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Even if "innovative" was just a synonym of "original", it's not even an original idea, as many European countries have already tried a wealth tax -- and I'm fairly certain every country that has tried it has repealed it not long after.



Was the repeal a result of it not working, or a result of a more billionaire-friendly party returning to power?


"Working" in the political arena has a flexible meaning. They "work" in terms of, yes, they collect money.

However, they always collect way less money than the people who made the initial promises said, because the people who were making the promises always assume that if they tax wealth at 75%, their income will be 75% of the current tax base, at the time the wealth tax is proposed and/or passed. The problem is, if you make staying within your tax zone suddenly cost, say, literally 3 billion dollars (and that's the sort of thing we're talking about here), then you just gave the wealth a 3 billion dollar incentive to leave before your tax can come into effect, and the end result is the tax base is much smaller than was anticipated.

So they don't "work" in the sense that they will not collect anything near what the advocates promise they will, and they also chase the wealth away, which, for all the rhetoric about inequality and such, isn't necessarily a good thing for a polity. Generally when people want "equality", they want their wealth level to be raised, not to attain "equality" by lowering the average wealth level. Chasing, say, Jeff Bezos out of the country, along with whatever bits of Amazon he decides to take with him, is not going to be a net gain for the US, just as one example.

They also "work" in the sense that the Gini coefficient probably will indeed go down, so advocates can claim success. But it may not be what you were looking for.

(Also, for the record, I am neither particularly celebrating nor particularly condemning anything or anyone here. This is just how the incentives line up. You can't wish incentive structures away. Effective law takes incentives into account and harnesses them for the desired result. Generally, solving the Big Problems requires something other than the most obvious, direct approach, because there's a selection effect; if the most obvious, direct approach solved the problem, we wouldn't have it.)


> then you just gave the wealth a 3 billion dollar incentive to leave before your tax can come into effect

You can impose tax on leaving bigger than 3 billion dollars effectively removing leaving incentive.

Also you are assuming they are fluid and actually can leave and stay wealthy somewhere else, which is likely not the case for most of the wealth on the planet.


"You can impose tax on leaving bigger than 3 billion dollars effectively removing leaving incentive."

In the US, the country in question, you'd have some constitutional problems with that plan. That's a bad thing; you need this wealth confiscation to be clearly legal, because you have incentivized billions of dollars worth of legal expenditure to prevent it from happening. (There's those nasty incentives again.)

Also, it turns out that demonstrating to the entire world that you'll just take whatever you want, whenever you want, and punish anyone who tries to protect themselves from that, doesn't exactly incentivize a healthy business environment or encourage the kind of investment you need to create the wealth that you need to bring inequality down by bringing most people up. People need predictability to make plans for the future; this sort of thing extremely strongly incentivizes even shorter term planning than we sometimes get, because nobody knows whether you're going to come along and take most of their stuff tomorrow, or even retroactively. It's not a good plan to create a wealth-producing society.

It's really, really easy to "solve" the wealth inequality problem by simply destroying all (or almost all) wealth, everywhere. It's been done in several countries in the past century. It's not usually the solution people want when they're talking about wealth inequality... oh, they might take a small hit in spite if they knew it was really going to stick it to those "wealthy fat cats", but for the most part, people expect the end of "wealth inequality" to increase their own wealth, not destroy it.

"Also you are assuming they are fluid and actually can leave and stay wealthy somewhere else, which is likely not the case for most of the wealth on the planet."

It is the case for the sort of wealth we are talking about, though. Yes, you can indeed tax the lower and lower-middle classes very hard, because they tend to be unable to move. Not exactly a "wealth" tax anymore, though, is it? Billionaires can move wealth. After all, if we're talking a 75% confiscation rate, it's worth it to move overseas even if they take a 50% bath. Billions of dollars worth of incentives cover a lot of things.


You are sooo right. I hate when people make a promise to change a system by changing one variable and pretending that all the other related variables will not change at all. Tax the rich is just a soundbite. There are lots of ways to close tax loopholes. We need to raise taxes by creating the right incentives.


Almost certainly the later.

I know this is a hawkish view, but certain individuals have so much wealth and political influence that it's not so far fetched to consider them like a hostile sovereignty that has effective regulatory capture of the the countries they exist in. People generally don't like to be treated like serfs. The taxes will eventually stick, or there will be trouble.


They still have it where I live (Catalonia, Spain).

Also, the fact that was repealed doesn’t really say whether or not it was a good policy or not.


A clever twist in Warren's proposal is that the Government has the right to buy your property for whatever you've listed it for.

Now I'm sure any attempt to actually do that would end in a court case, but it's not really worth the risk to the owner of said wealth to offer the government all your Rembrants at bargain basement prices.


What value goes down on paper? The value that something has to you? The price that someone else would pay?

Let say you have Warren Buffett's shoes.

Warren Buffett paid $X for those shoes.

A pair of new shoes would cost him $Y.

Someone might pay $Z as they are Warren Buffett's shoes.

Someone might pay $V just to inconvenience Warren (so he would have to go to the shoe store).

Maybe they have some sentimental value to Warren, so he would pay $T not to lose them.

What are the shoes worth?


> What value goes down on paper? The value that something has to you? The price that someone else would pay?

I mean, I don't know anything beyond what the person you're responding to said, but they made it pretty clear:

> the Government has the right to buy your property for whatever you've listed it for


Couldn't they just offshore their assets?


Only the government for privacy's sake?


Why is the government buying property?


I think Argentina has a an asset tax on anything above USD $300,000 at 0.75% but they also have basis adjustments for inflation which I think is fair. The basis of all your assets increases as a result of inflation.


Spain, Belgium, Switzerland and Norway have some form of a wealth tax, and it can bring them between 0.5 to 3+% of total revenue.

If America could raise 1% of its revenue from wealth taxes, that would be a yearly revenue of ~$31.8B.

For reference, NASA's yearly budget is around $21B, and the cost of free college for all Americans would be around $45B depending on plan and how aggressive a single payer could reduce costs.




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