This is just bad (bad == misleading) math. Where's the appreciation of the assets? Where's the real examples from other countries that have tried wealth taxes? I don't know what he's _trying_ to do, but the effect of his rhetoric certainly seems to me that "If you won the lottery, you this would be bad for you! [but if you don't, it'd be great for you, and really only bad for ultra-rich people like me]"
I'd love to see some real numbers on "how much paul graham would pay" vs "how much your average startup founder who fails a couple times and has a moderate success or two" would pay.
Also we're talking about "over 60 years" - this isn't "government swoops in and steals half of your dragon's hoard of gold" this is "you pay taxes to support the society that allows you to safely hoard gold in the first place, and oh by the way you're still richer than anyone else and certainly wealthy enough to live a stupidly comfortable lifestyle even if 95% of your $100M assets got repo'd and you somehow managed to never appreciate your assets at all"
If it wasn't obvious, I'm clearly pro wealth redistribution, and I get that many people are fundamentally against that. It seems dumb to me to think that modest wealth redistribution is unjust or bad unless you are currently a member of the ultra rich. (and just to be clear, I feel that even a 5% wealth tax should be described as "modest")
The appreciation of assets doesn't really change anything to the equation. You are still left with approximately the same % vs what you would own without wealth tax, whatever the growth rate you assume. Because the appreciation is taxed too.
The problem is that a wealth tax of just 1% doesn't actually raise that much money, a proposed wealth tax of 2-3% (Warren) would be the highest in the world.
If you have that kind of money, why would you not just take it elsewhere? Think about it, if that capital is actually creating returns to make up for the depreciation, it must be working capital. Removing it from the economy would be damaging.
What if the money is in government bonds? Those return below 1% right now, so you just dump them, putting more pressure on the Fed to keep stable rates.
Which brings us to the next topic: Dollar depreciation. You already need ~2% returns just even out the CPI inflation rate, but asset inflation is way higher than that.
So you're basically begging rich people to dump dollars, dump US bonds and move working capital to safer countries. Good Luck with that.
> If you have that kind of money, why would you not just take it elsewhere?
Take it where? Lots of Europe has wealth taxes already. Commonwealth countries like AUS and CAN are likely to follow suit with a wealth tax -- capital flight to the US would be a big factor for them implementing it now but an American wealth tax opens the door.
And never mind that you're also asking people to give up their US citizenship to dodge these taxes -- the risk of which is probably as lot higher than just paying.
> Take it where? Lots of Europe has wealth taxes already.
All European countries either don't have wealth taxes anymore, or they're fractions of a percent, not 2-3%. The German supreme court even ruled the wealth tax unconstitutional.
> Commonwealth countries like AUS and CAN are likely to follow suit with a wealth tax -- capital flight to the US would be a big factor for them implementing it now but an American wealth tax opens the door.
Of course not, they would prefer the inflow of capital over the meager revenue from a wealth tax.
> And never mind that you're also asking people to give up their US citizenship to dodge these taxes -- the risk of which is probably as lot higher than just paying.
If you have a lot of money to lose, it's probably riskier to entrust a lifetime of tax obligations to a bankrupt state than to give up its citizenship. Rich people tend to be welcome abroad everywhere.
If you inductionally apply the argument that you shouldn't increase taxes because someplace else offers a lower tax burden, no place can raise it's taxes. There are other factors in choosing your country of residence (and nationality) than taxes.
Sure, there are other factors. Taxes are like prices, states and countries are competing on them. If you can make up for high taxes, that's fine, but at some point it becomes a shitty deal, so people won't show up anymore. If you are rich, you can just retire in any country and preserve your wealth for yourself and your children.
A wealth tax of 2-3% would enormous. Combined with an average capital gains tax, the incentive to get the capital out of the US becomes huge. Yet, even 2-3% doesn't bring in that much money relative to deficit spending and stimulus bills, so who is to say it's going to stop there? If you're clueless enough to go with a 2-3% wealth tax, you're clueless enough to go with 5% and more (Warren).
They'll have to renounce their US citizenship. And the wealth will get reinvested in wherever it produces the highest returns, like it already is right now.
So what? US citizenship has the unique disadvantage of making you a subject to the IRS globally.
If the US imposed a wealth tax to the tune of 2-3%, you bet that many nice countries will be welcoming to all that capital in exchange for citizenship. Also consider that most Americans have some sort of heritage abroad.
> And the wealth will get reinvested in wherever it produces the highest returns, like it already is right now.
Sure, you can still invest into the US market after leaving the sinking ship. On the other hand, a little bit of traveling brings perspective, if you're now a citizen of some other country, why not also invest and build there?
This is just bad (bad == misleading) math. Where's the appreciation of the assets? Where's the real examples from other countries that have tried wealth taxes? I don't know what he's _trying_ to do, but the effect of his rhetoric certainly seems to me that "If you won the lottery, you this would be bad for you! [but if you don't, it'd be great for you, and really only bad for ultra-rich people like me]"
I'd love to see some real numbers on "how much paul graham would pay" vs "how much your average startup founder who fails a couple times and has a moderate success or two" would pay.
Also we're talking about "over 60 years" - this isn't "government swoops in and steals half of your dragon's hoard of gold" this is "you pay taxes to support the society that allows you to safely hoard gold in the first place, and oh by the way you're still richer than anyone else and certainly wealthy enough to live a stupidly comfortable lifestyle even if 95% of your $100M assets got repo'd and you somehow managed to never appreciate your assets at all"
If it wasn't obvious, I'm clearly pro wealth redistribution, and I get that many people are fundamentally against that. It seems dumb to me to think that modest wealth redistribution is unjust or bad unless you are currently a member of the ultra rich. (and just to be clear, I feel that even a 5% wealth tax should be described as "modest")