Billionaires and Taxes

[The Great Zaganza]

We know that the Rich will go to extreme lengths to avoid paying any taxes, even if that procedure ends up costing more than the taxes would have; so asking for only a little as to not upset the precious snowflakes is pointless.

What IS the point is to establish what Society considers fair for the Rich to pay, and if they don't make their lives a social and legal hell.
Similar to making Murder illegal, even when it might be incredibly difficult to get a sentence against powerful and rich people to stick.

 

[Ivor the Engineer]

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.

I find they tend to make up or exaggerate problems.

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.

More reason to keep the rules simple to make sure any loopholes will be very small to non-existent.

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.

A wealth tax, like other taxes are calculated based on the value of all assets above a threshold. Stay below what would be a very, very generous threshold and there would be no additional tax to pay.

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?

People who only want to own less than the tax threshold? People who think the company is going to perform so well that the additional tax is worth paying? FYI many people pay fees of 1-2% for some city twat to "manage" their stock market investments. These fees have not crashed the stock market.

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?

Yes, I would want them to lose control of the company. I don't buy into in all the hype about visionary business leaders. Perhaps it would encourage businesses to share the wealth amongst their employees more fairly. I think the threshold for a wealth tax should be set at a multiple the median wealth, so business owners paying their employees better would allow them to acquire more stuff before being taxed on it.

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.

What do you propose instead?

 

[Chanakya]

We know that the Rich will go to extreme lengths to avoid paying any taxes, even if that procedure ends up costing more than the taxes would have; so asking for only a little as to not upset the precious snowflakes is pointless.

What IS the point is to establish what Society considers fair for the Rich to pay, and if they don't make their lives a social and legal hell.
Similar to making Murder illegal, even when it might be incredibly difficult to get a sentence against powerful and rich people to stick.

That's a much broader, and in effect a different, if related, discussion, though. Which is fair enough, what I'd addressed, in those posts, was just a subset of the larger thread topic.

Not getting into the details of that more involved discussion. Simply because it's much too involved. Many bits of that I agree with, with what you say, some I think I disagree with. A punitively high tax rate would be among the disagreements. Tax them, sure, absolutely: but not so much that they'd be fools to comply, or that they'd be fools to keep on taking the trouble to nevertheless.

Just, if you're looking at a floor wealth tax specifically to plug --- or at least, to go some way towards plugging --- the loophole of creative accounting around income, then, for that specific, it doesn't make sense to keep tax on NW very high.

 

[The Great Zaganza]

The point of a High Tax is to combat extreme wealth.
Once personal fortunes are less destabilizing to society and economy, rates can be reduced.
It is really mostly about taking money away rather than giving it to the State or others.

 

[Gulliver Foyle]

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.

Edit, this paragraph was meant to answer novaphile's post about family trusts: Fine then, if an asset is owned by a trust for a period of 30 years or more (edit: unless it be for genuine charitable purposes), it reverts back to the state, pro bono. And it doesn't matter where the trust is located.

Make not paying taxes a treason, and append the hostis humani generis status to tax havens and we're good to go.

 

[Hlafordlaes]

Apart from the above, any asset, physical or financial, that cannot be traced to taxpaying individuals using dubious Delaware/Panama doings should be forfeit in its entirety. Like the law of the seas; unclaimed assets are there for the taking, no exceptions. You want to own something? Pay your taxes. This alone would help keep rates lower by making collection far more rigorous.

The violation of environmental, labor and any other laws, either by intent or by repeated error, should serve to wave the protections offered shareholders, making their personal assets fully liable. This alone, if one supports the rule of law, would not only be fair, but would make for some extremely responsible and diligent boards of directors. Finally. Auditing firms would once again be back in the business of keeping companies on the straight and narrow.

No more Exxon Valdez's, baby. Them thar oil tanker captains would have a live video feed back to HQ under which their every move would be monitored. There ya go.

As for capital flight, the answer simply requires an honest US administration that could and would use its position in international bodies to strongly move toward unified standards, particularly regarding the tracking and reporting on financial assets, now in line with both measures above. Tax havens, such as the UK, basically acting as flag-flying pirates, should be sanctioned and barred from trade until limp and lifeless, or fully compliant.

 

[Ivor the Engineer]

The point of a High Tax is to combat extreme wealth.
Once personal fortunes are less destabilizing to society and economy, rates can be reduced.
It is really mostly about taking money away rather than giving it to the State or others.

Yes. Just metaphorically burning it would be good for society. E.g., less wealth to buy politicians with.

 

[Darat]

Thinking about it I suppose you could keep family trusts BUT any assets controlled by those trusts must be offered to everyone - so for example if it's a house then anyone can apply to live there for the peppercorn rent - if there are multiple people wanting it then it goes to a randomly selected person from the pool.

 

[Ivor the Engineer]

Apart from the above, any asset, physical or financial, that cannot be traced to taxpaying individuals using dubious Delaware/Panama doings should be forfeit in its entirety. Like the law of the seas; unclaimed assets are there for the taking, no exceptions. You want to own something? Pay your taxes. This alone would help keep rates lower by making collection far more rigorous.

The violation of environmental, labor and any other laws, either by intent or by repeated error, should serve to wave the protections offered shareholders, making their personal assets fully liable. This alone, if one supports the rule of law, would not only be fair, but would make for some extremely responsible and diligent boards of directors. Finally. Auditing firms would once again be back in the business of keeping companies on the straight and narrow.

No more Exxon Valdez's, baby. Them thar oil tanker captains would have a live video feed back to HQ under which their every move would be monitored. There ya go.

As for capital flight, the answer simply requires an honest US administration that could and would use its position in international bodies to strongly move toward unified standards, particularly regarding the tracking and reporting on financial assets, now in line with both measures above. Tax havens, such as the UK, basically acting as flag-flying pirates, should be sanctioned and barred from trade until limp and lifeless, or fully compliant.

I have an intuition that if we really looked we'd find that we aren't as wealthy as we think we are. I.e., if externalities were accounted for through tax or proper regulation, then a vast amount of trade would be unviable. For example, pretending plastic waste magically vanishes and is nobody's responsibility, particularly not the responsibility of the people who make the most profit from the products made of or packaged in plastic, is one of the cornerstones of the modern economy.

 

[Random]

I have an intuition that if we really looked we'd find that we aren't as wealthy as we think we are. I.e., if externalities were accounted for through tax or proper regulation, then a vast amount of trade would be unviable. For example, pretending plastic waste magically vanishes and is nobody's responsibility, particularly not the responsibility of the people who make the most profit from the products made of or packaged in plastic, is one of the cornerstones of the modern economy.

I personally have always thought that the fossil fuel industry was unprofitable, it just transferred its costs to "Mother Nature" and kept the cash. Not just the environmental damage stuff either. Think about how much time and land went into the creation of those fossil fuels before we dug them up. Millions of years of time and effort and we are burning through them in a few centuries. The economic struggles of biofuels sort of proves the point.

 

[Ivor the Engineer]

I personally have always thought that the fossil fuel industry was unprofitable, it just transferred its costs to "Mother Nature" and kept the cash. Not just the environmental damage stuff either. Think about how much time and land went into the creation of those fossil fuels before we dug them up. Millions of years of time and effort and we are burning through them in a few centuries. The economic struggles of biofuels sort of proves the point.

At the macro level humans behave no smarter than bacteria on a petri dish: we will consume all resources until there is nothing left to consume and then die in our own waste products. Perhaps we are just vessels for our microbiome after all!

 

[P.J. Denyer]

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.

As Roy Jenkins put it "Inheritance Tax is a voluntary levy paid by those who distrust their heirs more than they dislike the Inland Revenue"

 

[Trausti]

I personally have always thought that the fossil fuel industry was unprofitable, it just transferred its costs to "Mother Nature" and kept the cash. Not just the environmental damage stuff either. Think about how much time and land went into the creation of those fossil fuels before we dug them up. Millions of years of time and effort and we are burning through them in a few centuries. The economic struggles of biofuels sort of proves the point.

You don't drive a car and have never taken an airplane? Your local grocery store is stocked with goods by magic?

 

[Ivor the Engineer]

You don't drive a car and have never taken an airplane? Your local grocery store is stocked with goods by magic?

The earth is a closed system. To date all those activities have been achieved by running up debts. Only when the energy consumption of our activities can be met from the fraction of energy from the sun we can capture over the duration of those activities will they stand a chance of being sustainable. Even then, if our activities disrupt the systems that we (ignorantly) depend upon to keep us alive, then humans are still screwed.

 

[Trausti]

The earth is a closed system. To date all those activities have been achieved by running up debts. Only when the energy consumption of our activities can be met from the fraction of energy from the sun we can capture over the duration of those activities will they stand a chance of being sustainable. Even then, if our activities disrupt the systems that we (ignorantly) depend upon to keep us alive, then humans are still screwed.

The use of fossil fuels have been an enormous benefit to humanity. It has helped raise millions if not billions of people out of miserably poverty. The gloom and doom predicted for so many years has yet to come to fruition; but humanity will be fine even if global temperatures rise. Obviously, that would increase the growing seasons in currently cool climates. And the trade off would seem worth it rather than return to the grinding global poverty that existed before.

 

[theprestige]

The earth is a closed system.

No it isn't. If it were, it would have succumbed to entropy eons ago.

The earth system is open to energy input from a certain nearby star, which obviates your appeal to closed-system constraints.

 

[ahhell]

No it isn't. If it were, it would have succumbed to entropy eons ago.

The earth system is open to energy input from a certain nearby star, which obviates your appeal to closed-system constraints.

Ivor even points that out in his post, its a closed system except for the input from outside.

That being said, he has a point. At some point we will run out of fossil fuels and fissionable material at which point we will have to figure out how to tap into the sun effectively. Which, we are on our way towards. It's the old techno-optimists versus techno-pessimist thing.

There is an argument that I don't really engage in anymore on account of the underlying assumptions of folks are often just different so what is there really to argue about.

Some folks think the purpose of taxes is to raise revenue, some folks think the purpose is to raise revenue and engineer society, they often seem to think raising revenue is a secondary purpose. Once that disagreement is established, what's there to argue about?

 

[Random]

The use of fossil fuels have been an enormous benefit to humanity. It has helped raise millions if not billions of people out of miserably poverty. The gloom and doom predicted for so many years has yet to come to fruition; but humanity will be fine even if global temperatures rise. Obviously, that would increase the growing seasons in currently cool climates. And the trade off would seem worth it rather than return to the grinding global poverty that existed before.

For generations, our unofficial policy regarding fossil fuels has been:

Step 1. Dig up and burn carbon to create lots of cheap energy.
Step 2. Use this cheap energy to create enormous amounts of wealth and prosperity.
Step 3. Die of old age before the negative consequences of Step 1 catch up to us.

Well guess what? Our newest generations are looking at the math and are realizing that Step 3 isn't going to work for them. This is a problem as, if you look at the plan, Step 3 does a lot of the heavy lifting. We are looking at massive shifts in the climate which, at best, will require very expensive adaptations. Saying that some areas will have longer growing seasons does not change the fact that other areas will lose all their arable land, or that we can look forward to more frequent and more destructive weather events.

 

[dirtywick]

there's the ocean too

 

[The Great Zaganza]

Taxes should take revenue from where it will have the least impact on the economy - that means from the people who have so much that the taxes won't impact their standard of living.
Taxing the rich is the best for the economy.