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Billionaires and Taxes

ahhell said:
Wealth taxes are notoriously difficult to collect on and tend not to actually raise that much money, its why less than a dozen or so nations actually have a wealth tax. More have inheritance taxes which are probably better. Easier to collect on.

The other thing about the super rich like Bezos et al, a lot of their wealth is stock in their companies, basically
Schrodinger's wealth. It not actually wealth until its sold and what it's worth could vary considerably. This is particularly true of Musk as Tesla is clearly over valued and has been for years, and what the hell is Twitter actually worth?
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It's a classic play by apologists for the ultrawealthy to introduce forms of wealth that are more complex to value to pretend that taxing wealth is just too difficult to distract from the fact there are plenty of assets that have a value that is not difficult to determine.

Use the price paid for an asset as the basis for the tax value. E.g., land, buildings, private jets, super yachts, cars, jewellery, etc. Valuations required every few years at the expense of the owners of the assets. Use the amount an asset is insured for as a basis of its value. Have huge fines and jail time for people involved in setting up, operating and using corporate structures to obfuscate personal ownership of wealth. Taxable value of shares based on a 5 year rolling median. Equalise capital gains tax with income tax.
 
ahhell said:
Wealth taxes are notoriously difficult to collect on and tend not to actually raise that much money, its why less than a dozen or so nations actually have a wealth tax. More have inheritance taxes which are probably better. Easier to collect on.

The other thing about the super rich like Bezos et al, a lot of their wealth is stock in their companies, basically Schrodinger's wealth. It not actually wealth until its sold and what it's worth could vary considerably. This is particularly true of Musk as Tesla is clearly over valued and has been for years, and what the hell is Twitter actually worth?
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gains should be realized when they’re used as collateral imo
 
Ivor the Engineer said:
Use the price paid for an asset as the basis for the tax value. E.g., land, buildings, private jets, super yachts, cars, jewellery, etc. Valuations required every few years at the expense of the owners of the assets. Use the amount an asset is insured for as a basis of its value.
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It's likely these valuations are already being done for insurance anyway, which would be another way to catch it.
 
Ivor the Engineer said:
It's a classic play by apologists for the ultrawealthy to introduce forms of wealth that are more complex to value to pretend that taxing wealth is just too difficult to distract from the fact there are plenty of assets that have a value that is not difficult to determine.
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Hmm,I think this can be classified as poisoning the well. People who point out the difficulties of taxing wealth are not necessarily apologists for the ultra wealthy - they are just being realistic.

Ivor the Engineer said:
Use the price paid for an asset as the basis for the tax value. E.g., land, buildings, private jets, super yachts, cars, jewellery, etc. Valuations required every few years at the expense of the owners of the assets. Use the amount an asset is insured for as a basis of its value. Have huge fines and jail time for people involved in setting up, operating and using corporate structures to obfuscate personal ownership of wealth. Taxable value of shares based on a 5 year rolling median. Equalise capital gains tax with income tax.
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There are two problems I can see here. The first is that, as soon as you decide to tax people's assets, you'll quickly discover that the ultra rich no longer have any, any more than they have currently an income. One thing that ultra rich people do have apart from super yachts and private jets is very good tax lawyers and accountants. Whatever resources you put in place to try to tighten the loopholes, Jeff Bezos can afford to pay more to find new loopholes.

The second problem is exactly what do you tax? Are you proposing to levy an annual tax based on a percentage of the asset's value? That, to me, seems somewhat unfair and problematic. If I come by an expensive house but don't have enough to pay the tax bill on it, I'll be forced to sell, probably at a knock down price, in order to avoid prison. This does already happen, of course with things like inheritance tax, but it will happen much more frequently and it will affect the less wealthy disproportionately because they are less likely to have the liquid assets to cover their tax bills.

Stocks and shares would be particularly problematic because a tax on simply owning them (as opposed to selling them) will almost certainly crash the stock market. Who would want to own shares when they have to pay the government every year just for the privilege of owning them?

If you tried to tax Elon Musk on even small proportion of his paper wealth, he'd soon be in real trouble. Almost all of it comes from his share in the ownership of Tesla and SpaceX. The money you see him using to buy elections and cheese hats mostly comes from bank loans collateralised on his shares. If he needed to raise a significant wedge to pay an annual tax bill on his share value, he'd have to start selling his stake. Imagine he wasn't a total ◊◊◊◊◊◊◊ ◊◊◊◊: would you want somebody to lose control of a company that they built to pay a tax bill?

I agree that the ultra wealthy need to be taxed more, but taxing the value of assets is not the way to do it and you need to recognise the significant problems with it.
 
When a billionaire can spent $250 million to get a President elected and another $250 million to try to rig a judicial election in Wisconsin, I have a hard time with any argument against taxation that's based on liquidity problems. These people manage to have liquid assets whenever it suits their purposes. The effect is that they are able to participate in the overall market to a greater extent, and with a significantly lower tax burden, than ordinary people. And therefore the argument comes down to not wanting to be forced to liquidate assets to pay taxes, which boils down further to, "I don't wanna pay taxes."
 
it's a realized gain if you can leverage it for material gain. they ended up with so much more than anyone else, in some cases like musk they've openly lied and cheated. even in other cases, if it's all completely above board, it's taken too far and you've found a way to game the system. it's not like we are obligated to respect that.
 
Ivor the Engineer said:
It's a classic play by apologists for the ultrawealthy to introduce forms of wealth that are more complex to value to pretend that taxing wealth is just too difficult to distract from the fact there are plenty of assets that have a value that is not difficult to determine.

Use the price paid for an asset as the basis for the tax value. E.g., land, buildings, private jets, super yachts, cars, jewellery, etc. Valuations required every few years at the expense of the owners of the assets. Use the amount an asset is insured for as a basis of its value. Have huge fines and jail time for people involved in setting up, operating and using corporate structures to obfuscate personal ownership of wealth. Taxable value of shares based on a 5 year rolling median. Equalise capital gains tax with income tax.
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Also, maybe set a minimum floor tax at some x percentage points of net worth. Subject to a fairly high level of net worth.
 
The Great Zaganza said:
If you can profit from it, you should be paying taxes on it.
It's not a complicated concept.
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That's a loophole right there, though. That might, in part, be plugged by introducing a floor tax rate calculated as a percentage of how much you have. Subject to a fairly high level of how much you have.
 
jeremyp said:
Hmm,I think this can be classified as poisoning the well. People who point out the difficulties of taxing wealth are not necessarily apologists for the ultra wealthy - they are just being realistic.



There are two problems I can see here. The first is that, as soon as you decide to tax people's assets, you'll quickly discover that the ultra rich no longer have any, any more than they have currently an income. One thing that ultra rich people do have apart from super yachts and private jets is very good tax lawyers and accountants. Whatever resources you put in place to try to tighten the loopholes, Jeff Bezos can afford to pay more to find new loopholes.

The second problem is exactly what do you tax? Are you proposing to levy an annual tax based on a percentage of the asset's value? That, to me, seems somewhat unfair and problematic. If I come by an expensive house but don't have enough to pay the tax bill on it, I'll be forced to sell, probably at a knock down price, in order to avoid prison. This does already happen, of course with things like inheritance tax, but it will happen much more frequently and it will affect the less wealthy disproportionately because they are less likely to have the liquid assets to cover their tax bills.

Stocks and shares would be particularly problematic because a tax on simply owning them (as opposed to selling them) will almost certainly crash the stock market. Who would want to own shares when they have to pay the government every year just for the privilege of owning them?

If you tried to tax Elon Musk on even small proportion of his paper wealth, he'd soon be in real trouble. Almost all of it comes from his share in the ownership of Tesla and SpaceX. The money you see him using to buy elections and cheese hats mostly comes from bank loans collateralised on his shares. If he needed to raise a significant wedge to pay an annual tax bill on his share value, he'd have to start selling his stake. Imagine he wasn't a total ◊◊◊◊◊◊◊ ◊◊◊◊: would you want somebody to lose control of a company that they built to pay a tax bill?

I agree that the ultra wealthy need to be taxed more, but taxing the value of assets is not the way to do it and you need to recognise the significant problems with it.
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To address just one part of this, the taxing the house thing. Further to my two comments just now.

That's unfair if you're just moderately well off, sure. But if you're someone that lolls around in an estate valued at, say, a hundred million, whether earned or inherited, then there's nothing unfair in requiring a tax floor of, say, a half per cent of that asset value. Even if it means having the guy monetize that asset at a loss to pay tax.

Again, only for the wealthy. Not just the moderately well off.
 
The Great Zaganza said:
Traditionally, there would be a 100% inheritance tax: conservativea are always so eager for people to pull themselves up by their bootstraps, we should oblige them.
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I believe that high inheritance taxes were the reason for 'family trusts' to be created.

No money/property changes hands when someone dies, the property is owned by the trust in perpetuity.
 
Punitive taxation serves nobody and nothing. I'm all for plugging loopholes misused by the unscrupulous, and also for ensuring that the wealthy --- not just middle-class well to do but actually wealthy --- never get to go untaxed or barely taxed, citing (low or lack of) income. But going for very high tax rates serves no good purpose.
 
novaphile said:
I believe that high inheritance taxes were the reason for 'family trusts' to be created.

No money/property changes hands when someone dies, the property is owned by the trust in perpetuity.
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Should be completely outlawed, along with all inheritance outside spousal if their wealth was genuinely shared - allow something like a up to a £1000 for sentimental objects - which also should have been given away before death but I'm not completely hard-hearted. If parents want their kids to inherit their wealth they need to give it to them before the parents die and of course the kids must pay tax - at their income tax rates - on all those gifts.
 
Chanakya said:
Punitive taxation serves nobody and nothing. I'm all for plugging loopholes misused by the unscrupulous, and also for ensuring that the wealthy --- not just middle-class well to do but actually wealthy --- never get to go untaxed or barely taxed, citing (low or lack of) income.
But going for very high tax rates serves no good purpose.
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Why doesn't it?
 
novaphile said:
I believe that high inheritance taxes were the reason for 'family trusts' to be created.

No money/property changes hands when someone dies, the property is owned by the trust in perpetuity.
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You are going about this the wrong way: start from the Goal, not the path.

Step1: social consent that any assets for the benefit of an individual beyond X ( for example $100 million) is detrimental to Free Market equality and social cohesion.
Step 2: tell those richer than that to distribute the assets or have them distributed.

Done
 
Darat said:
Why doesn't it?
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1. Incentivizes tax evasion.
2. Disincentivizes wealth creation, beyond a certain level of accumulation.

So, serves no good purpose, in terms of specifically addressing tax evasion by creative misrepresentation of income, which is what I was commenting on.
 
Chanakya said:
1. Incentivizes tax evasion.
2. Disincentivizes wealth creation, beyond a certain level of accumulation.

So, serves no good purpose, in terms of specifically addressing tax evasion by creative misrepresentation of income, which is what I was commenting on.
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the same logic applies to criminalizing murder.
 
The Great Zaganza said:
the same logic applies to criminalizing murder.
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Not sure I understand.

I thought we were talking about how we might address the tendency of the unscrupulous rich to evade income tax via creative accounting. Certain measures were suggested, to which I added a floor rate calculated per cent of NW, that will not apply if income tax exceeds this amount.

But this floor rate works only if the rate is fairly low. For those two reasons.
 
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