Wealth tax (1 Viewer)

Dre

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https://www.cnbc.com/2019/01/24/elizabeth-warren-to-propose-new-wealth-tax-economic-advisor.html

Elizabeth Warren is going to propose a wealth tax apparently. I’ll be honest, I don’t hate this nearly as much as an income tax increase. Probably because I’m not wealthy. You know wealthy Republicans will hate it either way (income or wealth tax). But I’ll enjoy seeing the response from wealthy liberals (they might not care honestly, but I’d like to see anyway). Wealth inequality is so much greater than income inequality. Income tax makes it more difficult for people to become wealthy, but a wealth tax really hits the mega rich.

I am not saying I want this, but if I had to choose one, I’d go with the wealth tax (since I don’t see myself ever being close to that one).
 

B4YOU

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May not be Constitutionally allowed. A wealth tax is a direct tax. That said, a 2% wealth tax seems pretty reasonable. Wealth inequality and the fact most two-income households live paycheck to paycheck suggest significant change is needed.
 

Zztop

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I think it also said 3% for people making over a billion... 3% of a billion is only 30 million. I doubt a billionaire would even notice that little gone.
 

B4YOU

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Should’ve made it 10%.
Disagree. I'm not a financial guru so I could be wrong, but here's how I see it:

If you figure an annual investment return of 8%, then a 2% wealth tax is really a 25% income tax on top of the highest long term capital gains rate of 20% for a person 100% invested. So it's a 45% tax on people who don't earn a traditional income, but rely on investments. A wealth tax would encourage investment over huge purchases that provide no returns (buying a yacht). I don't think we ever get a wealth tax, but at 10% it would result in negative wealth generation and not just a reduction in wealth accumulation.

I think the 2% number seems reasonable if viewed as a 45% income tax rate given the top current income tax rate is 39%.
 

mb504

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I think it's a great idea. I'm also looking forward to all the genius takes about how people are going to stop working to hoard wealth once they get to "only" $49 million, or some bullshirt about this affecting family farmers.
 
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Dre

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Should’ve made it 10%.
I think there is a number that would lead to people leaving. 1% I think is safe. 2% also (probably). 3% is probably going to start to really annoy some folks. 10% ...and everyone moves to Australia
 

IntenseSaint

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Is this just an addition tax on income or is she talking about a flat 2-3% of their entire wealth yearly? Any solid details on this? Hard to comment otherwise.

Like heathen said in their post yesterday. It's better to be fully informed before making a rash statement on a headline.
 

BobE

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Sen. Elizabeth Warren (D-Mass.) will reportedly introduce a proposal to tax wealthy Americans who have more than $50 million in assets.

The Washington Post reports that Warren's “wealth tax” is aimed at addressing growing income and wealth inequality in the country.

The proposal could help the progressive lawmaker stand out in the 2020 Democratic presidential field, though it is likely to receive scrutiny from her opponents.

Emmanuel Saez, a left-leaning economist advising Warren, said her plan is to impose a 2 percent tax on Americans with more than $50 million in assets and a 3 percent tax on those with more than $1 billion in assets.

Her proposed tax could garner as much as $2.75 trillion over a 10-year period from taxing roughly 75,000 families, Saez said. That equates to less than 0.1 percent of American households, he noted
https://thehill.com/news/campaign/426830-warren-to-propose-wealth-tax-on-those-with-more-than-50m-in-assets
 

IntenseSaint

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So they are going to tax assets, and not income? Assets that have already been taxed? I don't think this would be constitutional.
 
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I think it also said 3% for people making over a billion... 3% of a billion is only 30 million. I doubt a billionaire would even notice that little gone.
Actually, it would to many. It's what drives them. It's why they've spend millions to get back trillions in tax cuts. They are extremely good at hording wealth, but cannot see past it. It would cause significant hurt even though essentially it would make 0 difference in their lives.
 

B4YOU

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The easier thing to do is tax long term capital gains at higher than 20%. At 50M and an 8% return you bring in 4M at a tax rate of 20% having while the highest income is taxed at 35% right now. There's something fundamentally wrong with the ultra-wealthy paying a lower tax rate on income. The reason for the lower rate is the idea that it encourages investment/saving and reduces the impact of inflation.

If someone advocated for a new 25% and 30% tiered system starting at 500K and 1M, that would seem reasonable. We had a rate of 28% in 1987. The top 1% gets almost 40% of their income from capital gains and dividends.
 

porculator

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Not a fan of the idea. Wealth comes in different forms and by putting a direct tax on someone's property you're basically forcing them to sell 3% of it per year.

Take Elon Musk for example. He's worth $20 billion, but only because speculation has driven Tesla's market cap way higher than it should be. Tesla has no income yet, so he'll never see any of that $20 billion until he sells his own company. Not really fair to force him to sell 3% a year and potentially lose control because of what's essentially a very overvalued appraisal of his company.
 

Saint_Ward

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Hmm.. looks like there are a lot of mechanics to work out and understand. Not sure if this is a good idea or not. obviously a lot of wealth generation is undertaxed on the federal level. Property taxes take care of some of it, but a lot of that is likely well undervalued. But not all net worth is liquid.
 

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