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Wealth Tax (1 Viewer)

Max Power

Footballguy
A wealth tax on the richest Americans seems to be the go to answer whenever some of the Democratic candidates are asked how they intend to fund their plans.  While it appears to be highly popular, I am skeptical of of the idea. We don't do much to deter US money from being moved offshore by the ultra rich and I think implementing a wealth tax would only increase the number of people looking for Tax loopholes.  I worry some of the costs of these programs will trickle down to upper-middle class.

What are some forum thoughts on this?  Support it or not?  Will it work or backfire? 

What Is a Wealth Tax – And What Would It Mean for You?

It's a core element of Sen. Elizabeth Warren's tax policy, with her proposal to tax assets of $50 million or more at 2% and assets of $1 billion or more at 3%.

Sen. Bernie Sanders recently released his version of a wealth tax. His "tax on extreme wealth" would tax 1% of wealth of more than $32 million for married couples, then increase the tax to 2% for wealth between $50 million and $250 million and continue to increase incrementally before topping out at 8% for wealth of more than $10 billion.

Proponents of a wealth tax see it as a way to reduce economic inequality, address the climate crisis and boost the economy. In fact, a group of ultrawealthy Americans penned an open letter this summer asking to be taxed on their wealth to strengthen the U.S. economy.

Critics of the wealth tax say it will be impossible – or even unconstitutional – to enforce, would stall economic growth and job creation, and may even encourage multimillionaires to move money abroad.

https://money.usnews.com/money/personal-finance/taxes/articles/what-is-a-wealth-tax-and-what-would-it-mean-for-you



 
You either want to fix the debt or you don't. The fix will only come at the expense of the richest.

No need to listen to the political right on debt or taxes anymore. They flatly lied about the myriad of consequences for the past 50 years.

 
You either want to fix the debt or you don't. The fix will only come at the expense of the richest.

No need to listen to the political right on debt or taxes anymore. They flatly lied about the myriad of consequences for the past 50 years.
They wont fix the debt no matter how many taxes get passed. They will just spend more. My new philosophy on government spending is that as long as i get mine lets do it! 

 
Meh, just close all the so-called loopholes in current system, increase the upper tier rates, remove the SS cap...and then pass the FairTax

 
A wealth tax on the richest Americans seems to be the go to answer whenever some of the Democratic candidates are asked how they intend to fund their plans.  While it appears to be highly popular, I am skeptical of of the idea. We don't do much to deter US money from being moved offshore by the ultra rich and I think implementing a wealth tax would only increase the number of people looking for Tax loopholes.  I worry some of the costs of these programs will trickle down to upper-middle class.

What are some forum thoughts on this?  Support it or not?  Will it work or backfire? 
Generally, I'm against tax increases, though I understand that it may be unfeasible at times.  I don't love the idea of a wealth tax, but there are examples worldwide of other countries with wealth taxes (at a much lower exemption rate than those proposed in the US) and it doesn't seem to cripple their economies.  I mean, they're talking about the ultra wealthy here - it's not nothing, but these thresholds are even higher than the current estate tax thresholds, for example.  Still, I don't love the idea.

I am curious what you mean by "We don't do much to deter US money from being moved offshore by the ultra rich"?  The US is about as overreaching as it gets in terms of tracking their citizens'/corporations' money abroad, in my experience.  

 
Meh, just close all the so-called loopholes in current system, increase the upper tier rates, remove the SS cap...and then pass the FairTax
why are you reforming income tax laws if you want a fair tax?  why not just do the latter?

 
My fear has been ,and always be, what the definition of the "richest Americans" constitutes.

My wife and I make a good living but we aren't making NFL kind of bank.

However, there are people we know who would absolutely say we are "rich"   I am fairly confident the threshold of "richest Americans" will continue to drop.

 
What are some forum thoughts on this?  Support it or not?  Will it work or backfire? 
It would work for about 2 seconds until challenged in court and found to be unconstitutional - this is very clear.  It's a direct tax (both Madison and Hamilton wrote that this would be a direct tax) and would have to be apportioned to the states.  To change this, much like the income tax, would require a constitutional amendment.

So, yeah, not going to work.

 
A wealth tax on the richest Americans seems to be the go to answer whenever some of the Democratic candidates are asked how they intend to fund their plans.  While it appears to be highly popular, I am skeptical of of the idea. We don't do much to deter US money from being moved offshore by the ultra rich and I think implementing a wealth tax would only increase the number of people looking for Tax loopholes.  I worry some of the costs of these programs will trickle down to upper-middle class.

What are some forum thoughts on this?  Support it or not?  Will it work or backfire? 
Are any of the Dem candidates besides Bernie and Warren promoting a wealth tax?

 
If there are wealthy Americans that want to voluntarily pay an additional tax, by all means, go for it. 

If the government wants to solve the budget issue, they need to look themselves in the mirror and their spending habits.  They need to decrease spending first by cutting funding for some programs.  Adding a wealth tax won't help the budget crisis, the government will find a way to burn that money in an inefficient manner.  Plus, rich people will just move their money abroad as the article in the OP states.  

 
If there are wealthy Americans that want to voluntarily pay an additional tax, by all means, go for it. 

If the government wants to solve the budget issue, they need to look themselves in the mirror and their spending habits.  They need to decrease spending first by cutting funding for some programs.  Adding a wealth tax won't help the budget crisis, the government will find a way to burn that money in an inefficient manner.  Plus, rich people will just move their money abroad as the article in the OP states.  
This argument is not very persuasive. Nobody wants to pay more taxes. But we need some people to do so to make the country run.

Which programs need to be cut?

 
A wealth tax on the richest Americans seems to be the go to answer whenever some of the Democratic candidates are asked how they intend to fund their plans.  While it appears to be highly popular, I am skeptical of of the idea. We don't do much to deter US money from being moved offshore by the ultra rich and I think implementing a wealth tax would only increase the number of people looking for Tax loopholes.  I worry some of the costs of these programs will trickle down to upper-middle class.
Yes.  Fix the tax code first.  Then tax the wealthy.  Otherwise, it's just another tax on the middle class disguised as taxing the wealthy

 
why are you reforming income tax laws if you want a fair tax?  why not just do the latter?
Well, yeah, that’s my personal preference with regards to taxation.  But the article and the subject matter itself generally revolves around existing tax code and support for consumption tax still isn’t all that great 

 
What are some forum thoughts on this?  Support it or not?  Will it work or backfire? 
wealthy normally own businesses

they'll raise the cost of goods and services to pay for the increase

simple

or they'll find more tax shelters

taking money from people to give to others isn't a solution - ever

 
You either want to fix the debt or you don't. The fix will only come at the expense of the richest.
the US Govt brings in what, 5 trillion in each year? 

cut spending to 4 trillion ... there, I solved it, in my kids generation the national debt would be zero in 2 decades

Fed Govt LOVES to spend ... actually, loves to OVER spend

give the Fed Govt 15 trillion ... they'll spend 16.5 trillion guaranteed 

 
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wealthy normally own businesses

they'll raise the cost of goods and services to pay for the increase

simple

or they'll find more tax shelters

taking money from people to give to others isn't a solution - ever


So you don't think there should be any taxes?

 
This is a very dumb idea for a number of reasons.  First it is unconstitutional as taxes on property need to be apportioned among the states.  Also, we don't want to inhibit capital creation and investment which is what this tax does.  This will have a major impact on investment and jobs.  Go ahead and raise the marginal rate.  I would support two new top marginal rates something on like $2m and $5mm of income raised by 5% each over the current top rate.  That would bring in a ton of revenue (not hit anyone in the middle class (I call BS on that dumb farmer argument rolled out all the time) and wouldn't impact investments and savings like a wealth tax would.  

 
Generally, I'm against tax increases, though I understand that it may be unfeasible at times.  I don't love the idea of a wealth tax, but there are examples worldwide of other countries with wealth taxes (at a much lower exemption rate than those proposed in the US) and it doesn't seem to cripple their economies.  I mean, they're talking about the ultra wealthy here - it's not nothing, but these thresholds are even higher than the current estate tax thresholds, for example.  Still, I don't love the idea.

I am curious what you mean by "We don't do much to deter US money from being moved offshore by the ultra rich"?  The US is about as overreaching as it gets in terms of tracking their citizens'/corporations' money abroad, in my experience.  
Not true, Europeans are removing these taxes as it has lead to a flood of high net worth individual leaving those countries.  

 
Bad idea for at least three important reasons.

1. It's unconstitutional without an amendment.

2. It's really a savings tax*, which is less efficient than an income tax or a consumption tax.

3. The IRS is not set up to audit people's net worth, as opposed to their incomes. It would rely on self-reporting and invite a lot of cheating. Getting set up to monitor everyone's net worth (domestic and foreign) would be expensive and intrusive and would take a while.

Increasing income taxes seems like the better idea. Adding a federal consumption tax is also a better idea. Adding a federal real-property tax would be just as unconstitutional as a federal wealth tax, but would be a better idea in terms of policy.

___
*Anne and Brad both earn $1 million. Anne spends it on cocaine. Brad puts it in his savings account to pay for his kids' college tuition. Brad pays a wealth tax while Anne does not because Brad saved while Anne consumed. When people are taxed on their savings, they tend to shift away from savings toward consumption -- they tend to act more like Anne and less like Brad. This is arguably not ideal, as savings rates are already arguably lower than optimal (and relatedly, consumer debt is arguably higher than optimal).

 
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As a former auditor I can't imagine how nasty trying to determine fair value of assets subject to such a tax would be.  It would have to be a heavily audited area and one that almost universally would have disputes, challenges, court cases from it.

 
Generally, I'm against tax increases, though I understand that it may be unfeasible at times.  I don't love the idea of a wealth tax, but there are examples worldwide of other countries with wealth taxes (at a much lower exemption rate than those proposed in the US) and it doesn't seem to cripple their economies.  I mean, they're talking about the ultra wealthy here - it's not nothing, but these thresholds are even higher than the current estate tax thresholds, for example.  Still, I don't love the idea.

I am curious what you mean by "We don't do much to deter US money from being moved offshore by the ultra rich"?  The US is about as overreaching as it gets in terms of tracking their citizens'/corporations' money abroad, in my experience.  


"According to new estimates issued by the Internal Revenue Service, tax evasion is a pretty lucrative business, costing the federal government on average $458 billion per year.  Ultimately, the tax collectors at the I.R.S. think they will recover about $52 billion of that lost revenue, resulting in a net tax gap of $406 billion annually. The service also estimates the voluntary compliance rate, which is a measurement of the total taxes paid relative to total taxes owed. By this measure 81.7% of taxes owed find their way to the I.R.S. on time."

I was listening to a podcast talking about how the rich find these loopholes and gray areas for offshore tax avoidance. The money is hard to track and even if the IRS does track it down they have lawyers to fight it.  Then after the hiding and fighting it legally, the U.S. is more likely going to proceed with civil penalties than criminal penalties.  Often the fines being what they owed in the first place.  To top it all off you have to consider the rich are typically powerful people as well.  They have friends in high places who can make things go away or lessen the financial impact.  It was his opinion that there isn't a whole lot of downside to trying to hide assets and finances offshore.   

 
"According to new estimates issued by the Internal Revenue Service, tax evasion is a pretty lucrative business, costing the federal government on average $458 billion per year.  Ultimately, the tax collectors at the I.R.S. think they will recover about $52 billion of that lost revenue, resulting in a net tax gap of $406 billion annually. The service also estimates the voluntary compliance rate, which is a measurement of the total taxes paid relative to total taxes owed. By this measure 81.7% of taxes owed find their way to the I.R.S. on time."

I was listening to a podcast talking about how the rich find these loopholes and gray areas for offshore tax avoidance. The money is hard to track and even if the IRS does track it down they have lawyers to fight it.  Then after the hiding and fighting it legally, the U.S. is more likely going to proceed with civil penalties than criminal penalties.  Often the fines being what they owed in the first place.  To top it all off you have to consider the rich are typically powerful people as well.  They have friends in high places who can make things go away or lessen the financial impact.  It was his opinion that there isn't a whole lot of downside to trying to hide assets and finances offshore.   
Also key to note is there is a significant difference in tax evasion and tax avoidance.  When you talk loopholes,  you are referring to avoidance, not in that missing slice of the pie mentioned above.  Avoidance is not illegal, evasion is tax fraud.    I can kind of get on board somewhat with the statement the rich obviously do have more means to fight it, connections etc.  But getting on the wrong side of the IRS is a recipe for a miserable life.  I'd say from experience that most wealthy people do look for tax avoidance strategies, loopholes some would call them.  At the end of the day though they have no real interest in fighting a pitched battle in court with the IRS.  Most judgments from audits don't end up in tax court, but rather result in payments to dismiss the liability.  

 
Also key to note is there is a significant difference in tax evasion and tax avoidance.  When you talk loopholes,  you are referring to avoidance, not in that missing slice of the pie mentioned above.  Avoidance is not illegal, evasion is tax fraud.    I can kind of get on board somewhat with the statement the rich obviously do have more means to fight it, connections etc.  But getting on the wrong side of the IRS is a recipe for a miserable life.  I'd say from experience that most wealthy people do look for tax avoidance strategies, loopholes some would call them.  At the end of the day though they have no real interest in fighting a pitched battle in court with the IRS.  Most judgments from audits don't end up in tax court, but rather result in payments to dismiss the liability.  
I think you're responded better than I could've, so I'm going to leave it.  :goodposting:

 
You either want to fix the debt or you don't. The fix will only come at the expense of the richest.

No need to listen to the political right on debt or taxes anymore. They flatly lied about the myriad of consequences for the past 50 years.
My college professor said the rich are so mobile that a good % will bolt to safer tax havens.  The good thing is I don`t ever have to worry about being taxed high.

 
My college professor said the rich are so mobile that a good % will bolt to safer tax havens.  The good thing is I don`t ever have to worry about being taxed high.
Of course he did, because hes buying and selling into the lies of the past 50 years.

You can always make it much harder to hide money offshore. But you'd have to make real changes and not buy into the dogma of the past that got us where we are today.

 
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Of course he did, because hes buying and selling into the lies of the past 50 years.

You can always make it much harder to hide money offshore. But you'd have to make real changes and not buy into the dogma of the past that got us where we are today.
So he is about as liberal as they come and he has these concerns?

 
There's just not enough IRS agents to do the hard work in recovering the lost revenues.  Hiring freezes and shutdowns have made it even tougher.  

 
So you don't think there should be any taxes?
I'm a flat tax man

10% of a millionaire is very important to them, as important as 10% is to a minimum wage worker ... but the core problem is Govt spending. 

I'm serious - double the income into the Govt coffer's in 2020 ... and the Fed Govt will spend it all plus an additional trillion 

 
The only flat tax I'd welcome is a federal sales tax, and then eliminate the income tax.

 
Even more debt.
debt comes when you spend more than you bring in

every single year this happens either through debt or deficit - the national debt climbs climbs climbs and there is no accountability

you can tax everyone 80% ... and the Fed Govt would spend it

100% promise that AND add a trillion in debt every year :(  

 
Of course he did, because hes buying and selling into the lies of the past 50 years.

You can always make it much harder to hide money offshore. But you'd have to make real changes and not buy into the dogma of the past that got us where we are today.
You missed the point.  He's not talking about hiding money, he's talking about the rich giving up US citizenship and relocating to Monaco, Gibraltar, Vanuatu, etc.

 
You missed the point.  He's not talking about hiding money, he's talking about the rich giving up US citizenship and relocating to Monaco, Gibraltar, Vanuatu, etc.
Same deal. Same repeated BS. Many of the richest want to come to America also. More-so even. If the traitors want to be selfish, nobody can stop them. But be careful what laws can be past about your wealth and wanting to move it away -- nothing stopping that from occurring.

 
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BigSteelThrill said:
Same deal. Same repeated BS. Many of the richest want to come to America also. More-so even. If the traitors want to be selfish, nobody can stop them. But be careful what laws can be past about your wealth and wanting to move it away -- nothing stopping that from occurring.
Seriously, why so vindictive about someone wanting to keep their money they've already paid income tax on?  Either way, I don't think it will be an issue as it's beyond unlikely to pass and then if it did would have the constitutionality issue.

 
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Now part two of the question would be what do you say to candidates who are proposing using this "Wealth Tax" for social programs?  If the thinking is that the tax is unconstitutional, won't work or too hard to manage, how will these programs funded or will they just not be instituted?

Why aren't more people pointing to the holes in these ideas? 

 
BigSteelThrill said:
Same deal. Same repeated BS. Many of the richest want to come to America also. More-so even. If the traitors want to be selfish, nobody can stop them. But be careful what laws can be past about your wealth and wanting to move it away -- nothing stopping that from occurring.
Giving up citizenship isn't treason - that equivalence is tripe. 

There are already laws on the books concerning exit taxation.

 
Now part two of the question would be what do you say to candidates who are proposing using this "Wealth Tax" for social programs?  If the thinking is that the tax is unconstitutional, won't work or too hard to manage, how will these programs funded or will they just not be instituted?

Why aren't more people pointing to the holes in these ideas? 
They are, but it's primary session -  i.e. an echo chamber aided by a propagandist media arm.   Too much chaff to hear those voices.

 

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