And those unrealized gains, saved for a rainy day in an art safe in switzerland, or in some special financial scheme that effectively hides/reinvests any profits without triggering the tax obligation?
There is something to an extremely low-percentage wealth tax that kicks in only at an insane amount of wealth. It could introduce the obligation to track and report individual wealth in a standard way, at the risk of a significant financial penalty, helping to bring much needed transparency, which in turn can help shape future laws and policy.
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?
And those unrealized gains, saved for a rainy day in an art safe in switzerland, or in some special financial scheme that effectively hides/reinvests any profits without triggering the tax obligation?
There is something to an extremely low-percentage wealth tax that kicks in only at an insane amount of wealth. It could introduce the obligation to track and report individual wealth in a standard way, at the risk of a significant financial penalty, helping to bring much needed transparency, which in turn can help shape future laws and policy.
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?