(To be clear, I'm not advocating murdering anyone ... not even the ultra rich ... but man, their aversion to paying taxes is shameless.)
I remember doing the math when the last company I worked for was sold, and how much of a percentage of the wealth our founders received alone would be subtracted if they had made all the hundreds of us millionaires. I think the math equated to roughly 0.006% or so of their total wealth to basically instill a new millionaire class in my city which likely would have led to a little boom in spending + business creation
of the few people who did get an actual decent share and not piddly RSUs, I believe more than half stayed on in very senior roles and still do some of the best work at the company today. it's always astonishing how proportionally little of an impact wealth redistribution would have on the ultra-wealthy, and how disproportionately large of an impact that would have on the quality of life for the rest of us
Consider if the US government liquidated every US billionaire at 100% of their stock market paper value (impossible, the liquidity influx would smash the stock price to the ground and ruin middle class retirements).
In this non-existent perfect world, it would raise about… $6-7 trillion. Enough to cover the US government deficit for under 3 years, or run the government for under one year. Then it’s gone.
Completely liquidating every billionaire would be satisfyingly cathartic, but still wouldn’t be enough to cause a real trajectory change. The idea is useful political fodder, to hide the fact even a hypothetically heavily taxed billionaire class can’t even cover today’s spending problem.
A homeless person may very well say that someone with your salary and ability to donate $500 to a political cause is undemocratic.
But the money in your hypothetical would literally just disappear into the void, never to touch the US economy again. It imagines a world where SNAP beneficiaries purchase nothing with their cards, the money simply vanishing, as if eaten by a deep god, not even existing as shit on the ground for two enterprising economists to consume and stimulate GDP growth with
This is a transparently bad thought experiment jury-rigged for failure
A few countries, including Switzerland and Spain, have wealth taxes on a small scale. Several, most recently France, have abandoned them as unworkable.
The reason they say "it's unworkable" is because the rich don't want to pay taxes.
So what happens when you try to tax unrealized capital instead of land is that the former is highly mobile and can arrange to be not subject to your jurisdiction if the rate of taxation is higher than whatever inconvenience is obtained by moving the claims around, so the net result is a loss of overall tax revenue. This is why France abandoned the ISF and replaced it with a tax on land, which is not mobile, and why most jurisdictions have low taxes on capital compared to less mobile things. It's not because it is "fair", but because there are limits to what you can collect that don't apply to things like land or labor.
Can we:
- create a progressive tax on dividends and capital gains, based on total wealth?
- create a tax on asset backed loans?
It is so easy to rationalise the idea of taking everything off someone who has more than oneself. We've got political phrases to justify it.
But beware because you are the wealthy: that person living on the street wants everything you have; and maybe 95% of the world deserves to take everything you own (that's only fair right?).
In New Zealand we have MMP voting, and minority parties want to bring in wealth taxes: taxes to take between 25% and 100% of retirement savings (assuming someone has managed to save enough to own a nice house). Double taxation since those savings were after already getting taxed at 30%+.
Incentives matter. Overtax the creators, and they either won't create new businesses or won't grow their businesses.
Consider moving to a poor country if you want things to be fairer.
People need to be incentivised to create wealth for their country. So that the country can afford to pay for nice things like healthcare and social services.
Balance is required to disincentivise the parasites (loan-sharks and many finance verticals seem parasitic to me)... We don't need scumbags that take wealth from everybody without creating any surpluses.
"Regressive taxation" is regressive for business building. It's a risky, shit job. Put the taxes too high and why would anyone do it? Haven't you noticed that little don't create businesses in lots of countries (because why the fuck would you!!). Go on: kill your golden geese in the USA (flatten the world market).
I've helped create a business that brings in important overseas income to NZ. I'm taxed so highly regressively that I lack the incentive to risk my precious hours to earn more money.
I hate the greedy fuckers that pontificate about taxing me. Armchair wankers can go create a business then gift their ill-gotten gains to their own governments. Just beware that the median return for a founder is approximately $0.
But we already knew all that! We don't need numbers calculating out infinitesimally small fictitious "tax rates" (for a tax regime that doesn't actually exist) to illustrate it. Unless someone is actively selling the stock they own, they are not paying any income tax on its value, period end of story.
And so rather it feels like a wasted analysis to keep focusing on the value of zero divided by $big_number, when there are going to be far more interesting things like exactly what income did they realize, and what type of expenses did they use to offset it, what amounts did they actually pay tax on, and so on. Because capital gains deferral is not the only way the tax code skews towards the rich by far, yet it's currently using up all the air in the room.