It depends on the legislation, you can funnel the funds or you can keep them general purpose.

commandlinefan3• 7 years ago

Held wealth past a certain threshold (500k? 1 million?) will be taxed at X% yearly.

By definition, the revenue stream will run out. You tax, say, Jeff Bezos and Bill Gates until their net worth is exactly $500,000. Then, next year, they make $50,000, so you tax it again and their net worth is now exactly $500,000. Nobody else can ever pass that magic threshold once everybody’s been leveled down to it (unless they play games with offshore accounts in which case you still can’t get it). Now you have progressive social programs that rely on a steady stream of billions of dollars of confiscated wealth and nowhere to get it from.

svachalek• 7 years ago

This is not likely to actually happen, but I'd put it toward finally updating our creaky infrastructure. It would create jobs and put off the eventual reckoning of a power or water grid failure.

0x8BADF00D3• 7 years ago

Every time the government is involved they fuck it up. They are incompetent and make a career out of being maliciously incompetent. They will spend the money on stupid programs and unnecessary foreign wars. We already cannot trust the government with our tax revenue. These sickos are salivating over additional income to do extremely immoral things with.

kevingadd4• 7 years ago

We've cut taxes repeatedly in the US and repeatedly cut benefits spending but we're still starting new wars. Starving the beast isn't going to fix anything, there's always money for war.

If they're really salivating over additional income why aren't taxes increasing? (Other than on the poor, of course)

Want to stop wars? Stop wars, directly. Then once the war expenses are gone, you have way less government spending (we drop an OBSCENE amount of money on the military every year) and you can easily argue that the brand new surplus should be returned to the taxpayer via tax cuts (or via benefits program expansion).

Instead, we have everyone arguing over whether we can "afford" to make university cheaper or get uninsured people onto health plans even though those things are a massive benefit to the people and potentially even cost-neutral. Meanwhile, we cut taxes, to make absolutely sure the only thing we can afford is more wars.

lawnchair_larry2• 7 years ago

Alternative title: Majority of Americans are not rich, and therefore see no downside to taking from those who are

I do think the inequality gap is becoming more of a problem, but simply asking the population if they want someone else to pay more is going to have the obvious result.

sephlietz2• 7 years ago

Your argument implies that a wealth tax has always been favored by a majority of Americans (since by definition a majority of Americans have always been not rich), which I think is not true.

I think the truth is likely that personal wealth is but one of many factors in support for a wealth tax.

keanzu3• 7 years ago

The tyranny of the majority is a weakness inherent to majority rule in which the majority of an electorate pursues exclusively its own interests at the expense of those in the minority. This results in oppression of minority groups comparable to that of a tyrant or despot.

sephlietz2• 7 years ago

Rich, powerful people are not oppressed. Taxes are not oppression.

jandrese7• 7 years ago

Oh no, how will those poor powerless multi-millionaires survive? Oh wait, they still control the government.

This situation is kind of silly to talk about because the very people who would be subject to the tax will just tell their congresspeople to vote no and that will be the end of it.

kentm• 7 years ago

Alternative title: Majority of Americans are not rich, and therefore see no downside to taking from those who are

Thats unnecessarily reductive and dismissive of peoples' beliefs. Probably more along the lines of:

1) The rich have the system gamed in their favor and thus its only fair that they pay more into the system that secures their wealth.

2) There are direly needed services that need to be funded and the rich can afford the pain more than the poor. Wealth itself has a marginal utility.

jandrese7• 7 years ago

More importantly, capitalism itself tends to concentrate wealth at the top. People can use money to make more money without having to personally produce goods or offer services. This leads to a positive feedback loop where the available wealth concentrates in the hands of people who have lots of wealth. Left unchecked it leads to feudalism and eventually collapses on itself. This is one of the major jobs of a government in a capitalist system: to keep injecting wealth at the bottom of the pyramid to prevent the collapse.

It's arguable that the government has been shirking its duty in this regard since the 80s, and our increasing wealth gap is a symptom of a systematic failure. The longer we let this continue the more painful the solution will have to be in the end. And it's already pretty bad--we have multiple billionaires in the US. A billionaire has the same problem that plagued Communist countries, a person with that much personal wealth can't spend it quickly enough without basically becoming their own company, so the money becomes trapped and slows the economy bit by bit. We are in the situation now where people can start their own personal orbital rocket companies and still not spend their money fast enough to keep it in the economy.

mobilefriendly• 7 years ago

"Don’t tax you. Don’t tax me. Tax the guy behind the tree." -- Russell B. Long

happytoexplain• 7 years ago

That's pretty reductionist - it seems to me like we have many non-rich Americans who possess varying strengths of the belief that, generally, the rich rightfully earned all they've come to and in turn provide more or less proportional value to society, and that opinion informs their opinion on wealth taxes. As well, the implication that not-havers broadly can not be relied upon to express holistic or worthy opinions on their own society's rules regarding havers is ridiculous.

lawnchair_larry2• 7 years ago

Nobody made the general statement that not-havers can’t be relied upon to express worthy opinions regarding society’s rules.

In this specific case, the only thing that I might call ridiculous would be expecting that populations will not choose to act in accordance with what is in their individual best interest. It’s pretty rare, at least in western societies, for people to knowingly make choices that hurt themselves as individuals in order to benefit society as a whole.

Ultra wealthy people will always be the minority by definition. Nobody is going to complain if Bezos, Gates, and Buffet has to pay more. Even if a handful of the population disagree on principle, they are too busy with their own challenges in life to mount a fight on behalf of deca-billionaires.

So I think this survey is about as meaningful as asking every employee if they think they should get a raise if it means that their CEO has to take a pay cut. You’d be dumb not to, unless you’re the CEO, or you think you may become the CEO.

jawns2• 7 years ago

We might take a page from John Rawls here: https://en.wikipedia.org/wiki/Veil_of_ignorance

If everyone were behind a veil of ignorance and had to craft a just tax system without knowing whether they, themselves, would end up as poor or rich in such a system, would they nevertheless agree that those who are extreme outliers in terms of their wealth should contribute more?

My guess is that this proposal probably passes the veil of ignorance test.

Which is not to say that it couldn't have its downsides, or that reasonable people couldn't offer very good objections to it.

But by definition, a question of higher taxes on a tiny portion of extremely wealthy individuals is going to involve putting the question to people who, with rare exception, aren't going to be subject to the tax.

But that doesn't necessarily mean their decision is unfair.

DuskStar4• 7 years ago

If we were behind the veil of ignorance, I think most economists would choose a consumption tax of some sort as that's both the least distortive and one of the easiest to administer, with transfer payments added on top to achieve the desired level of 'progressiveness'.

Wealth taxes only really make sense if you want to hurt the rich, NOT to raise revenue. (Well, strictly speaking a one-time, no-warning, credibly-promise-to-never-do-it-again wealth tax is a good way to raise revenue. But governments can't credibly promise such things)

IfOnlyYouKnew• 7 years ago

Bill Gates, George Soros, and Warren Buffet have explicitly come out for higher taxes, and you can't quite wo easily question their motives.

akhilcacharya5• 7 years ago

I don't really care about wealth inequality, but from a revenue perspective a wealth tax seems fantastic _if_ can be enacted and enforced.

Bill Gates came out in favor of a limited wealth tax as well - I think a mild cost to citizenship for the uber-wealthy is a great idea. Feels like political malpractice to not attempt it.

Sidebar:

Kathy Herron, 56, a Republican who lives in Santa Rosa, California, said her support for Trump - a self-proclaimed billionaire - stems from his hardline policies on illegal immigration. In her view, the president would do well to support higher taxes on rich Americans. “We’re taxed from one end to the other, and it just seems the rich don’t pay their share,” she said.

Welfare chauvinism is an underrated political force in America. The next re-alignment will most likely be along these lines.

keanzu3• 7 years ago

Bil Gates doesn't need any new taxes to help him transfer his money to the US government, he can do it right now with "Gifts to the United States."

https://fiscal.treasury.gov/public/gifts-to-government.html

akhilcacharya5• 7 years ago

https://www.gatesnotes.com/About-Bill-Gates/Year-in-Review-2...

When I say the government needs to raise more money, some people ask why Melinda and I don’t voluntarily pay more in taxes than the law requires. The answer is that simply leaving it up to people to give more than the government asks for is not a scalable solution. People pay taxes as an obligation of law and citizenship, not out of charity. Additional voluntary giving will never raise enough money for everything the government needs to do. If Melinda and I signed over our foundation’s entire endowment to the state of California, it wouldn’t be enough to fund their public schools for even one year. A vibrant economic system depends on setting expectations for who pays how much.

lnanek2• 7 years ago

from a revenue perspective a wealth tax seems fantastic

Amusingly, the current manifesto re wealth inequality, Capital in the Twenty-First Century, pointed out that confiscatory taxes on the rich would be pointless re a revenue perspective. It turns out there are so few rich (e.g. the 1%) that even if you take all their money, it doesn't really dent our large government expenditures spent on the majority.

E.g. if the top tax rate went up to 70%, that would only be an extra 320 billion, which is only half medicare.

makomk2• 7 years ago

Which is of course exactly why politicians are pushing the idea of a wealth tax so hard. You can't get the kind of money required to fund their projects just by taxing the income of the rich. In order to come up with plausible-sounding figures and push their narrative that their proposals would totally be affordable if only we could make the evil wealthy pay up, they have to suggest converting a substantial proportion of the ultra-wealthy's total wealth into immediate, actual spending every year.

nostromo3• 7 years ago

It's worth noting that the income tax also started out as a tax on the very rich.

Once established, taxes have a way of finding their way from the rich, to the middle-class, and then even to the working poor.

throwno2• 7 years ago

This is why the wealth tax will fail to fix inequality. Eventually your parents shitty 250k house out in the sticks will qualify for wealth tax. Whatever stocks you have that aren't in a retirement account will be wealth taxed even though half their growth is just from inflation. It's going to suck.

akhilcacharya5• 7 years ago

In most places it already qualifies for a wealth tax in the form of a property tax...

nostromo3• 7 years ago

Making the rich poorer, but not actually doing anything to make the poor richer seems like a shitty way to fix inequality.

OnlineGladiator• 7 years ago

shitty 250k house out in the sticks

I think you might be disconnected from what a house costs in less-than-desirable areas, but there are houses you can find within driving distances of major jobs hubs for a fraction of that price. Sure, they won't be nice, but you used the word "shitty" and implied a middle-of-nowhere locale.

When I left Pittsburgh not too long ago, you could buy a house across the river from where I worked for about $30k. Yes, it sucked and wasn't a great spot, but that's a lot cheaper than $250k and I could walk to work.

I just checked and found a shitty fixer upper (so a lot of work) in the same spot for $40k. And there are plenty of nicer houses that don't need work for under $100k, and again this is just a few minutes drive away from Pittsburgh.

commandlinefan3• 7 years ago

that aren't in a retirement account

You give the progressives in the U.S. government more credit than I do. I’m just waiting for them to collectivize retirement accounts to “help the needy”, promise to redistribute it fairly so that I won’t have anything to worry about in my old age, and then break their promises when I’m 90 years old and too old to earn a living any more.

skitout6• 7 years ago

It's worth noting that the income tax use to be more than 90% on the very rich...

nostromo3• 7 years ago

Tax rules and deductions have changed over the years. Almost nobody paid the top rate and effective tax burdens for the rich have been more or less flat for decades:

https://i.imgur.com/uWl8vsp.png

seneca• 7 years ago

So, I hear this a lot, and I was curious what it actually looked like.

In 1944, it was 94% for two years. The bottom bracket was 24%. Then in '51 through '54 it hovered around 91%, with the bottom bracket hovering around 20%. This seems like it must related to World War II, though I didn't do enough research to know otherwise.

The bottom bracket today is 10%, with the top being 37%. Is this a "what's good for the goose..." situation? You think the rich ought to be taxes 90+% on their income, and the poor out to have their taxes approximately double, or only the rich should have increases? I'm not sure current scenario justifies the kind of extremes that World War II may have.

xienze3• 7 years ago

Exactly. “Tax the rich” is all fun and games until enough voters decide the threshold for “rich” starts at approximately $120k per year and owning a house.

Honestly I would not be surprised if by the time I’m ready to retire that all or part of my 401k is seized to help “solve” the (surprisingly still-present!) problem of wealth inequality.

jandrese7• 7 years ago

$120k per year is a couple of orders of magnitude below any threshold thus far proposed.

jandrese7• 7 years ago

Mostly when the very rich are elected to government positions and decide to shift the tax burden down.

criddell• 7 years ago

Here's a good example: Warren Buffet has a lower tax rate than his secretary (at least it was true 7 years ago).

https://money.cnn.com/2013/03/04/news/economy/buffett-secret...

Bostonian• 7 years ago

If 99% of people vote to impose a tax paid only by 1%, that violates the spirit of "no taxation without representation". That would be universally recognized if, for example, the right-handed voted to raise taxes on the left-handed.

Related article: "Millionaires support a wealth tax — as long as they aren’t getting taxed: CNBC survey" https://www.cnbc.com/2019/12/23/millionaires-support-a-wealt... . It found that the majority of millionaires supported a wealth tax that kicks in at $50 million, but not at $10 million -- because they fear it would hit them, now or in the future.

Using the tax code to pull people down is morally wrong.

art0rz• 7 years ago

no taxation without representation

On the other hand, the 1% have enough money to influence politics through lobbying and "donations"

Frondo• 7 years ago

I'm confused. There are many taxes that only apply to a subset of people. Property taxes only apply to property owners, soda taxes only apply to people buying soda, gas taxes to people buying gas. Tax credits apply to certain people, too, like the EITC or mortgage credits.

What makes this qualitatively different to you?

Also, everyone can vote, so everyone in theory has equal representation. (in practice, the wealthy have a lot more time in their reps' ears than the poor, so they arguably already have a greater representation than your typical voter.)

dx87• 7 years ago

All the taxes you listed are tied to specific things. A generic wealth tax is saying that no matter how you got your money, there should be a cap on it. It's like locality pay, but on a national scale. I don't know if it's the right idea or not, but it's application is arbitrary enough that it's different than the other taxes.

akhilcacharya5• 7 years ago

I read a thread on /r/FatFIRE about a possible wealth tax. To my surprise, many supported it because they concluded it was impossible to accrue $50 million (specifically the Warren plan) just by saving aggressively and index-fund investing. Due to the exponential nature of wealth distribution I'd imagine there are far, far more millionaires with $5 million than there are with $50 million.

alrehn• 7 years ago

If left-handed people were way more dexterous or something and they had a huge material advantage in life over right-handed people, that might make sense.

There is no desire to take something away from a minority that the rest of us have. Just a desire to make them have a slightly lower exponential difference of money and power.

aazaa2• 7 years ago

A wealth tax is levied on an individual’s net worth, such as stocks, bonds and real estate, as well as cash holdings, similar in concept to property taxes. It is separate from an income tax, which applies to wages, interest and dividends, among other sources.

One often overlooked issue with a wealth tax is the damaging effect on financial privacy.

The income tax already has the IRS probing into nooks and crannies it has no business probing. It deputizes law-abiding businesses to snitch on each other through the obligation to report payments.

A wealth tax would ratchet the surveillance up even further. Not, not just income statements, but asset statements would be required. Enforcement would likely require reams of new compulsory snitching laws for sellers of property. It's not an outcome I think many respondents have though through much because privacy still flies well below the radar in the US.

Then there are unintended consequences. If you tax income, it re-appears as capital appreciation. If you tax assets, they will re-appear as invisible wealth. That's an outcome for which I doubt most in the country are prepared.

hyperhopper• 7 years ago

Capital appreciation is already taxed

leetcrew• 7 years ago

afaik, you don't actually report asset purchases to the government. at the time of sale, you report the cost basis and sale price and pay tax on any gains.

unless I'm mistaken on how the reporting works, this is much less intrusive than having to give the government an asset list every year.

WhompingWindows2• 7 years ago

I don't understand privacy well, can you provide specifics of which nooks/crannies of the wealthy need to be private from the IRS? Also, do you think wealth inequality is a problem, and if so, what'd be your alternative proposition to fix it?

aazaa2• 7 years ago

Consider how Joe, a poor person, will prove to the IRS that he has no assets to tax. Proving a negative is impossible, unless you're working with a closed system. You can make the financial system closed by requiring all income and all assets to be reported to the IRS.

The only way this works is if we all file asset statements, rich and poor. And that means an end to one of the last remaining forms of financial privacy - for everyone, not just the rich.

fatnoah2• 7 years ago

similar in concept to property taxes

All other merits aside, is it really similar to a property tax? I pay property taxes every quarter and I have just as much property as I started with. The value of the property also doesn't go down every tax cycle as a result. With a wealth tax, the person's wealth would decrease to a minimum at some point.

jawns2• 7 years ago

I pay property taxes every quarter and I have just as much property as I started with.

But you don't have as many assets as you started with.

Your total assets are relatively liquid, divisible assets, like cash, combined with relatively illiquid, indivisible assets, like your house.

So instead of chopping off 1% of your house every year and giving it to the government, you give them the value of 1% of your house in cash.

kevingadd4• 7 years ago

The distinction between wealth and property seems pretty fuzzy here and it's hard to clearly reason about this without addressing it. Property taxes are a great example - you're paying them on things like houses to support local infrastructure, right? And you still have the property afterward.

So let's say you don't want to pay a wealth tax on the money in your bank account - buy a house with it. Now you're not paying a wealth tax, because it's a house instead of US dollars. Instead, you're paying a property tax! If the wealth tax is too onerous you can just park that wealth in a house or something instead, maybe rent the house out (with the help of a management company) and make money off it. That's good, right? Get the economy going, create jobs, and you get a return on your investment.

To me even if a wealth tax isn't the right solution here (I'm not convinced, and I'm not sure it's feasible to implement), the distinction between "wealth" and "taxable property" is kind of arbitrary nonsense at this point.

If everyone is taxed fairly, you can eliminate lots of means testing and systemic complexity because everyone's paying in so everyone has equal right to access all of the systems and benefits a functioning state can have to offer, whether it's health care, public transit, education, etc.

asdfasdfasdfa• 7 years ago

In the same way you'll at some point have to sell property to get the money to pay your taxes.

munk-a8• 7 years ago

Just a clarification

the person's wealth would decrease to a minimum at some point.

under the Warren plan (which is pretty representative) that minimum is $50M which is still a ton of money... and taxes do decrease your held assets, sometimes this decrease may be visible on the property itself (property taxes preventing you from affording a reno you think is necessary) more likely it's visible in the form of your debt (being a bit slower to pay down a mortgage because of the loss of revenue to taxes).

So I think you may want to re-examine your statement about having just as much property as you started with, also it might help to examine the corollary related to a reduction to a minimum - that statement is technically correct, but I'd consider it meaningless at scale.

tempsy4• 7 years ago

the majority of billionaires are billionaires due to stock holdings, usually in their own company.

stock ownership of the largest shareholders in public companies are public and reported several times a year.

absolutely no one should think that their stock trading activity is private - it's constantly being reported to the IRS, SEC, FINRA, whatever.

munk-a8• 7 years ago

A lack of privacy from the press is the cost of fame, a lack of privacy from the IRS sounds rather reasonable as an equivalent for wealth.

Honestly, the way the IRS mostly catches tax frauds is by checking self-reported income against wage expenses reported by employers, in theory we really don't need to be personally involved with tax calculations and a lot of countries (like Sweden) just tell you what they think is right and ask if they messed anything up... the only reason we don't do that in the US is because Intuit has a huge boatload of money.

As an aside, nearly all financial transactions are carefully reviewed these days under the excuse of anti-terrorism or child safety in an effort to try and detect money laundering (which, in an open system, is super hard - but becomes solvable in a closed system)... and I'm alright with that.

gdhbcc• 7 years ago

All transactions are already supposed to be reported so I'm not sure in what way you wouldn't be able to acquire the exact same information using the current regulatory requirements, so I'm not too keen on your stance here.

mech1234• 7 years ago

The 2% wealth tax idea floated by Warren is an insanely high number. It sounds small because people don't understand finance.

A 4% withdrawal rate is about the most you can expect to indefinitely draw on a balanced portfolio without it disappearing in a relatively small number of years. A 2% wealth tax takes half of this.

ohazi7• 7 years ago

I'm skeptical that most respondents understood the questions correctly.

Most people are familiar with income tax, because they know that money is removed from their paycheck every month. Many also file tax returns.

A wealth tax, where a fraction of your bank balance is removed every month, is a totally alien concept to most people. If you haven't thought about it before, it can take a minute or two to wrap your head around what it would actually mean.

In a survey context, all of these questions can be answered on autopilot by mistaking "wealth tax for rich people" with "higher taxes for rich people," which are definitely not the same thing.

Whether or not you think a wealth tax is a good idea, I don't think we should let politicians sneak this through unless we're confident that the public actually understands what is being proposed. As other comments mentioned, income taxes started out as "wealthy only" and have since trickled down to the working poor.

I don't think most Americans want a tax on their bank balance.

Edit: No, I'm not arguing that people are dumb, just that they tend to rush through surveys. When rushing, I think this would be an easy mistake to make.

tempsy4• 7 years ago

why have such low confidence in the intelligence of Americans?

people aren't dumb, and if it was just a higher income tax it would be called such.

_jal• 7 years ago

It tends to be selective. When the speaker agrees with survey results, then it is clearly just common sense.

CPLX2• 7 years ago

It's not totally alien at all. It's the way we finance nearly all our local governments and school systems.

Tallying up property and paying a tax on it annually is something literally everyone does.

JoshTriplett2• 7 years ago

I would venture a guess that "property tax" doesn't quite feel the same as a wealth tax to most people, because most people don't have a paid-off house, so it's just one more component of their mortgage (and paid through an escrow account rather than directly). If you're paying a large aggregated bill anyway, it feels like just one more tax associated with money changing hands.

If your house is fully paid off, such that your only remaining costs on it are property taxes and insurance, then you're already far more well-off than the majority of people.

Also, financing schools and other local services via property taxes is a bad idea; doing so perpetuates inequality by giving more funding to services in more expensive neighborhoods.

supercanuck• 7 years ago

From the Article:

Majority of Americans favor wealth tax on ~~very rich~~
A wealth tax, where a fraction of ~~your~~ bank balance is removed every month.

Most people's Bank accounts earn less than 1%. Maybe you didn't understand the question correctly.

glogla2• 7 years ago

This is not true at all.

People are already familiar with property taxes. They pay them for their houses every year. In some US states they even pay property taxes on their cars.

However, there is no property tax on stocks, bonds, etc, which is how the rich store most of their wealth. So people pay taxes on their houses, but Bezos doesn't pay pretty much anything on his enormous giga-wealth.

fatnoah2• 7 years ago

In a survey context, all of these questions can be answered on autopilot by mistaking "wealth tax for rich people" with "higher taxes for rich people," which are definitely not the same thing.

That was my impression as well. I'd bet money that a large number of the respondents didn't really understand the question. I would love to see the exact question stated somewhere.

ohazi7• 7 years ago

I think this is likely even if the survey authors we're careful with the wording, which I believe they were.

Several responses are blasting me for thinking that people are stupid. I wasn't trying to claim that everyone made this mistake, only that it looks like it would have been an easy mistake to make, given most people's experiences.

Also many people pay rent, and are unfamiliar with property taxes.

spamizbad4• 7 years ago

A wealth tax, where a fraction of your bank balance is removed every month, is a totally alien concept to most people. If you haven't thought about it before, it can take a minute or two to wrap your head around what it would actually mean.

Many Americans already experience a form of wealth tax: property tax. You are taxed a percentage of the value of your property, something not terribly liquid.

Incidentally, a handful of states prefer to tax wealth in the form of property rather than income (Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming)

SkyBelow4• 7 years ago

Car tax and land tax are two very common existing wealth taxes. I wonder why they are rarely described as a wealth tax.

virtuous_signal• 7 years ago

There is a good reason property tax isn't quite like a wealth tax: property tax is used to pay for services provided by the municipality (schools, libraries, roads).

More similar to the wealth tax would be the so-called https://en.wikipedia.org/wiki/Land_value_tax that does make the rich pay for "hoarding" land as a commodity, without creating the the disincentive to improve the land (which is a side effect of property tax, which is levied on the value of the entire lot + buildings)

ohazi7• 7 years ago

1. Many people rent, and have never seen a property tax bill, despite paying it indirectly via their landlord.

2. It's not the same thing. You can choose how extravagant a house to live in relative to your total wealth and your income to make sure that you can cover the property tax bill while still meeting your saving goals.

An "everything else" wealth tax, (by definition) doesn't allow you to do that. Your control over how aggressively you want to save or spend is greatly reduced by an overall wealth tax.

dpiers• 7 years ago

I'd also argue that property taxes are a regressive form of wealth tax. For the average homeowner with a mortgage, they are taxed on an amount largely tied to the size of the mortgage and not their wealth. Also, most homeowner's primary source of net worth is equity in their homes, so they are effectively taxed on an amount exceeding their net worth.

Look at the following two individuals. Both live in $1MM homes with 1% property tax rates.

Individual A: - $200k equity in house - No other assets/savings - $10K property tax/year

Individual B: - $200k equity in house - $50MM stock portfolio - $10K property tax/year

A is paying 5% of their net worth in 'wealth' taxes, while B is paying 0.02% of their net worth in 'wealth' taxes. This is clearly absurd and should be fixed.

multiplegeorges• 7 years ago

The wording used in the survey is included in the article.

“the very rich should contribute an extra share of their total wealth each year to support public programs”

They included "extra share" and "total wealth". I think that's quite clear and 64% strongly or somewhat agreed with that statement.

“the very rich should be allowed to keep the money they have, even if that means increasing inequality”

54% of respondents disagreed with that statement.

Seems pretty clear cut and understandable.

ohazi7• 7 years ago

I agree with you that the authors probably tried to make this clear. My suspicion is based less on "sneaky pollsters" or "stupid people" as some comments suggest, and more on my observation that people tend to rush through surveys. When you're rushing, I think it would be easy to make a mistake like this.

munk-a8• 7 years ago

I think most Americans already get taxed on their bank balance, by their bank, inversely proportionate to how much they have, so it's not alien from that side - and it's also pretty much identical to real estate taxes which people are already used to paying... in fact a good way to sell a wealth tax might be by saying "Hey, you know how you pay taxes on your property? There are people out there so rich that they've got millions not even tied up in assets, maybe that wealth of theirs should be taxed the same as the wealth of yours - And don't forget, you don't even fully own your property, the bank has half."

It's an interesting way to consider the tax.

ohazi7• 7 years ago

Sure, but if you understand this concept, you're not likely mistaking wealth for income on a survey.

enraged_camel• 7 years ago

>I don't think most Americans want a tax on their bank balance.

This doesn't apply to _most_ Americans, this applies only to the very rich.

mindcrime4• 7 years ago

I don't think we should let politicians sneak this through unless we're confident that the public actually understands what is being proposed.

We shouldn't let politicians sneak this through regardless of what the public understands. Taxation is theft.

munk-a8• 7 years ago

That's a rather extreme viewpoint, I would counter with the view that actual theft is theft and taxation paying to apprehend criminals, recover stolen property and discourage crime is actually the only thing between us and rampant theft.

andrei_says_2• 7 years ago

I don’t mind a tax on my bank balance over $32,000,000 for example. I would need multiple lifetimes to spend so much money. Most of my money comes to me from real estate ownership and investments. I do not exchange time and life force for it. My bank account just grows.

It is ok some of it to pay taxes to make the lives of the less fortunate a bit less unbearable. After all I take 25-35% of their incomes in rent :)

(Note: well, I don’t really have such a bank account but if I did, I wouldn’t mind the tax)

ohazi7• 7 years ago

I agree with you in principle on this particular example, but where is the cutoff, and how often will it move? Will it move accurately, or will inflation be used to sneak it downward?

zelon88• 7 years ago

I don't think most Americans would have a tax on their bank balance. Hence, wealth tax on the rich.

They asked if rich people should pay taxes for being rich. This has nothing to do with regular people. This is the EXACT same gas-lighting technique used by the wealthy and their lobbyists to convince gullible employees that they have something in common with their boss.

throwawaysea• 7 years ago

Almost every country that has enacted a wealth tax has repealed it. And the version that Elizabeth Warren is proposing is fairly extreme - her 3% wealth tax rate would be double the 1.5% rate that France ended up repealing (https://www.bloomberg.com/opinion/articles/2019-11-14/france...). Personally I can’t get behind this idea because it just feels like it is taking away something you’ve already earned and own outright for whatever purpose you want. It waters down the concept of private ownership, which is a gateway for other erosions of individual rights.

I also just can’t see the government putting a large general fund to good use. This image shows what various billionaires would have been left with if a wealth tax were in place since 1982 (https://media.newyorker.com/photos/5d7a63377d7e360008bd5fbe/...). Bill Gates would have only $36b left - and he’s donated around that much to his foundation. Clearly if he felt the government was good at allocating and efficiently spending large funds, he would have given the government a bigger payment (https://fiscal.treasury.gov/public/gifts-to-government.html) rather than starting his own foundation. This is why I don’t buy his recently claimed support for a wealth tax.

apta2• 7 years ago

it is taking away something you’ve already earned and own outright for whatever purpose you want

The same applies to income tax.

pb72• 7 years ago

Wealth tax is double (infinite?) taxation.

zaphod420• 7 years ago

This is good for Bitcoin.

m11a2• 7 years ago

Indeed!

Rather than losing 5% of your wealth in the form of taxes to the US government, you can lose 200% in the form of cryptocurrency wealth redistribution and volatility.

forrestthewoods• 7 years ago

Yes. People often favor vague concepts that don’t appear to impact them. And often oppose actual policies when one is written and subjected to scrutiny. The devil is always in the details.

tempsy4• 7 years ago

I honestly think so much of what we take as "normal" in society today will change dramatically once Millennials become dominant holders of political offices.

jshaqaw4• 7 years ago

Or much of what millennials believe will shift when they become middle aged and holders of reasonable positive net worth.

tempsy4• 7 years ago

nope...clear most millennials will be worse off than parents into middle age.

0x8BADF00D3• 7 years ago

A wealth tax is unconstitutional. From the Constitution:

“Representatives and direct taxes shall be apportioned among the several states which may be included within this union, according to their respective numbers, which shall be determined by adding to the whole number of free persons, including those bound to service for a term of years, and excluding Indians not taxed, three fifths of all other Persons.“

How do you calculate a wealth tax on a house? How about a piece of art? This is nonsensical and shows how uneducated the average American is, to support this socialist nonsense.

jshaqaw4• 7 years ago

Pretty sure much of the existing state and local tax base is already funded by a wealth tax called property taxes. I agree implementation gets harder when you get into more escoteric assets like art.

ben509• 7 years ago

How about a piece of art?

They already have to do it to determine tax deductions. It's pretty subjective: https://www.irs.gov/appeals/art-appraisal-services

DuskStar4• 7 years ago

Strictly speaking, it means you can still have a wealth tax, it just has to average out to the same amount per person in each state. Which would go rather poorly for the poorest states.

sdinsn2• 7 years ago

How do you calculate a wealth tax on a house?

A wealth tax on houses already exists: property taxes. Are you saying property taxes are unconstitutional?

esoterica3• 7 years ago

Just tax capital gains as income if you want to hit the rich.

Wealth taxes are both harder to implement and enforce than income taxes (e.g. how do you appraise an illiquid asset) while conferring no meaningful advantages.

Miner49er2• 7 years ago

Why not both? I believe Bernie's plan, for example, is to do both.

esoterica3• 7 years ago

Because wealth taxes are harder to implement than income taxes while being economically isomorphic to them. The great triumph of financialization is establishing a clear equivalence between present value and future cash flows, so taxing one vs the other is tomato tomato.

munk-a8• 7 years ago

I was disappointed to recently learn that Canada also has capital gain tax loophole weirdness - up here income from capital gains is counted half, so if you make 75k in salary and get a 50k payout from options when your company is acquired then you're taxed as if you made 100k... there is no distinction for capital gains from primary property ownership or any other limitations, all capital gains at 50%.

makomk2• 7 years ago

Wealth taxes became a big part of American political discourse because your populist politicians realised they can promise voters astoundingly expensive things by framing them as being just a small percentage of the wealth of ultra-wealthy folks like Jeff Bezos. You can't pull off that rhetorical trick by taxing capital gains.

Of course, in reality I don't think this would work anyway. All that wealth only exists on paper - it's just the nominal values of their shareholdings at the current market price, and if you make everyone sell at once that price plummets and the illusion disappears. I'm not sure it even makes sense on a fundamental economic level. You can't turn shares in Amazon into healthcare in the way that you could, say, Bezos buying a less fancy yacht. Even though the yacht and the healthcare use different resources, other businesses in the economy with a choice between what resources they use to make their products receive pricing pressure to change that choice and ultimately, it should all sort itself out in the end. That doesn't work here. The only way for the sums to work out is for other people who would actually buy things to forgoe purchases worth as much as whatever you want to fund and buy Amazon shares with them instead - and the whole reason populist politicians want to frame this in terms of wealth in the first place is because what they want to fund is huge compared to the size of the US economy.

cameldrv• 7 years ago

Indeed. We have a top capital gains rate of 23.8%, a top dividend tax rate of 28.6%, and a top earned income tax rate of 40.6%. I can't think of any good reason capital gains should be taxed at a lower rate than earned income.

If you want a wealth tax, without the overhead of having to value all of your property every year, repeatedly forcing sales of illiquid assets, the easiest way to do it is the estate tax, which you only have to pay once in your life. This has also been gutted, and now a married couple has to have an estate of over $22 million to be subject to it at all.

We really don't need any new types of taxes, we just need to put fair rates on the ones we already have.

txsoftwaredev• 7 years ago

Why would the ultra wealthy not just store their assets in another country? Businesses and individuals routinely move to different states to avoid higher taxes.

virmundi• 7 years ago

Because so much of their wealth are denominated in US equities. If your stocks are in the NY stock exchange, you can’t move them beyond the US government’s reach.

jshaqaw4• 7 years ago

Most everyone supports a wealth tax. Most everyone thinks wealth starts at a level way higher than themselves.

m11a2• 7 years ago

The biggest issue I have with this is:

"the very rich should be allowed to keep the money they have, even if that means increasing inequality,"

Wording a question like that is so... biased. Maybe we should work on fixing how the enormous amount of tax money is spent now before asking taxpayers for more? $700bn in funding for military (around $1tn all funds considered), yet there's "increasing inequality". US spends 2x the amount the UK does on health per capita, yet the UK can afford single payer health. Administration costs are through the roof.

I think this is a case where "throwing more money at the problem" isn't the right solution.

DuskStar4• 7 years ago

Hell, there's NOT increasing inequality by sane definitions - meaning if you count government taxes and transfers. Yes, pre-tax, no-transfer income inequality has increased, but by definition increasing taxes and transfers won't fix that. And once you include ss/welfare/snap/eitc/etc as well as taxes, income inequality today has barely changed over the past century.

And the recent "increasing wealth inequality" papers have based on the dubious assumption that "wealth = capital gains income / risk-free instantaneous rate of return", [0] which means that wealth goes up as interest rates go down if income holds steady.

0: https://johnhcochrane.blogspot.com/2020/01/wealth-and-taxes-...

apta2• 7 years ago

What's the cutoff for a "very rich" person when it comes to these taxes?

Miner49er2• 7 years ago

Bernie's wealth tax starts at a wealth of $32 million.

Pigo2• 7 years ago

A lot of people think we didn't land on the moon, and that the Earth is flat.

mindcrime4• 7 years ago

So much of what needs to be said on this subject has already been said, and said long ago. I'll just leave this here:

What is law? What ought it to be? What is its domain? What are its limits? Where, in fact, does the prerogative of the legislator stop? I have no hesitation in answering, Law is common force organized to prevent injustice;—in short, Law is Justice. It is not true that the legislator has absolute power over our persons and property, since they pre-exist, and his work is only to secure them from injury. It is not true that the mission of the law is to regulate our consciences, our ideas, our will, our education, our sentiments, our works, our exchanges, our gifts, our enjoyments. Its mission is to prevent the rights of one from interfering with those of another, in any one of these things.

Law, because it has force for its necessary sanction, can only have the domain of force, which is justice. And as every individual has a right to have recourse to force only in cases of lawful defense, so collective force, so which is only the union of individual forces, cannot be rationally used for any other end. The law, then, is solely the organization of individual rights that existed before law.

###

Legal plunder has two roots: one of them, as we have already seen, is in human greed; the other is in misconceived philanthropy. Before I proceed, I think I ought to explain myself upon the word plunder. I do not take it, as it often is taken, in a vague, undefined, relative, or metaphorical sense. I use it in its scientific acceptation, and as expressing the opposite idea to property. When a portion of wealth passes out of the hands of him who has acquired it, without his consent, and without compensation, to him who has not created it, whether by force or by artifice, I say that property is violated, that plunder is perpetrated. I say that this is exactly what the law ought to repress always and everywhere. If the law itself performs the action it ought to repress, I say that plunder is still perpetrated, and even, in a social point of view, under aggravated circumstances. In this case, however, he who profits from the plunder is not responsible for it; it is the law, the lawgiver, society itself, and this is where the political danger lies.

It is to be regretted that there is something offensive in the word. I have sought in vain for another, for I would not wish at any time, and especially just now, to add an irritating word to our disagreements; therefore, whether I am believed or not, I declare that I do not mean to impugn the intentions nor the morality of anybody. I am attacking an idea that I believe to be false—a system that appears to me to be unjust; and this is so independent of intentions, that each of us profits by it without wishing it, and suffers from it without being aware of the cause.

Any person must write under the influence of party spirit or of fear, who would call into question the sincerity of protectionism, of socialism, and even of communism, which are one and the same plant, in three different periods of its growth. All that can be said is, that plunder is more visible by its partiality in protectionism, 3 and by its universality in communism; whence it follows that, of the three systems, socialism is still the most vague, the most undefined, and consequently the most sincere. Be that as it may, to conclude that legal plunder has one of its roots in misconceived philanthropy, is evidently to put intentions out of the question.

With this understanding, let us examine the value, the origin, and the tendency of this popular aspiration, which pretends to realize the general good by general plunder. The Socialists say, since the law organizes justice, why should it not organize labor, instruction, and religion? Why? Because it could not organize labor, instruction, and religion, without disorganizing justice. For remember, that law is force, and that consequently the domain of the law cannot properly extend beyond the domain of force.

Bastiat - The Law

http://www.gutenberg.org/files/44800/44800-h/44800-h.htm

dorchadas2• 7 years ago

Just wanted to say, I'm currently reading Good Economics for Hard Times by Banerjee and Duflo (the 2019 Nobel Prize winners), and it talks about this. It's a really interesting read about how we can make a more just society without giving up on capitalism as a whole, and quite a shocking transition from what you hear a lot on TV or from older economists (about trickle down, etc.). I'd recommend everyone read it; I got it from library, but now want to go buy my own copy to keep coming back to and rereading.

RickJWagner• 7 years ago

I tend to vote Republican, I don't oppose a more progressive tax. So long as the heavier taxes stay safely above middle class, I think it's a fair idea.

To get broad support, crafty lefties need only emphasize how much the taxes will affect Hollywood blowhards. That'll make the whole thing much more palatable to those on the right side of the aisle.

nojvek• 7 years ago

Here’s where things get tricky. The ultra wealthy have most of their wealth tied up in stocks/bonds.

Bill Gates and Bezos are the worlds richest because they have >1% ownership in their founding companies.

The rich get richer because the stock market and their companies are doing well. They own means of production.

Capital gains tax rate means if you hold stock for more than an year and sell it, you get taxed a bit less. There’s an incentive for longer term ownership.

Like property taxes, what if you taxed holding stock? Then that’s unfair as AMT crap. Holding stock is fake money. It could disappear in thin air when market crashes. Gains are only realized when you sell.

But when you sell, you still pay income tax.

So if a billionaire has ownership in his founding company but draws <100k of real income from stock, should they be taxed higher than a person who just makes 100k of salary?

I’m all for higher tax percentages at higher incomes but all of it gets very murky.

America was built on the foundations of if you work hard and build something great and have a pie of ownership, you get to reap the rewards.

Removing this ^ incentive causes all sorts of issues in other parts.

I would love estate tax to have a higher tax rate. Transferring property to kids shouldn’t be cheap since they didn’t do the hard work.

I would also love taxes to be 0 below a certain income bracket.

I would also love some form of aid when unemployed/ on the streets. Some sort of buffer. Better affordable healthcare. Less middleman. More transparency.

A lot of this problems aren’t money related but more about refactoring the current way of things and making more efficient use of what’s currently already there.

My 2 cents. Would love to debate.

Majority of Americans favor wealth tax on very rich: poll

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