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Wealth tax academic paper

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scrumpyjack
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Re: Wealth tax academic paper

#419615

Postby scrumpyjack » June 15th, 2021, 8:58 am

Even the Labour party at one point tried to move to Lootman's attitude, when Peter Mandelson said in a speech in the US that he 'is intensely relaxed about people getting filthy rich'.

Lootman
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Re: Wealth tax academic paper

#419616

Postby Lootman » June 15th, 2021, 9:10 am

scrumpyjack wrote:Even the Labour party at one point tried to move to Lootman's attitude, when Peter Mandelson said in a speech in the US that he 'is intensely relaxed about people getting filthy rich'.

I probably said this months ago up-thread, but the really insidious thing about this focus on inequality is how it changes the target of the debate.

It used to be that the redistributionists focused on poverty. And fine, if you care about poverty then focus on the poor. You can give to charities supporting them, volunteer your time, read The Guardian, vote Labour and all that. So far, so good.

But suddenly by relentlessly repeating the bogeyword "inequality", there is a subtle shift in the debate. Now the problem is not the poor, but rather the rich. The theory they want us to buy is that the reason people are poor is because of Bezos, Gates, Zuckerburg etc.

No mind that those individuals have generated billions in wealth and countless jobs for millions of people. No, they are the cause of every evil in the world. If only we could eradicate wealth then there would be no poverty. Or something.

It is a particularly snide change of emphasis in order to create division and class conflict.

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Re: Wealth tax academic paper

#431498

Postby 1nvest » July 30th, 2021, 3:07 pm

Lootman wrote:
Steveam wrote:“There is nothing built into the economy that says you can’t tax unrealised capital gains. It’s not an immutable law of economics, it’s a deliberate policy choice, a choice that, based on the explosion of inequality in the US in recent decades, appears to be a pretty bad one. Wealthy investors like me, a former Wall Street executive, simply should not be allowed to pick and choose when we want to pay taxes on our investments.”

The "choice" not to tax unrealised gains wasn't really made at all. Rather it is the overwhelming default of almost every national government around the world. Of course that includes the various jurisdictions that do not tax capital gains at all. So you need a compelling reason to change that.

An obvious reason why nations continue to tax only realised gains is the principle that in general we tax transactions and not valuations. There are exceptions such as IHT in the UK, and more arguably council tax. But the principle in general is that tax should be applied where a transaction has happened because that transaction results in the individual actually having cash to pay a tax. If you tax a house or share position based on its uplift in value over the last 12 months then there is no assurance that individual has any actual cash to pay the tax. And forcing him/her to then sell to raise those funds would simply add more to their tax burden.

Of course in the UK by the time you have exempted one's main home, ISAs and SIPPs, the take would be a lot less than envisaged anyway. But the real cost of doing this would be to disincentivise people taking risks with capital. It might also drive investment to less punitive jurisdictions. There are sound reasons why CGT works the way it does, not that the envy mob cares about that in their war on success.



http://warrenbuffettoninvestment.com/ho ... -investor/

The arithmetic makes it plain that inflation is a far more devastating tax than anything that has been enacted by our legislatures. The inflation tax has a fantastic ability to simply consume capital. It makes no difference to a widow with her savings in a 5% passbook account whether she pays 100% income tax on her interest income during a period of zero inflation, or pays no income taxes during years of 5% inflation. Either way, she is “taxed” in a manner that leaves her no real income whatsoever. Any money she spends comes right out of capital. She would find outrageous a 120% income tax, but doesn’t seem to notice that 6% inflation is the economic equivalent.

Each new note printed/spent benefits the counterfeiter at the expense of devaluing all other notes in circulation, a form of micro taxation.

Wealth taxation policies tend to soon end. Sweden I believe collected 600 million in more taxation but saw hundreds of billions of outflight. Less inward investment, outflows instead, and the cost vastly outweighs the benefits.


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