The problem with wealth taxes

[Loren Pechtel]

Greece apparently went that route and they're fucking themselves up even more:

(If the paywall gives you trouble go anonymous, it will avoid the 10 articles/month limit.)
http://mobile.nytimes.com/2016/11/02/opinion/in-greece-property-is-debt.html

People are walking away from houses because the tax burden is too high. The tax burden has driven the value of those houses way down, also.

 

[RVonse]

I'm surprised Chinese investors have not come in to swoop up good real estate deals and then drive the market the other way. I could see a good investment opportunity especially if they are beach front locations.

 

[barbos]

wealth taxes are stupid

 

[Derec]

Of course one remedy would be to exempt the primary residence, kind of like the US has homestead exemptions that reduce property tax burden. If you have to walk away from that vacation beach home then maybe that's not that big a tragedy.

Wealth taxes might be a bad idea for other reasons, but this particular objection can be easily remedied.

 

[dismal]

The problem with wealth taxes

This depends on your goal. If you are trying to punish wealthy people or drive wealth out of your country they seem fine.

 

[RVonse]

The problem with wealth taxes

This depends on your goal. If you are trying to punish wealthy people or drive wealth out of your country they seem fine.

??How did not accepting a property inheritance drive wealth out of the country? The country was already obviously in poor financial condition before this happened. And the property itself does not "run away". It just isn't owned by the same person it would have been.

I agree with Derec. Wealth taxes might be a bad idea for other reasons, but this particular objection can be easily remedied.

 

[Elixir]

Of course one remedy would be to exempt the primary residence, kind of like the US has homestead exemptions that reduce property tax burden. If you have to walk away from that vacation beach home then maybe that's not that big a tragedy.

Wealth taxes might be a bad idea for other reasons, but this particular objection can be easily remedied.

Why not tax stocks? Virtually every other form of property is taxed, and the act of buying, holding, and selling stocks does nothing whatsoever for GDP. "Investors" are basically parasites. It might even put some cash back into circulation.

 

[Jarhyn]

Of course one remedy would be to exempt the primary residence, kind of like the US has homestead exemptions that reduce property tax burden. If you have to walk away from that vacation beach home then maybe that's not that big a tragedy.

Wealth taxes might be a bad idea for other reasons, but this particular objection can be easily remedied.

Why not tax stocks? Virtually every other form of property is taxed, and the act of buying, holding, and selling stocks does nothing whatsoever for GDP. "Investors" are basically parasites. It might even put some cash back into circulation.

Because stocks are the bastion of the actual wealth, and God forbid people be forced to continue working to continue being wealthy.

 

[Horatio Parker]

Of course austerity has nothing to do with it.

 

[Elixir]

Why not tax stocks? Virtually every other form of property is taxed, and the act of buying, holding, and selling stocks does nothing whatsoever for GDP. "Investors" are basically parasites. It might even put some cash back into circulation.

Because stocks are the bastion of the actual wealth, and God forbid people be forced to continue working to continue being wealthy.

Maybe if that wealth accrued to the people who actually produced it (workers) instead of parasitic "investors", we'd have a middle class and a consumer economy that works. But I'm not a macro-economist - or any other kind of economist. Just a business owner past retirement age fending off vulture capitalists...

 

[Loren Pechtel]

Of course one remedy would be to exempt the primary residence, kind of like the US has homestead exemptions that reduce property tax burden. If you have to walk away from that vacation beach home then maybe that's not that big a tragedy.

Wealth taxes might be a bad idea for other reasons, but this particular objection can be easily remedied.

Why not tax stocks? Virtually every other form of property is taxed, and the act of buying, holding, and selling stocks does nothing whatsoever for GDP. "Investors" are basically parasites. It might even put some cash back into circulation.

Huh? Every other form of property is taxed?

Land is taxed--because land requires services. There's a very real cost that warrants taxes.

Automobiles are taxed--because vehicles require roads and that's a very real cost. Note that vehicles that don't use roads don't pay taxes.

Aircraft are taxed--because they use the air traffic control system, a very real cost.

I can't think of any other form of property that carries an annual tax.

And buying/selling stocks does help the GDP because it directs the money to the endeavors that are more productive.

 

[Harry Bosch]

Of course one remedy would be to exempt the primary residence, kind of like the US has homestead exemptions that reduce property tax burden. If you have to walk away from that vacation beach home then maybe that's not that big a tragedy.

Wealth taxes might be a bad idea for other reasons, but this particular objection can be easily remedied.

Why not tax stocks? Virtually every other form of property is taxed, and the act of buying, holding, and selling stocks does nothing whatsoever for GDP. "Investors" are basically parasites. It might even put some cash back into circulation.

How are stock holders parasites? Pensions are gone. SSN has a shaky future. How the hell are people suppose to retire if they can't invest in stocks for the long run?

 

[Harry Bosch]

Because stocks are the bastion of the actual wealth, and God forbid people be forced to continue working to continue being wealthy.

Maybe if that wealth accrued to the people who actually produced it (workers) instead of parasitic "investors", we'd have a middle class and a consumer economy that works. But I'm not a macro-economist - or any other kind of economist. Just a business owner past retirement age fending off vulture capitalists...

Ahhh, I get it now. You are past retirement age and maybe have forgotten that some of us would also like to retire someday!

 

[Harry Bosch]

Why not tax stocks? Virtually every other form of property is taxed, and the act of buying, holding, and selling stocks does nothing whatsoever for GDP. "Investors" are basically parasites. It might even put some cash back into circulation.

Huh? Every other form of property is taxed?

Land is taxed--because land requires services. There's a very real cost that warrants taxes.

Automobiles are taxed--because vehicles require roads and that's a very real cost. Note that vehicles that don't use roads don't pay taxes.

Aircraft are taxed--because they use the air traffic control system, a very real cost.

I can't think of any other form of property that carries an annual tax.

And buying/selling stocks does help the GDP because it directs the money to the endeavors that are more productive.

Yea, no for profit company in the US can survive without equity. Cash flows are bank loans are not sufficient. Companies need patient investment and liquidity.

 

[SimpleDon]

Why not tax stocks? Virtually every other form of property is taxed, and the act of buying, holding, and selling stocks does nothing whatsoever for GDP. "Investors" are basically parasites. It might even put some cash back into circulation.

Huh? Every other form of property is taxed?

Land is taxed--because land requires services. There's a very real cost that warrants taxes.

Automobiles are taxed--because vehicles require roads and that's a very real cost. Note that vehicles that don't use roads don't pay taxes.

Aircraft are taxed--because they use the air traffic control system, a very real cost.

I can't think of any other form of property that carries an annual tax.

And buying/selling stocks does help the GDP because it directs the money to the endeavors that are more productive.

If you are going to advocate for markets you should at least understand how they work.

When you buy a stock the vast majority of the time, and I mean >99.99% of the time, you buy the stock from a stockholder who wants to sell. None of the money that you paid for the stock goes to the company. If the stockholder made a profit on the sale then that profit came 100% from you. Likewise, if the previous owner of the stock realized a loss in the sale that was to the benefit of the stockholder that he bought the stock from. None of the loss went to the corporation.

The stock of a corporation is a liability for the corporation, a debt. If the stock increases in value in essence this liability increases. I say in essence because the value of the corporation also increases balancing the increase in the liability, so most companies only carry the liability for the original value of the stock when it was first issued. This is the only time that the corporation realizes money from the sale of the stock.

So you are wrong, the buying and selling of stocks doesn't direct money to the endeavors that are more productive. The endeavors that are more productive make more profit on the sales of their products and this is how the vast majority of the time, >99.99% of the time, that corporations get the money that they need for new investments. The stock market has nothing to do with it.

 

[SimpleDon]

This thread and the article that inspired it, point out the biggest problem that most people have in understanding economics, that for the most part what is good for the individual is bad for the economy as a whole.

If this is obvious anywhere it is in what economists call the Paradox of Thrift. That thrift, saving, is good for the individual but that the money that is saved leaves the economy and reduces the economy.

Likewise, it is the same for increasing home values. This is good for the individual homeowner but bad for the economy as a whole because increased real estate valuations eventually lead to increased housing costs and increased wages to cover those increased costs.

 

[jonatha]

I can't think of any other form of property that carries an annual tax.

At least in certain states, any business will pay tax on the value of its plant and equipment (adjusted for depreciation, but not using the same depreciation schedule as the IRS uses).

 

[iolo]

Wealth taxes are a desperate attempt to make capitalism work, but of course, in a capitalist state, the really wealthy avoid paying. It is a silly and unreformable system that only the very rich like, and have their serfs vote for.

 

[Jarhyn]

Maybe if that wealth accrued to the people who actually produced it (workers) instead of parasitic "investors", we'd have a middle class and a consumer economy that works. But I'm not a macro-economist - or any other kind of economist. Just a business owner past retirement age fending off vulture capitalists...

Ahhh, I get it now. You are past retirement age and maybe have forgotten that some of us would also like to retire someday!

I'm in my early 30's and expect to keep working until the day I physically can't anymore, and with the expectation that I put money aside through social security taxes to the future in which I cannot contribute, with the expectation that I use that time to find a new way to contribute, to the extent that my contribution is necessary. And yes, I disdain the notion of retirement with every part of my being. I disdain the natural evil of a world that makes us too tired or broken to continue being useful to each other, and I disdain the capitulation to that natural evil. Perhaps I may even end up disdaining it of myself that I fall to that, but I'd probably kill myself instead, and good riddance to me in that case.

Of course, while I judge everyone who has fallen to that state, I don't expect them to understand it, as they have lived their whole lives absent the cultural and social education that wealth ought require work. An action is right or wrong when it is taken, and when this decision to give up on society is made, most people lack the means or opportunity to know that giving up is wrong; for them, their ignorance has spared them, and it's not like I can go back in time to convince then to keep going, assuming that our culture hasn't already polluted them to the point where they wouldn't be capable of hearing it.

Then, I was also talking about wealth of form that implies abundance, not the form that implies having anything at all.

So, while your glib non-sequitur may attack elixir, you still have to answer to me.

 

[iolo]

Ahhh, I get it now. You are past retirement age and maybe have forgotten that some of us would also like to retire someday!

Nope. I'm in my early 30's and expect to keep working until the day I physically can't anymore, and with the expectation that I put money aside through social security taxes to the future in which I cannot contribute, with the expectation that I use that time to find a new way to contribute, to the extent that my contribution is necessary. And yes, I disdain the notion of retirement with every part of my being. I disdain the natural evil of a world that makes us too tired or broken to continue being useful to each other, and I disdain the capitulation to that natural evil. Perhaps I may even end up disdaining it of myself that I fall to that, but I'd probably kill myself instead, and good riddance to me in that case.

It always turns out that there are people, and other reasons, not to. We live too long now to continue working like thirty-year-olds, and it is sensible to let people die peacefully, in a warm place and with food to eat. I am waiting for the tories to decide not to have the NHS treat anyone over seventy - but that would lose them the support of most of their voters!