Ineffective tax policies have different direct harms than other ineffective policies. Wealth taxes frequently do not bring in enough revenue which is a significant problem.
Hm. I’d be interested in seeing anything backing that up. You’ve just broadly stated that “ineffective” tax policies don’t work well, and I feel that is sorta in the name. Is there any line of reasoning that would make “wealth taxes” ineffective?
I am not the parent commenter, but the argument for and against wealth taxes is a lot more nuanced than many people would originally think.
For one, a great deal of wealth in this country (the overwhelming majority, actually) is not money but takes the form of illiquid capital goods like real property and shares in companies. There is a real concern that people subject to tax just won’t have enough dollars in a bank account to pay for it, and forcing the sale of that many goods could render the markets illiquid as it wipes out the red side of the order book every April.
A potential way around this is if the tax can be paid in kind, similar to how wealth taxes were collected historically, such as in the Roman Empire. This could be stupid easy to administrate—a 1% wealth tax against companies can be enforced by just minting 1% of every registered company’s outstanding shares in new stock and then transferring it to the control of the Government. Though the downside is that this sort of tax is very indiscriminate and difficult to target towards certain demographic groups. While shareholders are largely wealthy individuals who would be the target demographic for a wealth tax, they aren’t exclusively so. Effectively that becomes a tax on holding shares in companies, which is a good, but not perfect, proxy for wealth. The drawback to collecting shares in kind is that the stuff that is raised is not really “revenue” for the state, in that it is not money that can be spent, and to liquidate it would incur significant loss for the state as well. Which is basically throwing wealth away. This wasn’t a problem when “in-kind” meant grain and barley that could be used to feed the army, but soldiers can’t survive on a diet of stock certificates.
I am in favour of large-scale wealth redistribution from the billionaire class to the working class, but doing so isn’t as easy as saying “You, billionaire, give me 1% of everything you got, cash.” I think a policy of combined high income tax, high capital gains tax, and taxing loans for personal expenses secured against shares as income is more likely to be effective.
They don’t because many know the history of wealth taxes and how frequently they get abandoned because they are ineffective IRL.
[citation needed]
“Trust me bro”
Man, if being ineffective stopped Dem policy, we’d have a lot less Dem policy.
Ineffective tax policies have different direct harms than other ineffective policies. Wealth taxes frequently do not bring in enough revenue which is a significant problem.
Yeah, they’re too low!
Hm. I’d be interested in seeing anything backing that up. You’ve just broadly stated that “ineffective” tax policies don’t work well, and I feel that is sorta in the name. Is there any line of reasoning that would make “wealth taxes” ineffective?
I am not the parent commenter, but the argument for and against wealth taxes is a lot more nuanced than many people would originally think.
For one, a great deal of wealth in this country (the overwhelming majority, actually) is not money but takes the form of illiquid capital goods like real property and shares in companies. There is a real concern that people subject to tax just won’t have enough dollars in a bank account to pay for it, and forcing the sale of that many goods could render the markets illiquid as it wipes out the red side of the order book every April.
A potential way around this is if the tax can be paid in kind, similar to how wealth taxes were collected historically, such as in the Roman Empire. This could be stupid easy to administrate—a 1% wealth tax against companies can be enforced by just minting 1% of every registered company’s outstanding shares in new stock and then transferring it to the control of the Government. Though the downside is that this sort of tax is very indiscriminate and difficult to target towards certain demographic groups. While shareholders are largely wealthy individuals who would be the target demographic for a wealth tax, they aren’t exclusively so. Effectively that becomes a tax on holding shares in companies, which is a good, but not perfect, proxy for wealth. The drawback to collecting shares in kind is that the stuff that is raised is not really “revenue” for the state, in that it is not money that can be spent, and to liquidate it would incur significant loss for the state as well. Which is basically throwing wealth away. This wasn’t a problem when “in-kind” meant grain and barley that could be used to feed the army, but soldiers can’t survive on a diet of stock certificates.
I am in favour of large-scale wealth redistribution from the billionaire class to the working class, but doing so isn’t as easy as saying “You, billionaire, give me 1% of everything you got, cash.” I think a policy of combined high income tax, high capital gains tax, and taxing loans for personal expenses secured against shares as income is more likely to be effective.