If you could choose, would you prefer to be taxed on income or NW? For example, instead of paying 40%+ income tax during your career, you get to keep it all in exchange for paying 2% of your NW in annual taxes forever (with a standard deduction of around $500k NW before you have to start paying taxes). I could see this being a better way to balance out tax burdens so that the disproportionately wealthy could contribute accordingly. Elon Musk would end up paying around $6B with his current NW of $300B.
Net worth is easily skewed with certain assets like art. Income tax is exact.
Taxation is theft.
You guys are paying taxes?
Net worth. Taxing an activity effectively punishes it. Income tax punishes working. Wealth tax punishes hoarding. And game theory provides ways to account for wealth accurately.
by that logic net worth tax punishes growth and promotes poverty...
Not necessarily. Redistribute wealth from the rich to the poor; give the poor enough money to invest some of it; eliminate corporate taxes; tax the rich at higher rates. Investment is still worthwhile, so the economy still grows, but the dividends are distributed more equitably. Which means a broader class of people benefit from their own society's prosperity.
Taxing NW instead would incentivize work/productivity and disincentivize sitting on your cash. Sure it would have problems with reporting and auditing, but I cannot think of a better incentive structure for a more productive and more equal society.
Depends on which bucket I fall into
In a theoretical/perfect world, a wealth tax would encourage consumption over savings which arguably is better for the overall economy But it is extremely problematic to enforce and probably is the reason it hasn't been implemented successfully at any scale. The ones that have wealth taxes are usually set quite low, much lower than 2% to not push too many people to evade. At the low % the mega wealthy likely will evade more than the middle/upper class I imagine more 'targeted' taxation that is not a comprehensive wealth tax but targeting the tools wealthy use -- eg expanding the charitable foundation tax to more kinds of trusts. We already see the BBB proposal to further increase marginal tax rates for very high income, though unfortunately they will spend 10 years worth of revenue raises on much less benefits so they'll have to chase more revenue if the Dems can stay in power
I would rather have a net worth tax. All the net worth tax was on people with over a billion. They might have to drop it to 100 million as the exemption for net worth tax. I don't have a $100 million so I would pay zero in tax
Well, you might climb in NW faster since there is no more income tax in that scenario.
My net worth is good enough to live and enjoy life. It's not large enough that I would attract a net worth tax. Income tax will hit me every year. Income tax even hit's poor people and working class people and middle class people. I'm pretty much upper middle class.
Net worth tax is just an euphemism for wealth redistribution. Nice try commies.
Taxes are wealth redistribution, we just do it backwards in the US. Take from the poor and middle class, give to the billionaires and label it defense spending. The fascist, corrupt, authoritarian commies are the ruling class with their corporate welfare programs. Very few politicians actually standing up for us.
How do you determine someone's NW? What point in time do you use to calculate it? 31st Dec? What happens if the net worth crashes by 50% by the time it comes to pay the taxes? So many more questions, even ignoring how people can make it seem like they are worth nothing on paper. It's just not practical, personally I donate x% of my NW every year, but I'd rather pick where it goes.
Looking for good charities to donate to. I usually just end up doing Givewell. What'd you give to?
If your NW drops, you can pay less the following year. You yourself can calculate it when donating, why are you having such a hard time imagining this being implemented?