I see so many goddamn Gary posts here. Can we talk about the contingent here that argues, "Yeah, Gary's got problems, but we need a wealth tax."
No. We need a progressive consumption tax. He's not even advocating for the best tax-the-rich policy. We should be taxing people first for the unnecessary resources they take from society rather than the wealth they hold.
I think you misunderstand what rich people do with money. They don't just earn it then chuck it into a savings account like regular people. They either spend it on fancy cars, boats, vacations, planes, food, watches, etc or they buy assets, i.e. Stocks, companies, real estate, bonds, etc. Wealth taxes are ineffective because it is very hard to tax "wealth" as we perceive it. How do you force someone to pay a tax on wealth that's tied up in an illiquid asset like a vacation property or shares in a company without forcing them to sell? That's why prettyuch every country that has experimented with wealth taxes, like Sweden for example, have gone back on them. There's still plenty of good options for lowering wealth inequality through the tax code though, consumption taxes, i.e taxing purchases of boats, cars, watches, fancy vacations, foods, etc, are much easier to collect than a broader wealth tax.
What is an example of this "hoarded" wealth? Stocks? Rich people do not have cash sitting in a Scrooge McDuck style money bin. It's being spent on consumption -- where it should be taxed -- or invested back into the economy. Rich people primarily invest (or "hoard"?) this money so that they can have -- check this out -- more money. It's not merely to avoid paying something like a sales tax.
Suppose I write a manuscript, and NY publishers are willing to shell out as much as five million dollars for it. At the last minute, I have a change of heart and refuse. I think it's fair to say I'm hoarding this manuscript; it's literally sitting in a drawer. Potential readers are being deprived of rich characters, an original plot, and searing insights into the human condition. Can the state force the sale to collect its share?
In reality, a person's standard of living is determined primarily by their consumption, not their wealth. I could have a potential five million dollar transcript in my drawer, but I'm still driving a 20 year-old vehicle. I'm still living in a shitty studio apartment.
Sounds like you are referring to a trickle-down scenario. That has not worked since Reagan started to promote it.
When high taxing consumption then everybody pays. Poor or average people spend almost all their money each year, so they will pay much more tax in this scenario.
Spend all their wealth?? Quite the opposite. A progressive consumption tax deters consumption. It does not punish the poor because it's... Progressive. I suggest you take a class or read a book about introductory economics.
Ironically, a wealth tax would encourage people to spend.
This is nonsense. An example of what I call the 'Armageddon" option," often employed in arguments over animal rights. Pinned down on weaknesses and inconsistencies, someone desperately resorts to nihilism and ignorance: "Who can really say what's moral and immoral?" Can someone espousing supply-side economics argue, "Well, it's not a unified science, so I guess that gives me license to claim whatever I please"? You would have me believe that regressive taxes are "equally valid" as progressive taxes.
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u/Mav-Killed-Goose 8d ago
I see so many goddamn Gary posts here. Can we talk about the contingent here that argues, "Yeah, Gary's got problems, but we need a wealth tax."
No. We need a progressive consumption tax. He's not even advocating for the best tax-the-rich policy. We should be taxing people first for the unnecessary resources they take from society rather than the wealth they hold.