
The Swiss town that taxes its wealthy without scaring them away - alex_young
https://www.ft.com/content/87ccaf2e-2ddd-11e9-8744-e7016697f225
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j_walter
I'm confused by the comment "also confiscates a fixed portion of its
residents’ net wealth every year" that is followed up by "each additional
SFr1m ($997,000) the richest Zug residents put in the bank incurs an annual
tax bill of SFr3,000". So...is it based on net wealth or how much is in your
bank account. Most of the article seems to revolve around net wealth. Most
billionaires don't have billions in a bank account, it's in stock. The actual
net worth calculation is non-existent in the article.

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alex_young
Switzerland wealth taxes are on all wealth (real estate, assets, financial
instruments, etc.) held worldwide.

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sparker72678
With all the wealth tax conversations, I feel like the most obvious solution
is to just raise the capital gains rates, or ideally, just tax all capital
gains as income, which is already progressively taxed.

What am I missing? Is it just that it's politically impossible?

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dragonwriter
There is a good argument for treating income earned over a period of greater
than one year, even if realized in one moment, differently than income earned
within a year in a system of progressive annual taxation, which is (inasmuch
as there is one) the fairness argument for favorable treatment of long-term
capital gains (it misses other kinds of extended payoff income and is not
perfectly targeted in the case of LTCG, though.)

So, yes, you _should_ treat capital income the same as other income, but you
should also address the fairness issue.

The best way I see of doing that is replacing favorable treatment of long-term
gains with (1) unlimited ability to recognize gains in advance of realization
for tax purposes, and to apply any such unused advance-recognized gains
against current income for tax purposes, and (2) generous, but limited,
ability to defer recognition of “windfall” gains for tax purposes. This would
also avoid giving the favorable treatment appropriately due to non repeatable
income to those with large capital assets that they can structure to provide
continuous stream of “long-term” gains if the system is going to give them a
tax break to do it that way.

And, unlike throwing a wealth tax on top, this would be an overall
_simplification_ of the tax system compared to the status quo.

