
Majority of Americans favor wealth tax on very rich: poll - elsewhen
https://www.reuters.com/article/us-usa-election-inequality-poll-idUSKBN1Z9141
======
ohazi
I'm skeptical that most respondents understood the questions correctly.

Most people are familiar with income tax, because they know that money is
removed from their paycheck every month. Many also file tax returns.

A wealth tax, where a fraction of your _bank_ balance is removed every month,
is a totally alien concept to most people. If you haven't thought about it
before, it can take a minute or two to wrap your head around what it would
actually mean.

In a survey context, all of these questions can be answered on autopilot by
mistaking "wealth tax for rich people" with " _higher_ taxes for rich people,"
which are definitely not the same thing.

Whether or not you think a wealth tax is a good idea, I don't think we should
let politicians sneak this through unless we're confident that the public
actually understands what is being proposed. As other comments mentioned,
income taxes started out as "wealthy only" and have since trickled down to the
working poor.

I don't think most Americans want a tax on their bank balance.

Edit: No, I'm not arguing that people are dumb, just that they tend to rush
through surveys. When rushing, I think this would be an easy mistake to make.

~~~
spamizbad
> A wealth tax, where a fraction of your bank balance is removed every month,
> is a totally alien concept to most people. If you haven't thought about it
> before, it can take a minute or two to wrap your head around what it would
> actually mean.

Many Americans already experience a form of wealth tax: property tax. You are
taxed a percentage of the value of your property, something not terribly
liquid.

Incidentally, a handful of states prefer to tax wealth in the form of property
rather than income (Alaska, Florida, Nevada, South Dakota, Texas, Washington,
and Wyoming)

~~~
ohazi
1\. Many people rent, and have never seen a property tax bill, despite paying
it indirectly via their landlord.

2\. It's not the same thing. You can choose how extravagant a house to live in
relative to your total wealth and your income to make sure that you can cover
the property tax bill while still meeting your saving goals.

An "everything else" wealth tax, (by definition) doesn't allow you to do that.
Your control over how aggressively you want to save or spend is greatly
reduced by an overall wealth tax.

~~~
spamizbad
> 2\. It's not the same thing. You can choose how extravagant a house to live
> in relative to your total wealth and your income to make sure that you can
> cover the property tax bill while still meeting your saving goals.

This isn't really true. Yes, I can control the value of my home _at a single
point in time_ but if my neighborhood gentrifies, even if I make no
improvements to my home, my taxes will go up. You can technically plead your
case to the tax assessor and argue that because your bathrooms and kitchens
are "obsolete" you technically shouldn't be valued as high as your neighbors
but your taxes are going up regardless.

I understand that in California there are rules around how often they can
raise your property taxes, but for nearly everyone else if your home value
goes up so will your taxes.

~~~
ohazi
You can move when it gets too unbearable. You wouldn't be able to do the same
with your savings.

~~~
munk-a
Moving isn't free, and it can be a burdensome expense. When the housing crisis
a lot of people had personal financial issues because divesting from the
mortgage they were engaged with and acquiring a more modest property would
still involve being taxed on the full value of your house, expenses involved
with the mechanics of changing residences, and then somehow affording a down
payment on a new place - or else being forced to declare bankruptcy and re-
enter the renting market with nothing but fresh income.

The technical concept is that housing is an illiquid asset - there is a
friction in converting it to cash, that friction may be monetary (a fee,
taxes, a loss of value, sale prices etc...) or it may be time (conversion may
simply not be an action that can be executed at will, there may be windows or
complex ownership hand-off processes that require weird timing) in the most
common cases (including housing) the asset is liquidatable with value
generally decrease relative to speed, offloading a property with a fixed
window of a month will net you less revenue then having a sale posted for an
extended period - having a sale window of a week or less would almost
certainly result in a much decreased sale price.

------
aazaa
> A wealth tax is levied on an individual’s net worth, such as stocks, bonds
> and real estate, as well as cash holdings, similar in concept to property
> taxes. It is separate from an income tax, which applies to wages, interest
> and dividends, among other sources.

One often overlooked issue with a wealth tax is the damaging effect on
financial privacy.

The income tax already has the IRS probing into nooks and crannies it has no
business probing. It deputizes law-abiding businesses to snitch on each other
through the obligation to report payments.

A wealth tax would ratchet the surveillance up even further. Not, not just
income statements, but asset statements would be required. Enforcement would
likely require reams of new compulsory snitching laws for sellers of property.
It's not an outcome I think many respondents have though through much because
privacy still flies well below the radar in the US.

Then there are unintended consequences. If you tax income, it re-appears as
capital appreciation. If you tax assets, they will re-appear as invisible
wealth. That's an outcome for which I doubt most in the country are prepared.

~~~
fatnoah
> similar in concept to property taxes

All other merits aside, is it really similar to a property tax? I pay property
taxes every quarter and I have just as much property as I started with. The
value of the property also doesn't go down every tax cycle as a result. With a
wealth tax, the person's wealth would decrease to a minimum at some point.

~~~
kevingadd
The distinction between wealth and property seems pretty fuzzy here and it's
hard to clearly reason about this without addressing it. Property taxes are a
great example - you're paying them on things like houses to support local
infrastructure, right? And you still have the property afterward.

So let's say you don't want to pay a wealth tax on the money in your bank
account - buy a house with it. Now you're not paying a wealth tax, because
it's a house instead of US dollars. Instead, you're paying a property tax! If
the wealth tax is too onerous you can just park that wealth in a house or
something instead, maybe rent the house out (with the help of a management
company) and make money off it. That's good, right? Get the economy going,
create jobs, and you get a return on your investment.

To me even if a wealth tax isn't the right solution here (I'm not convinced,
and I'm not sure it's feasible to implement), the distinction between "wealth"
and "taxable property" is kind of arbitrary nonsense at this point.

If everyone is taxed fairly, you can eliminate lots of means testing and
systemic complexity because everyone's paying in so everyone has equal right
to access all of the systems and benefits a functioning state can have to
offer, whether it's health care, public transit, education, etc.

------
nostromo
It's worth noting that the income tax also started out as a tax on the very
rich.

Once established, taxes have a way of finding their way from the rich, to the
middle-class, and then even to the working poor.

~~~
throwno
This is why the wealth tax will fail to fix inequality. Eventually your
parents shitty 250k house out in the sticks will qualify for wealth tax.
Whatever stocks you have that aren't in a retirement account will be wealth
taxed even though half their growth is just from inflation. It's going to
suck.

~~~
akhilcacharya
In most places it already qualifies for a wealth tax in the form of a property
tax...

~~~
sct202
Exactly! A huge portion of the middle class's wealth is tied up in property
equity that is taxed every year. The ultra wealthy's wealth is primarily in
business ownership or equity which is only taxed on gains when it's sold.

~~~
xienze
> primarily in business ownership

Businesses which employ people and pay a whole host of taxes every year...

> or equity which is only taxed on gains when it's sold.

How would it be fair to tax someone on an asset that only has a theoretical
value, which isn’t realized until it’s actually sold?

~~~
SkyBelow
For the latter, the option would be to allow the person to sell at that
amount. Thus if the government over estimated the worth you are capable of
selling. This works far better with large businesses than homes due to the
impact of emotional value.

------
nojvek
Here’s where things get tricky. The ultra wealthy have most of their wealth
tied up in stocks/bonds.

Bill Gates and Bezos are the worlds richest because they have >1% ownership in
their founding companies.

The rich get richer because the stock market and their companies are doing
well. They own means of production.

Capital gains tax rate means if you hold stock for more than an year and sell
it, you get taxed a bit less. There’s an incentive for longer term ownership.

Like property taxes, what if you taxed holding stock? Then that’s unfair as
AMT crap. Holding stock is fake money. It could disappear in thin air when
market crashes. Gains are only realized when you sell.

But when you sell, you still pay income tax.

So if a billionaire has ownership in his founding company but draws <100k of
real income from stock, should they be taxed higher than a person who just
makes 100k of salary?

I’m all for higher tax percentages at higher incomes but all of it gets very
murky.

America was built on the foundations of if you work hard and build something
great and have a pie of ownership, you get to reap the rewards.

Removing this ^ incentive causes all sorts of issues in other parts.

I would love estate tax to have a higher tax rate. Transferring property to
kids shouldn’t be cheap since they didn’t do the hard work.

I would also love taxes to be 0 below a certain income bracket.

I would also love some form of aid when unemployed/ on the streets. Some sort
of buffer. Better affordable healthcare. Less middleman. More transparency.

A lot of this problems aren’t money related but more about refactoring the
current way of things and making more efficient use of what’s currently
already there.

My 2 cents. Would love to debate.

------
nightski
I feel the wealth inequality issue needs to be addressed. My only problem with
the wealth tax is that it takes money from the wealthy and feeds it to the
government. I am having a hard time connecting how that improves the situation
of the lower and middle classes.

~~~
jandrese
Yeah, it is a total mystery how adequately funding social welfare programs
could somehow help the poor.

~~~
onepointsixC
Benefits and welfare programs have been increasing dramatically as a
percentage of GDP.

~~~
kevingadd
If the welfare programs are functioning correctly, any decrease in overall
population wealth and/or income would naturally have to raise the welfare
spend. The alternative would be for the newly poor to suffer and/or die in
poverty, because only the existing poor were being assisted by the programs.
Incidentally that does seem to be how much of the US safety net is designed to
work and we've been actively trying to push more needy people out of the
benefits programs, so that's something.

This is a feedback loop. If "spend is going up" is somehow justification for
cutting welfare programs or for not funding them, how does that fix anything?
The ideal would be to have more than enough funding for all your programs,
then work on ideal ways to utilize the extra funding. In the end if there's a
surplus you can always cut taxes on the rich again, since US lawmakers are
constantly trying to do it anyway.

------
txsoftwaredev
Why would the ultra wealthy not just store their assets in another country?
Businesses and individuals routinely move to different states to avoid higher
taxes.

~~~
virmundi
Because so much of their wealth are denominated in US equities. If your stocks
are in the NY stock exchange, you can’t move them beyond the US government’s
reach.

------
m11a
The biggest issue I have with this is:

> "the very rich should be allowed to keep the money they have, even if that
> means increasing inequality,"

Wording a question like that is so... biased. Maybe we should work on fixing
how the _enormous_ amount of tax money is spent now before asking taxpayers
for more? $700bn in funding for military (around $1tn all funds considered),
yet there's "increasing inequality". US spends 2x the amount the UK does on
health per capita, yet the UK can afford single payer health. Administration
costs are through the roof.

I think this is a case where "throwing more money at the problem" isn't the
right solution.

~~~
DuskStar
Hell, there's NOT increasing inequality by sane definitions - meaning if you
count government taxes and transfers. Yes, pre-tax, no-transfer income
inequality has increased, but _by definition_ increasing taxes and transfers
won't fix that. And once you include ss/welfare/snap/eitc/etc as well as
taxes, income inequality today has barely changed over the past century.

And the recent "increasing wealth inequality" papers have based on the dubious
assumption that "wealth = capital gains income / risk-free instantaneous rate
of return", [0] which means that wealth goes up as interest rates go down if
income holds steady.

0: [https://johnhcochrane.blogspot.com/2020/01/wealth-and-
taxes-...](https://johnhcochrane.blogspot.com/2020/01/wealth-and-taxes-
part-v.html)

------
RickJWagner
I tend to vote Republican, I don't oppose a more progressive tax. So long as
the heavier taxes stay safely above middle class, I think it's a fair idea.

To get broad support, crafty lefties need only emphasize how much the taxes
will affect Hollywood blowhards. That'll make the whole thing much more
palatable to those on the right side of the aisle.

------
mech1234
The 2% wealth tax idea floated by Warren is an insanely high number. It sounds
small because people don't understand finance.

A 4% withdrawal rate is about the most you can expect to indefinitely draw on
a balanced portfolio without it disappearing in a relatively small number of
years. A 2% wealth tax takes half of this.

------
jshaqaw
Most everyone supports a wealth tax. Most everyone thinks wealth starts at a
level way higher than themselves.

------
tempsy
I honestly think so much of what we take as "normal" in society today will
change dramatically once Millennials become dominant holders of political
offices.

~~~
jshaqaw
Or much of what millennials believe will shift when they become middle aged
and holders of reasonable positive net worth.

~~~
tempsy
nope...clear most millennials will be worse off than parents into middle age.

------
apta
What's the cutoff for a "very rich" person when it comes to these taxes?

~~~
Miner49er
Bernie's wealth tax starts at a wealth of $32 million.

------
esoterica
Just tax capital gains as income if you want to hit the rich.

Wealth taxes are both harder to implement and enforce than income taxes (e.g.
how do you appraise an illiquid asset) while conferring no meaningful
advantages.

~~~
Miner49er
Why not both? I believe Bernie's plan, for example, is to do both.

~~~
esoterica
Because wealth taxes are harder to implement than income taxes while being
economically isomorphic to them. The great triumph of financialization is
establishing a clear equivalence between present value and future cash flows,
so taxing one vs the other is tomato tomato.

------
forrestthewoods
Yes. People often favor vague concepts that don’t appear to impact them. And
often oppose actual policies when one is written and subjected to scrutiny.
The devil is always in the details.

------
dorchadas
Just wanted to say, I'm currently reading _Good Economics for Hard Times_ by
Banerjee and Duflo (the 2019 Nobel Prize winners), and it talks about this.
It's a really interesting read about how we can make a more just society
without giving up on capitalism as a whole, and quite a shocking transition
from what you hear a lot on TV or from older economists (about trickle down,
etc.). I'd recommend everyone read it; I got it from library, but now want to
go buy my own copy to keep coming back to and rereading.

------
Pigo
A lot of people think we didn't land on the moon, and that the Earth is flat.

------
lawnchair_larry
Alternative title: Majority of Americans are not rich, and therefore see no
downside to taking from those who are

I do think the inequality gap is becoming more of a problem, but simply asking
the population if they want someone else to pay more is going to have the
obvious result.

~~~
keanzu
The tyranny of the majority is a weakness inherent to majority rule in which
the majority of an electorate pursues exclusively its own interests at the
expense of those in the minority. This results in oppression of minority
groups comparable to that of a tyrant or despot.

~~~
sephlietz
Rich, powerful people are not oppressed. Taxes are not oppression.

------
mindcrime
So much of what needs to be said on this subject has already been said, and
said long ago. I'll just leave this here:

 _What is law? What ought it to be? What is its domain? What are its limits?
Where, in fact, does the prerogative of the legislator stop? I have no
hesitation in answering, Law is common force organized to prevent
injustice;—in short, Law is Justice. It is not true that the legislator has
absolute power over our persons and property, since they pre-exist, and his
work is only to secure them from injury. It is not true that the mission of
the law is to regulate our consciences, our ideas, our will, our education,
our sentiments, our works, our exchanges, our gifts, our enjoyments. Its
mission is to prevent the rights of one from interfering with those of
another, in any one of these things._

 _Law, because it has force for its necessary sanction, can only have the
domain of force, which is justice. And as every individual has a right to have
recourse to force only in cases of lawful defense, so collective force, so
which is only the union of individual forces, cannot be rationally used for
any other end. The law, then, is solely the organization of individual rights
that existed before law._

###

 _Legal plunder has two roots: one of them, as we have already seen, is in
human greed; the other is in misconceived philanthropy. Before I proceed, I
think I ought to explain myself upon the word plunder. I do not take it, as it
often is taken, in a vague, undefined, relative, or metaphorical sense. I use
it in its scientific acceptation, and as expressing the opposite idea to
property. When a portion of wealth passes out of the hands of him who has
acquired it, without his consent, and without compensation, to him who has not
created it, whether by force or by artifice, I say that property is violated,
that plunder is perpetrated. I say that this is exactly what the law ought to
repress always and everywhere. If the law itself performs the action it ought
to repress, I say that plunder is still perpetrated, and even, in a social
point of view, under aggravated circumstances. In this case, however, he who
profits from the plunder is not responsible for it; it is the law, the
lawgiver, society itself, and this is where the political danger lies._

 _It is to be regretted that there is something offensive in the word. I have
sought in vain for another, for I would not wish at any time, and especially
just now, to add an irritating word to our disagreements; therefore, whether I
am believed or not, I declare that I do not mean to impugn the intentions nor
the morality of anybody. I am attacking an idea that I believe to be false—a
system that appears to me to be unjust; and this is so independent of
intentions, that each of us profits by it without wishing it, and suffers from
it without being aware of the cause._

 _Any person must write under the influence of party spirit or of fear, who
would call into question the sincerity of protectionism, of socialism, and
even of communism, which are one and the same plant, in three different
periods of its growth. All that can be said is, that plunder is more visible
by its partiality in protectionism, 3 and by its universality in communism;
whence it follows that, of the three systems, socialism is still the most
vague, the most undefined, and consequently the most sincere. Be that as it
may, to conclude that legal plunder has one of its roots in misconceived
philanthropy, is evidently to put intentions out of the question._

 _With this understanding, let us examine the value, the origin, and the
tendency of this popular aspiration, which pretends to realize the general
good by general plunder. The Socialists say, since the law organizes justice,
why should it not organize labor, instruction, and religion? Why? Because it
could not organize labor, instruction, and religion, without disorganizing
justice. For remember, that law is force, and that consequently the domain of
the law cannot properly extend beyond the domain of force._

Bastiat - The Law

[http://www.gutenberg.org/files/44800/44800-h/44800-h.htm](http://www.gutenberg.org/files/44800/44800-h/44800-h.htm)

------
derp_dee_derp
this is a classic case of tyranny of the majority.

Majority of Americans favor stealing wealth from others.

~~~
akdetrick
The average worker is 5x more productive than they were 30 years ago, but
wages have been basically flat.

In the last 10 years, the federal minimum wage has not risen, effectively
reducing the minimum wage by about $1 due to inflation.

The richest 500 people in the world grew their wealth by $1.2 trillion in
2019, a 25% increase over a period of one year.

The minority build their wealth on the labor and taxes of the majority, but
sure, adjusting the tax code is "stealing".

~~~
sdinsn
> The average worker is 5x more productive

Productivity isn't due to workers alone. Most productivity has been gained
through technological advances.

~~~
skitout
Sure, but how do we used to share the increase in productivity ? How do we
share it now ? How should we share it ? ; My feeling is workers had been the
"loser" those last 30 years in how are shared the productivity gain. Ethically
I find it wrong. Economically this did not seemed to offer more growth or
positive outcome...

------
zaphod420
This is good for Bitcoin.

~~~
m11a
Indeed!

Rather than losing 5% of your wealth in the form of taxes to the US
government, you can lose 200% in the form of cryptocurrency wealth
redistribution and volatility.

------
0x8BADF00D
A wealth tax is unconstitutional. From the Constitution:

“Representatives and direct taxes shall be apportioned among the several
states which may be included within this union, according to their respective
numbers, which shall be determined by adding to the whole number of free
persons, including those bound to service for a term of years, and excluding
Indians not taxed, three fifths of all other Persons.“

How do you calculate a wealth tax on a house? How about a piece of art? This
is nonsensical and shows how uneducated the average American is, to support
this socialist nonsense.

~~~
ben509
> How about a piece of art?

They already have to do it to determine tax deductions. It's pretty
subjective: [https://www.irs.gov/appeals/art-appraisal-
services](https://www.irs.gov/appeals/art-appraisal-services)

------
throwawaysea
Almost every country that has enacted a wealth tax has repealed it. And the
version that Elizabeth Warren is proposing is fairly extreme - her 3% wealth
tax rate would be double the 1.5% rate that France ended up repealing
([https://www.bloomberg.com/opinion/articles/2019-11-14/france...](https://www.bloomberg.com/opinion/articles/2019-11-14/france-
s-wealth-tax-should-be-a-warning-for-warren-and-sanders)). Personally I can’t
get behind this idea because it just feels like it is taking away something
you’ve already earned and own outright for whatever purpose you want. It
waters down the concept of private ownership, which is a gateway for other
erosions of individual rights.

I also just can’t see the government putting a large general fund to good use.
This image shows what various billionaires would have been left with if a
wealth tax were in place since 1982
([https://media.newyorker.com/photos/5d7a63377d7e360008bd5fbe/...](https://media.newyorker.com/photos/5d7a63377d7e360008bd5fbe/master/w_1454,c_limit/Cassidy-
WealthTax-3-final.png)). Bill Gates would have only $36b left - and he’s
donated around that much to his foundation. Clearly if he felt the government
was good at allocating and efficiently spending large funds, he would have
given the government a bigger payment
([https://fiscal.treasury.gov/public/gifts-to-
government.html](https://fiscal.treasury.gov/public/gifts-to-government.html))
rather than starting his own foundation. This is why I don’t buy his recently
claimed support for a wealth tax.

~~~
apta
> it is taking away something you’ve already earned and own outright for
> whatever purpose you want

The same applies to income tax.

~~~
pb7
Wealth tax is double (infinite?) taxation.

------
akhilcacharya
I don't really care about wealth inequality, but from a revenue perspective a
wealth tax seems _fantastic_ _if_ can be enacted and enforced.

Bill Gates came out in favor of a limited wealth tax as well - I think a mild
cost to citizenship for the uber-wealthy is a great idea. Feels like political
malpractice to not attempt it.

Sidebar:

> Kathy Herron, 56, a Republican who lives in Santa Rosa, California, said her
> support for Trump - a self-proclaimed billionaire - stems from his hardline
> policies on illegal immigration. In her view, the president would do well to
> support higher taxes on rich Americans. “We’re taxed from one end to the
> other, and it just seems the rich don’t pay their share,” she said.

Welfare chauvinism is an underrated political force in America. The next re-
alignment will most likely be along these lines.

~~~
lnanek2
> from a revenue perspective a wealth tax seems fantastic

Amusingly, the current manifesto re wealth inequality, Capital in the Twenty-
First Century, pointed out that confiscatory taxes on the rich would be
pointless re a revenue perspective. It turns out there are so few rich (e.g.
the 1%) that even if you take all their money, it doesn't really dent our
large government expenditures spent on the majority.

E.g. if the top tax rate went up to 70%, that would only be an extra 320
billion, which is only half medicare.

~~~
makomk
Which is of course exactly why politicians are pushing the idea of a wealth
tax so hard. You can't get the kind of money required to fund their projects
just by taxing the income of the rich. In order to come up with plausible-
sounding figures and push their narrative that their proposals would totally
be affordable if only we could make the evil wealthy pay up, they have to
suggest converting a substantial proportion of the ultra-wealthy's total
wealth into immediate, actual spending every year.

------
Bostonian
If 99% of people vote to impose a tax paid only by 1%, that violates the
spirit of "no taxation without representation". That would be universally
recognized if, for example, the right-handed voted to raise taxes on the left-
handed.

Related article: "Millionaires support a wealth tax — as long as they aren’t
getting taxed: CNBC survey" [https://www.cnbc.com/2019/12/23/millionaires-
support-a-wealt...](https://www.cnbc.com/2019/12/23/millionaires-support-a-
wealth-tax-as-long-as-they-arent-getting-taxed.html) . It found that the
majority of millionaires supported a wealth tax that kicks in at $50 million,
but not at $10 million -- because they fear it would hit them, now or in the
future.

Using the tax code to pull people down is morally wrong.

~~~
Frondo
I'm confused. There are many taxes that only apply to a subset of people.
Property taxes only apply to property owners, soda taxes only apply to people
buying soda, gas taxes to people buying gas. Tax credits apply to certain
people, too, like the EITC or mortgage credits.

What makes this qualitatively different to you?

Also, everyone can vote, so everyone in theory has equal representation. (in
practice, the wealthy have a lot more time in their reps' ears than the poor,
so they arguably already have a greater representation than your typical
voter.)

~~~
dx87
All the taxes you listed are tied to specific things. A generic wealth tax is
saying that no matter how you got your money, there should be a cap on it.
It's like locality pay, but on a national scale. I don't know if it's the
right idea or not, but it's application is arbitrary enough that it's
different than the other taxes.

