A question on the wealth tax.

[Dawson Leery]

How would the government prove what you own? While there are bank records and real estate titles, how can you prove ownership and/or existence of artwork, rare cars, bullion, jewelry, watches (the last three are easy to hide)?

[StarfishSaver]

1. In order to pass through inheritance, assets have to go through probate, a judicial proceeding

Failure to report assets in such a proceeding is a crime and can have serious legal consequences.

Of course, if someone is willing to take the risk, they can try to avoid probate, but that causes other problems - for example, legal transfer of ownership of these assets would be difficult (unless someone forges documents, etc.).

Also, "wealth tax" is a misnomer. This is a term created by the right wing to demonize taxes paid on inheritances. The accurate term is "inheritance tax."

[Xoan]

3. So until Bezos dies ...

[unblock]

4. There are some proposals to tax wealth on an annual basis.

You're correct as far as current federal law goes.

[Dawson Leery]

5. If a parent gives 10 gold bars to each child without declaring it in their will/trust,

the government cannot prove their existence.

If a parent physically hands over the bars, their existence cannot be detected by the government.

[StarfishSaver]

7. True

There's not much that can be done about that. But that also applies to things outside of probate - e.g., capital gains taxes, gift takes, etc.

[Dawson Leery]

15. The government sees those assets.

If you pay taxes, they see it.

[csziggy]

16. Gifts of up to $15,000 per year are not taxed at all

So if the wealthy wants to give that amount to each of their heirs - or anyone else - every year, they can with no tax consequence. So basically they can give away almost as much as minimum wage pays before taxes to anyone they want before they die. Too bad more of them don't.

[unblock]

2. That is an inherent problem of a comprehensive wealth tax

Some forms of wealth are easier to hide or to disguise their true value.

But a wealth tax may not be comprehensive and may tax only things like liquid stocks and bonds and maybe real estate. Real estate taxes are quite common even though there are problems assessing market value.

But yeah, a wealth tax would lead to some evasion by rich people shifting stocks to art and such.

No solution is perfect.

[Dawson Leery]

6. That is my opposition to the tax.

Also, stock gains are not realized until they are sold (capital gains should be taxes at the regular rate). It would be better to close the loopholes and raise the top bracket to 45% on all incomes exceeding a few million dollars.

You have 20 million in stock in 2007. In 2008, you would not have that 20 million or anywhere near it. In this case, does the government give you a deduction for the massive loss? How can one pay taxes (cash) on an asset that is not liquid (stock)?

[StarfishSaver]

10. You oppose the inhertance tax because some forms of inheritance can be hidden?

[unblock]

12. While we're at it, let's ban divorce because some spouses hide wealth

[Dawson Leery]

14. Having the IRS search through homes will raise constitutional issues

and privacy concerns. In all honesty, it does not concern the government if I have some gold bars, or not.

[unblock]

11. Yet millions manage well enough with real estate taxes

If they say my home is worth more, I have to pay more in real estate taxes every 6 months here even though we're not selling for years.

It's hard to imagine someone really being so wealthy and yet cash poor that they can't pay 1% or so on the increase in value of their investments.

And if they are that cash poor, they really ought to diversify a bit!

[Blanks]

8. If the federal government is serious about getting the wealthy to pay their fair share of taxes...

They need to have a program that helps municipalities collect property tax.

One argument against a wealth tax is that the wealthy don’t pay taxes on an increase in the net worth of an asset because if an asset decreases in value, then to be fair, do they get a tax cut?

However, if that asset is in the form of real estate, they would at least pay some of the increase to the county treasurer. I understand it’s a common occurrence that the wealthy stiff small governments on their property taxes. Doesn’t matter who ACTUALLY owns the property, if taxes are being paid on the property.

The problem with people (like Bezos) getting too wealthy should be solved through stiffer regulations on monopolies, mergers etc not a wealth tax.

Places that have tried wealth taxes have abandoned them because they’re not practical to apply. Calculating how much wealth someone holds in collectibles would especially be a nightmare.

[JT45242]

9. Abatements cause so many problems -- property tax not the solution

The other problem with the property tax solution on real estate is that big corporations like Walmart, Apple, and Amazon refuse to build somewhere without a sweetheart tax abatement deal.

For example, the local Walmart was given a twenty year tax abatement and the city had to agree to upgrade the roads and sewer around the store. So more money flows out but none flows in from Walmart. The threat was to move to the next 'burb over and let them give the deal. When the abatement is about to run out, Walmart will give the city two options -- extend the tax abatement or we will close the store as 'obsolete' and move to the next burb.

Amazon and Apple were given 500 million in tax abatements to buld facilities that will produce 500, yep count them 500, jobs. So, it would seem that the state of Iowa is OK with a million dollar per worker subsidy to two of the ten most profitable COMPANIES in the world, but not with $1200 a month to an unemployed INDIVIDUAL.

The list could go on and on, but this has been standard operating procedureof (R) counties, cities, and states to give tax abatements to megacorporations with nothing to the local community.

When I lived and taught in Ohio, these kind of deals cost the school district that I taught in about 10% of our projected budget (alomsot 2 million a year) so we cut teachers while Walmart and others raked in huge profits.

[fescuerescue]

13. We would need to have ALOT more audits

Of everyone.

It would't be hard to do. We just need a lot more IRS agents to go through homes, storage and safe deposit boxes to catch people hiding things.