It's exactly the opposite: the super rich don't just have all their wealth in assets, they have far more than all their wealth in assets. They buy real estate using mortgages just like everybody else. They are billionaires in net worth, but their debt is usually much bigger than the sum of their cash-equivalents. They win from money devaluation just like any poor mortgage serf, just magnified by some trailing zeroes. Printing money taxes the guy with the savings account and nobody else.
No, inflation concentrates the wealth into the hands of the government, banks and the wealthiests, not the people. This is called the Cantillon effect.
exactly, because in the end the idea is to increase taxes for everyone. But hey, lets lower the bar of the super rich to those who own a car or a house or those who travel by plane or those who eat meat....
Everyone will want the threshold for the 'wealth tax' to be their wealth + $1, even better if the Smiths next door with all their vulgar displays of wealth are hit by it.
I on the other hand with my $1 lower wealth am an average humble common man of the people.
An interesting thought experiment for me is to imagine a wealth tax in the 0.1 to 0.5% range and figure out if the difference is might make to the different groups.
I'm a firm believer in incremental changes and experiments which is of course hopelessly politically naive.
Often a problem in politics is that people are pretty inelastic when it comes to what they want changed. They want a program fully funded or not funded, a tax issued or no tax at all. A small wealth tax will be seen by foes as a stepping stone to further overreach, and proponents won’t want to fight the same fight again later to get what they feel is owed now.
Your naïveté is not the problem, but rather partisanship means we can’t have nice things.
The core problem is how you define and observe wealth. It is not like income, which is a transfer that can be observed directly.
It becomes not dissimilar to the "Window tax" (not the bill gates kind) https://en.wikipedia.org/wiki/Window_tax - a form of daylight robbery where people brick up windows of their houses.
Why not just ask the taxpayer to identify the value of all their assets, with the condition that they must sell to the government at the price given, if requested?
Note that in practice income is also quite complicated to pin down in tax law.
Why not allow me to sell at the price the government insists it is valued at?
Many people that live in locations with property tax would very happily sell their property at the "assessed" value rather than sell on the open market for a fraction of that price.
Obviously that is before we get into the various ways to obscure ownership of trivial things like planes and yachts that is already done for various reasons.
> Many people that live in locations with property tax would very happily sell their property at the "assessed" value rather than sell on the open market for a fraction of that price.
Citation needed. Assessed values are generally lower than market value. Furthermore, there's a growing set of data which suggests that, in many places, lower-value houses are assessed at a higher percentage of their market value than higher-value houses[0] -- that is, assessments are regressive.
Vermont Supreme Court Reaffirms Rule that Sale Price Is Not Necessarily Conclusive in Determining Property’s Fair Market Value
The appellant, Gabriel Martinez, purchased a single-family dwelling built in 2000 for $350,000 on May 5, 2017. The previous owner had purchased it for $252,000 five months earlier when its assessed value was $433,000. A 2017 town-wide reappraisal – which took place while the appellant’s purchase was pending – set the property’s grand list value at $483,400.
It is a solved problem in another countries. It does require assets reporting to IRS, but that's it. It is very easy for publicly traded assets, which solves most of the issues.
"Wealth tax" already exists. This can be found in Islam.
Muslims have an obligatory charity called Zakat, 2.5% of your standing wealth (if you meet the threshold) directly goes to the poor. This includes what is in your bank account, savings, stocks and shares or investments you intend to sell.
You do not even need to experiment on it. Just look at any country where the wealth tax is implemented since many years, e.g. Switzerland. The solution is on the table, take it as it is and then make some tweaks.
If we are to tax people because they benefit from public services, then poor people should be taxed more than rich people since they benefit from those services more.
No rich people benefit more. They rely on the rule of law in a nation state to protect their assets and provide a supply of goods and services. And they don't pay much for it (in percentage terms definitely).
Rich people can hire private security. Poor people can't. In terms of raw numbers, law enforcement's job is to protect poor people from other poor people.
> They rely on the rule of law in a nation state to protect their assets and provide a supply of goods and services.
Which as a result let their companies prosper and that benefits the employees.
> And they don't pay much for it
Not true
> (in percentage terms definitely).
Why would it matter?
"Why would it matter?". There are many historical and current day examples of the problems in societies with very high wealth inequality.
I don't want to live in a dystopia with _untouchable_ hyper wealth individuals so I believe that governments should make it very hard to stay a billionaire and virtually impossible for people to inherit that level of generational wealth from their family.
I am very keen for levels of taxation (and the closing of all the loopholes) that would force billionaires to liquidate significant percentages of their assets to pay taxes as I think it will encourage them to work a bit harder. After all if they managed to become a billionaire once they must be very clever, right?
> I am very keen for levels of taxation (and the closing of all the loopholes) that would force billionaires to liquidate significant percentages of their assets to pay taxes as I think it will encourage them to work a bit harder. After all if they managed to become a billionaire once they must be very clever, right?
Even almost all their "assets" are stocks in the companies they created? Would the idea be that the founders of these companies should lose control over them?
They would only lose control if they were incompetent and it was just luck that put them in control in the first place.
The suggested wealth tax is 2%. I have no concerns that a billionaire capable of creating a multi billion dollar business would have any issues raising $20 million per year to sort out their tax bill.
Are there any billionaires you're worried about in particular?
No, governments are not piggy banks, you don't get out what you put in. People pay taxes for the general betterment of the country and everyone benefits from a stable country with a healthy population, which are things you can't really place a monetary value on.
"Everyone benefits from the public services Taxes fund, even the super wealthy."
That is somewhat debatable. Not all taxes go to universally popular public services. Special interest lobbies are strong everywhere, so you always end up funding a bunch of rent seekers.
This is the eternal problem of the public purse, not that different between modern democracies and eunuchs of the Ming dynasty: someone's else's money gets stolen a lot.
I live in one of the most highly taxed countries on planet earth and what my taxes mostly do is go from my pocket to either an unsustainable pay-as-you-go defined benefit pensions regime that nobody wants to reform into a market based defined contribution regime since that would make apparent the underlying weakness of our economy or the money goes to structurally poor regions where it disappears forever because nobody wants to take hard measures to reform governance in those regions. sorry to break your bubble but high taxation is not inherently good or bad, depends wholly on the governance, and the governance tends to the bad
Edit: note that many countries would fit the description; at least I know the Flemish are complaining their taxes burning up for nothing in Wallonia and Madrid/Barcelona complaining their taxes disappearing for nothing in Andalusia etc, West Germany in East Germany, but I guess every country has this issue at least at some level.
I’m sorry I don’t want to dox myself nor spend my time arguing with people who just googled “how does X country benefits system work” on HN
I think you can easily see from the replies to my comment however that this sentiment is widely shared across europe, which is indeed reflective of the fact that our economic malaise and lack of policy to address it is an EU wide phenomenon
The first point makes sense. But your contributions to this discussion is significantly hampered by that choice. Perhaps start a throwaway account where you can share more specific links and examples.
If this is a subject that you think is important then make an effort.
Anecdotally there are articles such as https://ec.europa.eu/social/main.jsp?catId=89&furtherNews=ye... claiming that "half of Europeans support higher taxes" although in the breakdown it also counts taxes paid by others, which is of course easier to support as an individual. But I also can't find a source claiming that Europeans are "widely" unhappy with the taxes they paid and what they get in return.
Obviously HN users are not representative of the wider population, because of a bias towards higher-income brackets.
s/even the super wealthy/especially the super wealthy/
The wealth of the wealthy depend a lot on the infrastructure build from tax money. E.g. they don't build nation-scale road networks, but would make much less profit if these were absent.
> Taxation is not "taking things from people". Everyone benefits from the public services Taxes fund, even the super wealthy.
Of course it's taking things from people. You might say that it's worth it, but that's nothing to do with the mechanism.
Having worked with the public sector a bit, it's incredible how much money is constantly wasted. You see public services and think all the money is spent efficiently on them, when it's just constantly spent on everything. £20k meetings to decide whether or not to spend £10k. Making sure your budget is always fully spent so you can get the same next year, even if you don't need it now and won't need it next year. Every day in every department in every government, multiple people's whole lifetime of taxation is wasted.
The mentality is totally different when your customers go to jail for not paying you.
Oh man, you should see how much money is wasted in private corporations. How many start-ups take millions of dollars and deliver nothing. There always be some percentage of money lost, like there always be bugs in our software.
They are spending their own money. They aren't wasting other people's hard-earned money. VCs and other funders know the risks and take them anyway. That's why upping taxation to those who take big risks and they pay off is bad - they'll just stop taking risks and things will stop improving.
No, private companies are spending their customer's money. If they spent less, costs to the customers would be less. All our fancy offices, high salaries and bonuses need to be paid for and in my company this is partially by selling legally mandated services that people have to purchase.
The regular claims "taxes stop x,y & x" be it risk taking, R&D, investments or whatever, don't seem to actually have much consistent evidence. It's yet another economics theory, most of which are more opinion than proven rules.
What seems to make the biggest difference is the stability of markets and perceived benefit. When tax rates are consistent or even declining, risk taking & investments drops when the economy is uncertain. If a company thinks there's money to be made, they're not going to sit back and do nothing based on if the tax they pay on that is 23% or 25%.
> No, private companies are spending their customer's money.
No, their customers' money went on value received, not on internal projects. However you're not entirely wrong: they're spending money that could go on salaries, lower prices, or shareholder dividends.
Thus they have three incentives not to waste, as if they do it too much a competitor will beat them.
The public sector doesn't have this incentive, as it can just lock people in a box if they don't pay it money.
Thank you. I see the same across the Channel, in a country addicted to public spending and government control.
Private companies come with safeguards: competition and the need for profitability (which is just sustainability anyway). When the natural balancing forces of the market are skewed, obviously inefficiencies will arise and people will pay the price for this.
You might not have meant it this way, but such phrasing is a dogwhistle for fervent capitalists.
Usually the saying is: "If the damned government would just get out of the way and we had unfettered capitalism we would have enormous growth".
The issue with Capitalism (as many economists will tell you) is that it causes monopolies, in fact the game monopoly was designed to teach exactly this.
Growth is not by-in-itself a good thing for most people, it typically is because wealth generally gets distributed a bit; however countries like the UK (which is a rich country by most metrics) has a lower QoL for a common person than Estonia does despite Estonia only having a fraction of GDP per capita relative to the UK.
Wealth naturally centralises in a closed capitalist system; regulation is the only force that stymies that.
If wealth is too concentrated then growth is meaningless to the majority.
Isn't the government also a monopoly? Can you really get rid of it and its corruption by just voting? What about state monopolies when they become inefficient and debt ridden, and can just _forbid_ competition?
No private monopoly is forever, whether it's the Hudson's Bay Company, the East India Company, GM, Kodak, IBM, you name it. All those empires fell because eventually there will be more innovative offers from lighters, more agile competitors.
Government monopolies are much harder to get rid of.
Governments are designed primarily to serve it's citizens and not the needs of shareholders or profit. They are designed additionally to prevent externalising of costs to some third party. IE; forced servitude or significant harm to the population while chasing profit.
Your same statements could be reflected inward of course: British empire, the several thousand peaceful transfers of power that come and go without fanfare and of course very violent revolutions that pass with very significant fanfare and attention.
A seated government, especially a democratically elected one should be capable of serving the needs of people, however governments are made of people and the smaller the government is the easier it is to buy it off. - The smaller the government, the easier the corruption. (which is why "small government" capitalists always end up embroiled in corruption scandals eventually).
The EU population pays a lot for national defence and safeguarding of 'things'.
Imagine Switzerland bordered Russia... would they spend more or less on national defence? Does that mean that the EU is subsidising the defence budget of the country with the highest average wealth?
So American tax payers are subsidising your security costs? NATO has benefits and costs. Some of the costs are financial and some are political. All of that has to be figured in when you are talking about how the super-rich benefit greatly from the current situation and do not pay proportionally
uhm yes american tax payers absolutely do subsidise european security? this isn’t a new fact for you surely? one of the bigger reasons for this is that europe simply doesn’t have the economy to maintain anything even close to american spending levels. but even as a percentage of gdp most european countries are simply behind
We are talking about taxing the super rich in the EU to pay for a service (defence) that is currently paid by other people.
I agree with you that the economies of most EU countries cannot sustain US military spending levels.
My theory is that since the rich people in those EU countries are amassing wealth at a faster level than the economy is growing then we should use some of that growing wealth to ensure that the economy (and country) are properly defended. Also use the funds for education and infrastructure.
What is "EU population"? There's no EU defence budget. Most of the protection from Russia is financed by a few bordering countries (mostly Poland). The rest of the EU is way under it's 2% GDP required by NATO, so not sure if Switzerland has much to thank for.
this slogan is meaningless. economic growth is pretty meaningful and material for me - it means a possibility of retirement for me, a world with jobs, comfort and prosperity for my children. there are plenty of countries on this earth that will let you in to experience their lack of economic growth if you want to see what the alternative is like
It used to seem obvious that infinite economic growth on a finite planet was impossible.
But after watching the money-printing and inflation of the last few years, maybe the numbers really can keep on rising forever even if meaningful economic activity doesn't increase.
I hope this is the beginning of the pendulum swinging back towards a more sustainable tax regime. A lot of people forget - or pretend to forget - in the "golden age" of america's great works, the top tax rate was above 90%! And somehow all that innovation and wealth creation still managed to happen (and is now all beginning to fall apart).
I'm not advocating for a return to those levels, but right now the truly rich effectively pay no tax at all,basically a result of regulatory capture at the individual level. Hopefully, this is the first step in that finally beginning to swing back in the other direction.
Tax rates are meaningless signalling to low-information voters. The real devil is always in the loopholes. In practice, American tycoons never paid 90 per cent taxes, not even half of that.
You're missing the point. Saying that once upon a time taxes were 90% and it was fine is wrong because there were ways round it. Therefore there is no historical evidence that this level of taxation would be a good idea.
Oh, you are correct I did miss the point thank you. It would be great to have correct data on how much taxes are actually paid in practise during this period. (And, to increase funding for regulatory bodies to close tax loopholes)
If your own point is that it's good to have historical evidence before we annihilate the motivation of anyone trying anything particularly risky in the name of creating a better product or service, then is closing those loopholes and raising tax to 90% the best idea? It's child's play to think of what would happen if we spent more money on cleaning buses, for example, but what won't be invented or improved if we do this? What's the downside?
I'm not advocating any specific high-end wealth tax rate, but I think at the moment they are very low. I think it would be interesting and relevant to future policy making to have historical data about which such tax rates have worked in the past. Wealth inequality is currently a huge problem in the world, and as far as I can see any kind of arguments against tackling it such as 'we'll miss out on innovation' are capitalist propaganda. This is why it would be good to have accurate historical data to respond to these kind of arguments.
I've reread my post that you responded to and when OP says 'tax rates are meaningless signaling to low income voters because no one pays these rates', my response is 'taxes should be better enforced so that people do indeed pay the stated rates'.
> Wealth inequality is currently a huge problem in the world
This is a problematic statement. Wealth inequality is not a huge problem. If we removed all the billionaires, people who are currently starving or unable to get clean water would still be in the same situation. Getting the base level of human condition up is the important thing, and it generally occurs much more in systems that are not trying to crush people who create vast amounts of value.
> as far as I can see any kind of arguments against tackling it such as 'we'll miss out on innovation' are capitalist propaganda. This is why it would be good to have accurate historical data to respond to these kind of arguments.
I don't see why this is the case. If you let people take more risks and try more things, with commensurate value exchange to the value they provide, then more things will appear. That's just normal.
You can see it in the small even - if teams are allowed to fail and succeed by taking risks, then they will take some risks. If they are never rewarded for succeeding, or even punished for succeeding, then they will never try.
The capitalist promise is something like, 'you don't need to enforce social responsibility on us because when we get rich enough there'll be enough wealth and we will just share it anyway of our own accord'. Maybe in the 1800s or earlier then it could have been reasonable to believe this, but in the current world climate it hasn't happened. Wealth inequality is at the highest it has ever been. The purpose of the existence of government historically was to combat this problem.
If you don't see why wealth inequality is a problem then look at biodiversity for example. It's generally accepted that wider biodiversity is better for everyone, and efforts to conserve a wider range of diverse species rather than a smaller number of better adapted species are encouraged. Now apply this reasoning to businesses. If wealth were redistributed better that would mean more chances for people of the lower end of the spectrum to innovate and produce small businesses which would lead to wider diversity and resilience in the economy. Which ties in with your small team example.
As for 'capitalist propaganda'; for example, considering higher wealth tax rates for the top end as 'crushing those who generate wealth' is pretty clearly capitalist doctrine to me. It's the kind of narrative that wealthy people in positions of power sell so that they don't have to redistribute that wealth. I agree with you that people at the high end should have incentives to innovate and I am not advocating communism. However as far as I can see, with properly globally enforced taxes at a higher rate for top end wealth there would still be plenty of incentive for these people to innovate.
> The capitalist promise is something like, 'you don't need to enforce social responsibility on us because when we get rich enough there'll be enough wealth and we will just share it anyway of our own accord'.
No it's not. It's "people should make free agreements with each other as much as possible, as this will motivate far better resource allocation than a centralised monarchy or bureacracy ever could."
> The purpose of the existence of government historically was to combat this problem.
Blimey, no. The purpose of government was to do what the monarch said, collect taxes, etc, and later, for a few countries, to do what the elected leader said. Governments predate capitalism.
> If wealth were redistributed better that would mean more chances for people of the lower end of the spectrum to innovate and produce small businesses
This doesn't have to be true. There are lots of chances already to create small businesses. The main blockers are bureacratic processes that make it hard to establish and compete, not billionares.
Redistribution itself is a slippery concept, but let's say that Elon Musk gave a load of his wealth (not money, wealth) in the form of Tesla shares to people so they can start small businesses. What would that actually mean? Who would buy those shares if a bureacrat can choose to steal - I mean ,redistribute, them at any point?
> with properly globally enforced taxes at a higher rate for top end wealth there would still be plenty of incentive for these people to innovate
This is a very leaky statement in practice. Bureacrats are not good at designing overbearing tax systems that retain innovation. We're more likely to stop needing good resource allocation (e.g. somehow we crack cold fusion) before bureacrats get good at not starving their populations to death from bad central policies.
What you're telling me is a more explicit part of the capitalist promise. My statement is absolutely part of it too.
Governments predate capitalism. They don't predate wealth inequality. Part of the purpose of the original formation of governments was to tackle wealth inequality in a feudal system.
One of the things that stops people at the lower end from innovating and forming for example small businesses is lack of resources. Redistributing wealth would allow mean more resources available to wider range of people. I'm sure improving bureaucratic processes for small business startups is also great thing to do.
I have a PhD in particle physics and I think that cold fusion is basically completely unviable in any situation. I may be proven wrong. I agree that taxation is a complex problem to solve, which is why I was advocating allocating more resources to this earlier on. 'Rich people who have far more resources than they have any need for and live wildly extravagant lifestyles don't need to redistribute any of their wealth because one day we'll crack a high yield problem and everyone will be able to be wealthy' is a very dangerous viewpoint as far as I'm concerned. It's clear that the current stable climatic state that our planet sits in is becoming strained by human economic activity, and the capitalist promise of 'there will always be more' is becoming more complex to fulfill. There is a clear solution which exists now, and it is to redistribute wealth.
I don't think we'll likely to come to any kind of agreement about these topics so I'm going to leave this conversation here.
> I think that cold fusion is basically completely unviable in any situation
So do I.
> Rich people who have far more resources than they have any need for and live wildly extravagant lifestyles don't need to redistribute any of their wealth because one day we'll crack a high yield problem and everyone will be able to be wealthy' is a very dangerous viewpoint as far as I'm concerned.
It's a bad idea to base your emotional conception of capitalism on so few people they don't matter to the system. In fact, it's a bad idea to have an emotional view of an economic system in general. But I think this is also false.
(If you just want to say "steal" but use the word "redistribute", you'd be in plentiful company, but I'm assuming by "redistribute" you mean "tax".)
Whenever anyone spends money, it's repeatedly taxed. It's taxed with VAT (UK-specific, but this adds 20% to the purchase price already). It's taxed because of all the fuel tax paid to get the good/service going. It's taxed with all the income tax paid to the people who made/supplied the thing. It's taxed with the employee tax (National Insurance in the UK) for those employees. It's taxed via the corporation tax paid by the company that supplied it. So much tax is paid on every good.
Additionally, governments inflate currencies, so governments can tax savings by devaluing them.
Talking as though none of this is present, and we're somehow in a world where barely any tax is paid seems beyond ludicrous. So much tax is paid, at every level, all the time.
> It's clear that the current stable climatic state that our planet sits in is becoming strained by human economic activity, and the capitalist promise of 'there will always be more' is becoming more complex to fulfill. There is a clear solution which exists now, and it is to redistribute wealth.
We already tax people. If you think this is a clear soluton to the climate, you might need to elaborate as to why that is.
When I talk about the richest people living extravagant lifestyles I need to tone down my emotions, but when you talk about them being crushed by the weight of taxation you don't appear to have made an effort to do so yourself.
I think people who are emotionally biased against people with this much money often do want to crush them. That's why the phrase "eat the rich" exists.
I'd like to see how the "real tax rate" for each bracket has changed over time, if there were any way to arrive at such a number. It'd be difficult to fairly account for all the accounting tricks/loopholes, subsidies, and quid-pro-quo to arrive at some net burden comparable between time periods.
It's complicated because it varied a lot by the situation of the taxpayer. Like multinational wealth is harder to tax than stuff physically located in one country.
While this is a good point, evidence suggests that the tycoons did pay much more than they currently do on taxes, about 45% in the 50s and 60s: https://www.latimes.com/business/la-fi-nocera-tax-avoidance-.... If we aim for 90 and get 45, I think that's much better than aiming for 27 and getting 0 as we have today.
It also seems that this was the time where many loopholes were invented. I think it would be easier to find a way to deal with those loopholes than trying to find that money elsewhere in society as we currently do.
Yeah its insane to me that people are unaware of this or ignore this. I also don't get how the average person can defend the existence of the ultra wealthy.
> I also don't get how the average person can defend the existence of the ultra wealthy.
Because they think they will be one some day. They have been sold the myth that with enough hard work you can “pull yourself by your boot straps” and will be the next billionaire. So better defend them now, that will be you in a couple of years. Never mind that the biggest indicator of your own wealth is generational.
As George Carlin said: “they call it The American Dream because you have to be asleep to believe it”.
You can win the lottery but still think that gabling on it is not a sound decision. A few people will strike big, but that’s not the same as saying anyone can.
Your own comment sets up a universe where everyone who criticizes society is a hypocrite except for Ted Kaczynski. It is a boring position and you don't deserve thoughtful and substantive comments.
>> I also don't get how the average person can defend the existence of the ultra wealthy.
> Because they think they will be one some day.
For me, it's not that I think I will be ultra wealthy. But I have seen over and over where a rule (for example) may start with the ultra wealthy initially, but over time politicians gradually change the scope until it affects nearly everyone.
A few examples would help to advance the discussion.
> where a rule (for example) may start with the ultra wealthy initially, but over time politicians gradually change the scope until it affects nearly everyone.
That’s not an argument in favour of the ultra wealthy, it’s an argument against bad rules. It’s not bad in and of itself that a rule which started with the most advantage is later applied to every one else (e.g. the right to vote).
A lot of the ultra wealthy like Musk get there by owning a company that becomes successful. Which is not a bad thing. But you could have some tax on it - maybe transfer some of the equity to the taxpayer if the company doesn't have spare cash?
> Yeah its insane to me that people are unaware of this or ignore this.
That's because it's not true. That might have been the baseline, but it's not what people were paying due to exemptions and credits, etc.
> I also don't get how the average person can defend the existence of the ultra wealthy.
Average person checking in. Who do you think is shouldering the tax burden? Gen z loudly complaining they don't have enough money for college or a house?
I find the avarice and greed masquerading as morality in the anti-wealthy movement reprehensible. If you're poor in America you have one of the best lives available in human history.
Also, what exactly is the complaint here - specifically? Anyone have a first principles argument for why "the existence of the ultra wealthy" is bad? Everything I've ever seen has been reddit-quality freshmen year drivel.
It worked in the past without any significant drawbacks for society (i guess the rich person losing 90% to taxes might grumble a bit), so there is no reason not to do it again.
I once read that the actual goal was to have a maximum income of 1 million dollar a year, and the 90% was a compromise. A quick search doesn't give me the source of this, anyone knows a reliable source?
I wonder how much the super-rich pay for the protection of their assets? I don't mean the physical security around their property or the fees to whatever vault holds their art collection. I mean how much to the super-rich pay to national governments for security of the national borders, court systems, general policing, financial rules, auditing, banking systems, and all the education and infrastructure required to run that system. I wonder if measured by a percentage of wealth whether the ultra rich are actually getting subsidised by the rest of the population.
I don't believe that market rates are applicable in all of these situations. I think that the super rich benefit from economies of scale which means that they spend £X on accountants and benefit £1000X
This is quite significant; especially this is why wealthy people from less stable or rule-of-law states tend to park their wealth in the West. There's a lot of money in London from Gulf states, Russian oligarchs, Chinese "property investors" and so on. To some extent it's a benefit, but it also prices out locals, and the distorting effects of that concentration of money start to affect the local rule-of-law as well...
Corporate welfare (socialism for the rich, capitalism for the poor) is widespread and based on the mythical infallibility of trickle down economics. To add to your list: when a company wants to build a new factory or office, often the tax payer funded local government will subside the building of that or offer long term tax breaks. True capitalism would be that the company funds it all themselves and if they can't afford it, they're not strong enough. Instead they have officials fighting over crumbs whilst the company rakes in massive profits.
The mentioned $200B globally per year is an irrelevant sum compared to global tax revenue - might shift some distributional things, but not adding noticeable amounts to taxes raised.
Declare residence in an isolated island. Stay away of the world for 6-9 months a year. Use a third-party proxy person who signs everything in your name (obviously for a profit), and so on, and so on... profit.
All the tricks were already invented during this century. The taxes to the rich guys, at the end, will only affect those in the middle class with medium-high salaries (do you recognize here my friends?).
That's exactly what I thought. Calls to tax the rich are not affecting them since they have means to avoid being taxed. We have no means at all and those laws will be directed at us at later stage (thresholds lowered, definitions changed, etc.).
Would you trust some random island state with your multi billion wealth? Seems risky. Also how do you maintain access to all the relevant markets that you need to multiply your wealth?
That level of wealth often implies a lot of risk-taking. That's why higher rates of tax are a problem: people won't take the risk, and far fewer new things will be created.
> Would you trust some random island state with your multi billion wealth? Seems risky.
Well, you don't have to actually store your wealth where the island state can get to it. Just because you're resident in the Cayman Islands for tax purposes, doesn't mean you need to hold your wealth as Cayman Islands Dollars, or store it in a Cayman Islands bank.
Banks in Switzerland and London are more than happy to look after your money for you, denominated in whatever currency you choose.
True -- but the ultrawealthy are largely concentrated in the USA. There are substantial impacts from renouncing for tax purposes, as well -- for instance, the Reed Amendment means that people who renounce their citizenship to avoid paying taxes are barred from entering the USA in perpetuity.
Additionally, there is an exit tax which captures unrealized gains upon renunciation.
So, yes, American citizens are a small percentage, but if the USA adopted wealth taxes, it would have an outsized global impact.
Yes, but my point was global. Everybody knows where the wealth is located but taxes and confiscation affects every country around the world event the poorer ones.
I am middle class, and I already do those tricks. In reality it means I follow the sun, and change location every two months. I pay about 10% in taxes and socials. All strictly legal!
Who really gets screwed by this, are middle class people with children!
Yes. There should be no objection against people being paid for honest work, but if these people use that money against other people in any way, we have a problem. And this is almost always the case, where rent seeking is just one example.
TL;DR:
- Everybody in this post is sick of paying taxes
- Everybody will pay more taxes in the near future. Period
- Rich guys will pay mostly the same taxes in the future
- Taxes are collected to repay debt not to sustain a sick society.
Anything else is wishful thinking and academic ideology far away from the real live.
EU has about 200 billions EUR in frozen assets of Russian oligarchs. Those money are ripe for taking, but EU needs justification. Taxing it over several years seems like a good strategy. It is not like they can move it to Dubai...
Almost all income is taxed in one way or another. For the capital to occur it must be taxed at least one. Capital gains taxes for financial instruments, dividend taxes for dividends. Inheritance taxes are also high.
There are also consumption taxes when "the rich" buy land for the "mansion" or their yacht.
So every dollar in that capital has been taxed in some way. Taxing this again would be a double taxation and it's not fair to tax the same dollar twice. (even if the person can afford it)
And it wouldn't work properly because for the really wealthy it'll be cheaper to optimize than to pay.
The AML laws are more "anti-tax evasion" laws. If you try to move money or open a bank account with more than 50K the amount of information you need to provide is mind boggling. And the rules are arbitrary... I don't want to think what'll happen when they offload this cost to an AI model.
I'm frustrated with repeated attempts to introduce yet another final tax on the rich, while the humdrum ones that most people pay are quietly falling by the wayside.
I don't want the ultra rich to pay a wealth tax, that no doubt they can avoid in some new way. Maybe take out loans, or deflate their assets in some another way. I want their income to be recognised and taxed. VAT paid. And so on...
I’m not clear on how exactly a person is expected to calculate their wealth in the first place. If someone has assets in the form of stocks, mutual funds, real estate, gold, bonds, bank accounts and so on, how are they supposed to track these and come up with “this is the value of my assets and hence X% of that for the tax equals Y”? Which day’s values should they take and which currency conversion rates should they consider (if their assets are spread across currencies)? How would a tax agent check if the declared numbers are correct or close to being correct or are under reported?
It’s easy to tax income and expenditure because those happen at specific points in time and have a specific value. But wealth could vary every second throughout the year. It could also fluctuate a lot over the course of a tax year. Taxing the peak value in a year won’t go well, and could possibly push people to move their residency (and tax resident status) to other places (thus losing out on consumption taxes to some extent).
The way I see it the super-rich were just lucky winners, a multi-billionaire had as much agency becoming such as the President of the United States.
He is just the lucky beneficiary of a great filter and unprecedented tail-wind which propelled him into the stratosphere of wealth.
If you expropriated Microsoft, Google, Apple, Amazon, Facebook etc. from the hands of billionaires and handed over the expropriated equity to Vanguard, BlackRock, StateStreet and the myriad of Pension Funds nothing would fundamentally change.
These big organizations run on autopilot, organization achieves a great success CEO shows up to take the honors, organization has a great failure and there is a whole apparatus put in place to distance the CEO as far as possible from the failure.
The most preposterous lie that wealthy people ever managed to sell to the population is that they are instrumental for the delivery of goods and services that people love, in fact the smartest among the wealthy (Gates, Buffet, Bezos etc) understand that this lie can collapse at any time and have pivoted towards a more secure lie being "yes the money is from the lottery winnings , but they are being returned at a steady rate to the population via philantropic foundations" except the wealth is untaxed and they decide the steady rate at which the returning is happening and by coincidence it's always steady but very slow and enables them to keep accumulating and so even if the descendants decide to keep their word it would take a dozen generations before it happens.
for an otherwise fairly intelligent forum, there is a lot of dumb on display on this thread. Taxing assets is an extremely bad idea and it doesn't solve the actual dead weight loss to society caused by the oligopolistic corporations the super wealthy own as their primary assets and it primarily harms the up and coming billionaires who are actually doing a great job at inventing and/or capital allocating to grow their wealth (think the elons of the world giving us wonderful new technology like starlink) and won't do very much against the old money families where the people smart enough to grow the fortune are long gone and all that is left is their mostly incompetent offspring living off the oligpolies their ancestors created.
The much better strategy is to go after all the oligopolies and break them up similar to what the USA did pre Rehnquist supreme court (although not quite to the same level, those guys were breaking up small regional gas station chains, for example). This will cause a flourishing of new companies, with new and often better business practices/technology and make us all better off. Taxing assets just makes people invest in less easily tracked assets held in less easily tracked locations if they can (read if they are already billionaires aka mostly incompetent offspring of people that made the fortune) and harms the next round of up and coming (and competent) challengers.
also, all you people pining for the 90% tax days go look at what sort of loopholes were available at that time. You basically had to be one of the unlucky few primarily earning income as salary to be exposed to that because there were so many loopholes. It wasn't the tax regime that made that the golden age, it was that antitrust broke up the trusts and world war 2 crushed a lot of the incompetent offspring billionaires, making the usa more equal than it ever had been and the golden age came from the cream of the crop striving and making it to the top over the following decades (and leaving us with the oligopoly problem we have now, along with their incompetent offspring broadly in control of the oligopoly).
159 comments
[ 3.1 ms ] story [ 206 ms ] threadIf the super-rich are such an easy target, how come the article states they also avoid any type of income tax?
Soon there'll be nothing left between the elite and the wage slaves/serfs.
A 35 year old doctor has a modest house and a decade or two of payments ahead of them.
A 55 year old doctor has long since paid off their house, it's a decent house and it's worth a few million bucks now.
Thus, viewed collectively the doctor class simultaneously despairs of ever owning a house, and owns a multi-million-dollar house.
I on the other hand with my $1 lower wealth am an average humble common man of the people.
I'm a firm believer in incremental changes and experiments which is of course hopelessly politically naive.
Your naïveté is not the problem, but rather partisanship means we can’t have nice things.
It becomes not dissimilar to the "Window tax" (not the bill gates kind) https://en.wikipedia.org/wiki/Window_tax - a form of daylight robbery where people brick up windows of their houses.
Note that in practice income is also quite complicated to pin down in tax law.
Many people that live in locations with property tax would very happily sell their property at the "assessed" value rather than sell on the open market for a fraction of that price.
Obviously that is before we get into the various ways to obscure ownership of trivial things like planes and yachts that is already done for various reasons.
Citation needed. Assessed values are generally lower than market value. Furthermore, there's a growing set of data which suggests that, in many places, lower-value houses are assessed at a higher percentage of their market value than higher-value houses[0] -- that is, assessments are regressive.
0. https://www.youtube.com/watch?v=8MjjHKIlKko
Vermont Supreme Court Reaffirms Rule that Sale Price Is Not Necessarily Conclusive in Determining Property’s Fair Market Value
The appellant, Gabriel Martinez, purchased a single-family dwelling built in 2000 for $350,000 on May 5, 2017. The previous owner had purchased it for $252,000 five months earlier when its assessed value was $433,000. A 2017 town-wide reappraisal – which took place while the appellant’s purchase was pending – set the property’s grand list value at $483,400.
Muslims have an obligatory charity called Zakat, 2.5% of your standing wealth (if you meet the threshold) directly goes to the poor. This includes what is in your bank account, savings, stocks and shares or investments you intend to sell.
> And they don't pay much for it Not true
> (in percentage terms definitely). Why would it matter?
I don't want to live in a dystopia with _untouchable_ hyper wealth individuals so I believe that governments should make it very hard to stay a billionaire and virtually impossible for people to inherit that level of generational wealth from their family.
I am very keen for levels of taxation (and the closing of all the loopholes) that would force billionaires to liquidate significant percentages of their assets to pay taxes as I think it will encourage them to work a bit harder. After all if they managed to become a billionaire once they must be very clever, right?
Even almost all their "assets" are stocks in the companies they created? Would the idea be that the founders of these companies should lose control over them?
The suggested wealth tax is 2%. I have no concerns that a billionaire capable of creating a multi billion dollar business would have any issues raising $20 million per year to sort out their tax bill.
Are there any billionaires you're worried about in particular?
That is somewhat debatable. Not all taxes go to universally popular public services. Special interest lobbies are strong everywhere, so you always end up funding a bunch of rent seekers.
This is the eternal problem of the public purse, not that different between modern democracies and eunuchs of the Ming dynasty: someone's else's money gets stolen a lot.
Edit: note that many countries would fit the description; at least I know the Flemish are complaining their taxes burning up for nothing in Wallonia and Madrid/Barcelona complaining their taxes disappearing for nothing in Andalusia etc, West Germany in East Germany, but I guess every country has this issue at least at some level.
I think you can easily see from the replies to my comment however that this sentiment is widely shared across europe, which is indeed reflective of the fact that our economic malaise and lack of policy to address it is an EU wide phenomenon
If this is a subject that you think is important then make an effort.
Citation needed.
Anecdotally there are articles such as https://ec.europa.eu/social/main.jsp?catId=89&furtherNews=ye... claiming that "half of Europeans support higher taxes" although in the breakdown it also counts taxes paid by others, which is of course easier to support as an individual. But I also can't find a source claiming that Europeans are "widely" unhappy with the taxes they paid and what they get in return.
Obviously HN users are not representative of the wider population, because of a bias towards higher-income brackets.
The wealth of the wealthy depend a lot on the infrastructure build from tax money. E.g. they don't build nation-scale road networks, but would make much less profit if these were absent.
Of course it's taking things from people. You might say that it's worth it, but that's nothing to do with the mechanism.
Having worked with the public sector a bit, it's incredible how much money is constantly wasted. You see public services and think all the money is spent efficiently on them, when it's just constantly spent on everything. £20k meetings to decide whether or not to spend £10k. Making sure your budget is always fully spent so you can get the same next year, even if you don't need it now and won't need it next year. Every day in every department in every government, multiple people's whole lifetime of taxation is wasted.
The mentality is totally different when your customers go to jail for not paying you.
Public sector waste comes out of all our pockets and could have been allocated to welfare, teacher salaries or infrastructure.
The regular claims "taxes stop x,y & x" be it risk taking, R&D, investments or whatever, don't seem to actually have much consistent evidence. It's yet another economics theory, most of which are more opinion than proven rules.
What seems to make the biggest difference is the stability of markets and perceived benefit. When tax rates are consistent or even declining, risk taking & investments drops when the economy is uncertain. If a company thinks there's money to be made, they're not going to sit back and do nothing based on if the tax they pay on that is 23% or 25%.
No, their customers' money went on value received, not on internal projects. However you're not entirely wrong: they're spending money that could go on salaries, lower prices, or shareholder dividends.
Thus they have three incentives not to waste, as if they do it too much a competitor will beat them.
The public sector doesn't have this incentive, as it can just lock people in a box if they don't pay it money.
Private companies come with safeguards: competition and the need for profitability (which is just sustainability anyway). When the natural balancing forces of the market are skewed, obviously inefficiencies will arise and people will pay the price for this.
Usually the saying is: "If the damned government would just get out of the way and we had unfettered capitalism we would have enormous growth".
The issue with Capitalism (as many economists will tell you) is that it causes monopolies, in fact the game monopoly was designed to teach exactly this.
Growth is not by-in-itself a good thing for most people, it typically is because wealth generally gets distributed a bit; however countries like the UK (which is a rich country by most metrics) has a lower QoL for a common person than Estonia does despite Estonia only having a fraction of GDP per capita relative to the UK.
Wealth naturally centralises in a closed capitalist system; regulation is the only force that stymies that.
If wealth is too concentrated then growth is meaningless to the majority.
No private monopoly is forever, whether it's the Hudson's Bay Company, the East India Company, GM, Kodak, IBM, you name it. All those empires fell because eventually there will be more innovative offers from lighters, more agile competitors. Government monopolies are much harder to get rid of.
Your same statements could be reflected inward of course: British empire, the several thousand peaceful transfers of power that come and go without fanfare and of course very violent revolutions that pass with very significant fanfare and attention.
A seated government, especially a democratically elected one should be capable of serving the needs of people, however governments are made of people and the smaller the government is the easier it is to buy it off. - The smaller the government, the easier the corruption. (which is why "small government" capitalists always end up embroiled in corruption scandals eventually).
A good example of this is denoted "the keys to power" in the easy to understand video essay by CGP Grey: https://www.youtube.com/watch?v=rStL7niR7gs
Imagine Switzerland bordered Russia... would they spend more or less on national defence? Does that mean that the EU is subsidising the defence budget of the country with the highest average wealth?
I agree with you that the economies of most EU countries cannot sustain US military spending levels.
My theory is that since the rich people in those EU countries are amassing wealth at a faster level than the economy is growing then we should use some of that growing wealth to ensure that the economy (and country) are properly defended. Also use the funds for education and infrastructure.
It turns out the US can learn from history and other countries when they see a model that suits them.
But after watching the money-printing and inflation of the last few years, maybe the numbers really can keep on rising forever even if meaningful economic activity doesn't increase.
I'm not advocating for a return to those levels, but right now the truly rich effectively pay no tax at all,basically a result of regulatory capture at the individual level. Hopefully, this is the first step in that finally beginning to swing back in the other direction.
I've reread my post that you responded to and when OP says 'tax rates are meaningless signaling to low income voters because no one pays these rates', my response is 'taxes should be better enforced so that people do indeed pay the stated rates'.
This is a problematic statement. Wealth inequality is not a huge problem. If we removed all the billionaires, people who are currently starving or unable to get clean water would still be in the same situation. Getting the base level of human condition up is the important thing, and it generally occurs much more in systems that are not trying to crush people who create vast amounts of value.
> as far as I can see any kind of arguments against tackling it such as 'we'll miss out on innovation' are capitalist propaganda. This is why it would be good to have accurate historical data to respond to these kind of arguments.
I don't see why this is the case. If you let people take more risks and try more things, with commensurate value exchange to the value they provide, then more things will appear. That's just normal.
You can see it in the small even - if teams are allowed to fail and succeed by taking risks, then they will take some risks. If they are never rewarded for succeeding, or even punished for succeeding, then they will never try.
If you don't see why wealth inequality is a problem then look at biodiversity for example. It's generally accepted that wider biodiversity is better for everyone, and efforts to conserve a wider range of diverse species rather than a smaller number of better adapted species are encouraged. Now apply this reasoning to businesses. If wealth were redistributed better that would mean more chances for people of the lower end of the spectrum to innovate and produce small businesses which would lead to wider diversity and resilience in the economy. Which ties in with your small team example.
As for 'capitalist propaganda'; for example, considering higher wealth tax rates for the top end as 'crushing those who generate wealth' is pretty clearly capitalist doctrine to me. It's the kind of narrative that wealthy people in positions of power sell so that they don't have to redistribute that wealth. I agree with you that people at the high end should have incentives to innovate and I am not advocating communism. However as far as I can see, with properly globally enforced taxes at a higher rate for top end wealth there would still be plenty of incentive for these people to innovate.
No it's not. It's "people should make free agreements with each other as much as possible, as this will motivate far better resource allocation than a centralised monarchy or bureacracy ever could."
> The purpose of the existence of government historically was to combat this problem.
Blimey, no. The purpose of government was to do what the monarch said, collect taxes, etc, and later, for a few countries, to do what the elected leader said. Governments predate capitalism.
> If wealth were redistributed better that would mean more chances for people of the lower end of the spectrum to innovate and produce small businesses
This doesn't have to be true. There are lots of chances already to create small businesses. The main blockers are bureacratic processes that make it hard to establish and compete, not billionares.
Redistribution itself is a slippery concept, but let's say that Elon Musk gave a load of his wealth (not money, wealth) in the form of Tesla shares to people so they can start small businesses. What would that actually mean? Who would buy those shares if a bureacrat can choose to steal - I mean ,redistribute, them at any point?
> with properly globally enforced taxes at a higher rate for top end wealth there would still be plenty of incentive for these people to innovate
This is a very leaky statement in practice. Bureacrats are not good at designing overbearing tax systems that retain innovation. We're more likely to stop needing good resource allocation (e.g. somehow we crack cold fusion) before bureacrats get good at not starving their populations to death from bad central policies.
Governments predate capitalism. They don't predate wealth inequality. Part of the purpose of the original formation of governments was to tackle wealth inequality in a feudal system.
One of the things that stops people at the lower end from innovating and forming for example small businesses is lack of resources. Redistributing wealth would allow mean more resources available to wider range of people. I'm sure improving bureaucratic processes for small business startups is also great thing to do.
I have a PhD in particle physics and I think that cold fusion is basically completely unviable in any situation. I may be proven wrong. I agree that taxation is a complex problem to solve, which is why I was advocating allocating more resources to this earlier on. 'Rich people who have far more resources than they have any need for and live wildly extravagant lifestyles don't need to redistribute any of their wealth because one day we'll crack a high yield problem and everyone will be able to be wealthy' is a very dangerous viewpoint as far as I'm concerned. It's clear that the current stable climatic state that our planet sits in is becoming strained by human economic activity, and the capitalist promise of 'there will always be more' is becoming more complex to fulfill. There is a clear solution which exists now, and it is to redistribute wealth.
I don't think we'll likely to come to any kind of agreement about these topics so I'm going to leave this conversation here.
So do I.
> Rich people who have far more resources than they have any need for and live wildly extravagant lifestyles don't need to redistribute any of their wealth because one day we'll crack a high yield problem and everyone will be able to be wealthy' is a very dangerous viewpoint as far as I'm concerned.
It's a bad idea to base your emotional conception of capitalism on so few people they don't matter to the system. In fact, it's a bad idea to have an emotional view of an economic system in general. But I think this is also false.
(If you just want to say "steal" but use the word "redistribute", you'd be in plentiful company, but I'm assuming by "redistribute" you mean "tax".)
Whenever anyone spends money, it's repeatedly taxed. It's taxed with VAT (UK-specific, but this adds 20% to the purchase price already). It's taxed because of all the fuel tax paid to get the good/service going. It's taxed with all the income tax paid to the people who made/supplied the thing. It's taxed with the employee tax (National Insurance in the UK) for those employees. It's taxed via the corporation tax paid by the company that supplied it. So much tax is paid on every good.
Additionally, governments inflate currencies, so governments can tax savings by devaluing them.
Talking as though none of this is present, and we're somehow in a world where barely any tax is paid seems beyond ludicrous. So much tax is paid, at every level, all the time.
> It's clear that the current stable climatic state that our planet sits in is becoming strained by human economic activity, and the capitalist promise of 'there will always be more' is becoming more complex to fulfill. There is a clear solution which exists now, and it is to redistribute wealth.
We already tax people. If you think this is a clear soluton to the climate, you might need to elaborate as to why that is.
Thank you for this discussion. Goodbye.
at least they had to go down from 90%
now they start from 37%...
I'd like to see how the "real tax rate" for each bracket has changed over time, if there were any way to arrive at such a number. It'd be difficult to fairly account for all the accounting tricks/loopholes, subsidies, and quid-pro-quo to arrive at some net burden comparable between time periods.
It also seems that this was the time where many loopholes were invented. I think it would be easier to find a way to deal with those loopholes than trying to find that money elsewhere in society as we currently do.
Issue is - our politics are on rich ppl payroll.
Nothing will change till we make any lobbing illegal with very bad consequences for both parties.
Because they think they will be one some day. They have been sold the myth that with enough hard work you can “pull yourself by your boot straps” and will be the next billionaire. So better defend them now, that will be you in a couple of years. Never mind that the biggest indicator of your own wealth is generational.
As George Carlin said: “they call it The American Dream because you have to be asleep to believe it”.
You could surely find some saying that they achieved the dream but that's not what people want to hear, therefore not "quotable".
"Eschew flamebait. Avoid generic tangents. Omit internet tropes."
"Be kind. Don't be snarky. Converse curiously; don't cross-examine. Edit out swipes."
"Comments should get more thoughtful and substantive, not less, as a topic gets more divisive."
https://news.ycombinator.com/newsguidelines.html
> Because they think they will be one some day.
For me, it's not that I think I will be ultra wealthy. But I have seen over and over where a rule (for example) may start with the ultra wealthy initially, but over time politicians gradually change the scope until it affects nearly everyone.
A few examples would help to advance the discussion.
> where a rule (for example) may start with the ultra wealthy initially, but over time politicians gradually change the scope until it affects nearly everyone.
That’s not an argument in favour of the ultra wealthy, it’s an argument against bad rules. It’s not bad in and of itself that a rule which started with the most advantage is later applied to every one else (e.g. the right to vote).
That's because it's not true. That might have been the baseline, but it's not what people were paying due to exemptions and credits, etc.
> I also don't get how the average person can defend the existence of the ultra wealthy.
Average person checking in. Who do you think is shouldering the tax burden? Gen z loudly complaining they don't have enough money for college or a house?
I find the avarice and greed masquerading as morality in the anti-wealthy movement reprehensible. If you're poor in America you have one of the best lives available in human history.
Also, what exactly is the complaint here - specifically? Anyone have a first principles argument for why "the existence of the ultra wealthy" is bad? Everything I've ever seen has been reddit-quality freshmen year drivel.
It worked in the past without any significant drawbacks for society (i guess the rich person losing 90% to taxes might grumble a bit), so there is no reason not to do it again.
I do not believe for one minute that people with enough money to be taxed heavily don't have enough money to dodge the taxes.
I do not believe it because it seems they do it even in lower tax regimes.
Or actually it should cost somewhat more, if you think that holding on to those assets has significantly more utility to you than paying tax.
The Cayman Islands, Bermuda, and the British Virgin Islands all have to compete against one another, after all.
All the tricks were already invented during this century. The taxes to the rich guys, at the end, will only affect those in the middle class with medium-high salaries (do you recognize here my friends?).
Well, you don't have to actually store your wealth where the island state can get to it. Just because you're resident in the Cayman Islands for tax purposes, doesn't mean you need to hold your wealth as Cayman Islands Dollars, or store it in a Cayman Islands bank.
Banks in Switzerland and London are more than happy to look after your money for you, denominated in whatever currency you choose.
Additionally, there is an exit tax which captures unrealized gains upon renunciation.
So, yes, American citizens are a small percentage, but if the USA adopted wealth taxes, it would have an outsized global impact.
Who really gets screwed by this, are middle class people with children!
The classic middle class trap: the working class are subsidised by taxes; the rich can pay enough to avoid taxes, and the middle class pay taxes.
Anything else is wishful thinking and academic ideology far away from the real live.
EU has about 200 billions EUR in frozen assets of Russian oligarchs. Those money are ripe for taking, but EU needs justification. Taxing it over several years seems like a good strategy. It is not like they can move it to Dubai...
So every dollar in that capital has been taxed in some way. Taxing this again would be a double taxation and it's not fair to tax the same dollar twice. (even if the person can afford it)
And it wouldn't work properly because for the really wealthy it'll be cheaper to optimize than to pay.
The AML laws are more "anti-tax evasion" laws. If you try to move money or open a bank account with more than 50K the amount of information you need to provide is mind boggling. And the rules are arbitrary... I don't want to think what'll happen when they offload this cost to an AI model.
I don't want the ultra rich to pay a wealth tax, that no doubt they can avoid in some new way. Maybe take out loans, or deflate their assets in some another way. I want their income to be recognised and taxed. VAT paid. And so on...
It’s easy to tax income and expenditure because those happen at specific points in time and have a specific value. But wealth could vary every second throughout the year. It could also fluctuate a lot over the course of a tax year. Taxing the peak value in a year won’t go well, and could possibly push people to move their residency (and tax resident status) to other places (thus losing out on consumption taxes to some extent).
He is just the lucky beneficiary of a great filter and unprecedented tail-wind which propelled him into the stratosphere of wealth.
If you expropriated Microsoft, Google, Apple, Amazon, Facebook etc. from the hands of billionaires and handed over the expropriated equity to Vanguard, BlackRock, StateStreet and the myriad of Pension Funds nothing would fundamentally change.
These big organizations run on autopilot, organization achieves a great success CEO shows up to take the honors, organization has a great failure and there is a whole apparatus put in place to distance the CEO as far as possible from the failure.
The most preposterous lie that wealthy people ever managed to sell to the population is that they are instrumental for the delivery of goods and services that people love, in fact the smartest among the wealthy (Gates, Buffet, Bezos etc) understand that this lie can collapse at any time and have pivoted towards a more secure lie being "yes the money is from the lottery winnings , but they are being returned at a steady rate to the population via philantropic foundations" except the wealth is untaxed and they decide the steady rate at which the returning is happening and by coincidence it's always steady but very slow and enables them to keep accumulating and so even if the descendants decide to keep their word it would take a dozen generations before it happens.
The much better strategy is to go after all the oligopolies and break them up similar to what the USA did pre Rehnquist supreme court (although not quite to the same level, those guys were breaking up small regional gas station chains, for example). This will cause a flourishing of new companies, with new and often better business practices/technology and make us all better off. Taxing assets just makes people invest in less easily tracked assets held in less easily tracked locations if they can (read if they are already billionaires aka mostly incompetent offspring of people that made the fortune) and harms the next round of up and coming (and competent) challengers.