Income tax is not enough, we need to tax the assets of the wealthy

[Hugabear]

We all know that there are all sorts of methods that the wealthy and large corporations have of lowering their tax burden, plenty of loopholes that exist to shelter their massive wealth. How about, rather than merely going after their income, taxing their overall wealth? Tax what they're worth, not just how much they've made in any given year. Technically, a billionaire could stop earning money and not have to pay any more taxes for the rest of his life, simply living on what he's already accumulated. Set an arbitrary amount - could be ten million, fifty million, hundred million - and then anybody who is worth that much and over, pays a tax based on their overall worth. That includes their monetary wealth, properties, stock holdings, etc.

[slackmaster]

1. Please cite the Constitutional basis for your suggestion

What part of the Constitution do you believe gives the federal government the power to do that?

[DrDan]

2. ridiculous

so you support the continued taxing of the same assets year over year over year.

Don't you think that is a bit over-the-top?

Tax their new wealth - once. That is fair.

[Hugabear]

3. For the richest of the rich, sure.

I don't have a problem with it.

[damntexdem]

17. No, I prefer the idea of taxing the same assets year after year after year.

That is fairest.

[cali]

4. huh? how does a billionaire stop having an income??

put all his/her money in a swimming pool or something?

[spanone]

5. one man's wealthy is another man's poor...p.s. the wealthy pay income tax too.

[DJ13]

13. No, most pay capital gains taxes on investment income

That is (still) only 15%.

[Statistical]

19. Only if held 365 days or longer.

[treestar]

6. There is a capital gains tax

Not to sound too much like a right winger, but no worries. They don't keep it under a mattress. If they invest it in stocks then the companies are running and paying their workers.

[ElmoBlatz]

7. I already pay something like that

Its called property tax.

[Make7]

8. Isn't that what the Estate Tax is for? ( n/t )

[dkf]

9. That is what an estate tax is for.

[One_Life_To_Give]

10. Wouldn't congress just create more loopholes in that

As is is now we tax earnings, investment income, interest income etc. Granted all at differing rates and with a variety of exclusions for this and that. What makes us think that Taxing Ford for owning Several Billions in Realestate Holdings (Factories and Land) would not lead to an exemption or loophole. And subsequent loopholes for buisiness related capital etc. As likely as not the people we would snag with the tax would be the couple that never spends their earnings. Instead of the mega-wealthy who will have loopholes written for them.

[sharesunited]

11. No, the answer is government owned enterprise. Profits are taxed at 100 per cent.

Start new businesses. Employ people. Give the private sector some real competition.

[ProgressiveProfessor]

18. And use taxes for working capital?

[sharesunited]

22. Taxes are used for the working capital of every defense contractor supplying goods to the Pentagon.

Such funds are barely laundered at all.

[ProgressiveProfessor]

26. You clearly are more clueless about business, including defense, than guns

I did not think that was possible

[sharesunited]

28. Hey, I didn't make the world. I just explain it.

[apocalypsehow]

31. Haaaa ha haaaaaaaa ha ha ha ha haaaaaa haaa ha haaa haaa ha ha ha ha ha haaaaaaa

Funny stuff.

[Rebubula]

12. No...

...we do not.

That is a silly idea.

If for no other reason is that the super rich would never allow it to happen. Do not fool yourselves, the people that you need to worry about are not the ones in elected office - it is those with the 10 digit bank accounts.

[mainer]

14. It would hurt those who save

So the guy who never goes anywhere or buys anything, who carefully puts all his money in the bank, would get it taken away from him by this wealth tax.

While the spendthrift who goes through millions of bucks and enjoys the good life doesn't get touched.

Huh. Yeah, that's fair.

[Lydia Leftcoast]

30. Who saves $10 million unless they have unusual sources of wealth?

Just exempt the first couple of million in assets, indexed for inflation.

[Statistical]

15. How about just close the loopholes.

The problem with tax code is it is too complex. Complexity = ways out. Make it simple.

Make dividends, interest, capital gains tax fee as long as total income (wages, bonuses, dividends, interest, capital gains) is below a threshold. Say $1 million annually (or $5 mil, or $10 mil).

NEXT FIX THAT NUMBER TO INFLATION. No further legislation needed. As inflation increases the threshold increases.

Above the threshold no need for anything complex.

Taxes = fixed % of all income. Say 30%. Now 30% may seem low but it is MUCH MUCH MUCH more than the rich are paying now because there will be no deductions or exemptions.

If you make say $1.5 million your taxes will be exactly 0.30 * $1,500,000 = $450,000. No ifs ands or buts. No complex schedules, no 37 page forms. No distinct between long form and short form. No capital gains, vs long term capital gains, dividend income, vs interest income. No roll overs, no hiding money away tax free.

Get rid of AMT and simply tax people above some threshold at a fixed rate.

[damntexdem]

16. Put their assets in a sling.

But who is the "we" who are going to accomplish this?

[begin_within]

20. There should be an alternative minimum tax for corporations, so they can't

get away with not paying anything.

[Odin2005]

21. I think that would be Unconstitutional.

It would need a constitutional amendment, just as with the income tax.

[WillyT]

23. See Illustration In Sig Line...

:shrug:

[Xithras]

24. In the short term, it would be great. In the long, a disaster.

Most of the super-rich have vast amounts of wealth in comparison to their annual income. If the taxation of the asset exceeded their annual ability to replace those assets, any second grader can do the math and tell you the result. Eventually, the assets are depleted, and the government services that depend on those taxes collapse.

Taxing assets has long been recognized as the easiest way to completely destroy the upper classes in this country. While that may sound good on the surface, it begs the question: Who pays for those services once the upper class is gone? And lest you think this is a theoretical question or a question for our descentants, there have already been analyses by various socialist groups to determine how long the U.S. could be funded solely on the backs of the wealthy. The median was eight years.

And then we become Somalia.

Besides, as others have pointed out, there's no legal basis to do so. The 16th Amendment, which is the basis of all U.S. tax law, only permits federal taxes on incomes. It's theoretically possible for a state to do this, but it would require a constitutional amendment to attempt it at the federal level. An amendment along these lines wouldn't stand a chance.

[blindpig]

25. K&R

It's a start. Then we expropriate the means of production.

Fuck them, we have endured a class society too long.

[gravity]

27. Just raise the income tax

Instead of all these other crazy schemes which have too many problems. Are you going to force someone to pay taxes if they owned stock that went down in value? Just because you own a lot of wealth either, doesn't meant you have the cash to pay the taxes either. They would have to sell their assets to get the cash, which they would already pay taxes on anyways because of capital gains.

[Alias Dictus Tyrant]

32. Wealth is frequently non-liquid

There are already problems with unrealized and non-liquid assets where you can owe more taxes than your entire net worth. It is relatively rare under the current tax code, but it does happen; it usually bites the inexperienced that don't know that you have to structure things "just so" to avoid that exposure. A tax on wealth would make this an every day occurrence.

The bigger problem is non-liquid assets, which in some types of business may be almost your entire net worth. Tech ventures already have big problems with this because the IRS demands liquid valuations but refuse to offer guidelines on how to invent them from non-liquid assets. If you had a tax liability based on such fictions, there would be no tech ventures in the US. That would be great for the economy!

What is the value of an asset that cannot be sold? The IRS can't answer this question in the limited cases where it currently comes up, I can't imagine trying to apply it to the entire economy. Their current answer is to structure your assets so that it never happens. If you are one of the unlucky souls who ends up underwater (i.e. have a tax bill that exceeds total liquidity or even realizable asset value) that is your problem, not theirs.

And then there is the other problem where the very act of liquidating an asset significantly reduces its value i.e. it is worth more in possession than it is in liquidation. What is the value for taxation purposes? And do other parties with their assets devalued by forced liquidations get to account for the aggregate devaluation by the very act of paying the tax bill?


A tax on wealth is idiocy. It isn't as though wealthy people have swimming pools full of money they can just hand over to the tax man.

[C_Lawyer09]

29. Disgusting, so we ignore our terrible tax code and all its loopholes

And home in on the rich to fix our problems? How about following through with simplifying and fixing our tax code. A start would be ensuring that corporations cannot create shell companies based on ficticious overseas addresses to avoid taxation. If you are going to suggest something like that, you might as well hit all the pork, campaign finance reform, lobbyists, etc. The reason I'm so much against what you suggest, is because it suggests that all whom are very wealthy have cheated the system at the expense of others. While this is sometimes the case, fixing problems with shotgun blast methods is not only innefectual, it is also unfair.

[maryf]

34. and indigence isn't unfair?

The idea is extreme, but something has to help equalize, and ideas are where we start to solve problems...

[maryf]

33. Something to equalize would be nice

No one should be living so well as some do, until all people at least have their needs met, not just their basic survival needs, but enough to allow all the relax, create, enjoy life to an extent...this is an idea, luxury tax, so that others aren't suffering... K&R