Elizabeth Warren Proposes "Wealth Tax"

This woman was almost President - she was second in line behind Joe Biden for Democratic nominee.

Senator Elizabeth Warren wants a wealth tax on rich people.

That's right, she wants to tax actual wealth they have, not just their income.

That means after they earn money and pay taxes on that earned money, and then move that money into their savings, they would still have to pay taxes on it every year.

This month Elizabeth Warren proposed the "Ultra Millionaire Tax Act", which would apply a 2% annual levy on households and trusts valued at between $50 million and $1 billion. All net worth over $1 billion would be taxed at 3%.

So what, you might ask. These are rich people. Well, if they can do it to them, you know it won't be too far down the line when they'll start eyeing the bank accounts of people with less money.


This type of idea is not completely unprecedented. In Australia there have been serious proposals for negative interest rates. That's where you have to pay money to keep your money in the bank. Who would keep their money in the bank with this sort of thing going on? Well the country has begun subtly making moves towards the direction of a cashless society. The Australian government recently passed a law making it illegal to make large purchases in cash (including gold/silver and foreign currencies). It has to be done through a bank or credit card or other financial institution. This caused an uproar among conservatives because many suspected it was the first step towards being able to implement the idea of negative interest rates. If you can't use cash, or the cash doesn't exist in physical form, you would be forced to keep it in the bank.

Apparently there are some economists who are frustrated that government can't push interest rates below zero, and think negative interest rates would force people to spend money and stimulate the economy. (or at least that's the excuse)


Elizabeth Warren's idea apparently was too extreme even for Bill Gates, who remarked in a recent interview about higher taxes that there were "some proposals that seem to go too far".

https://www.msn.com/en-us/money/oth...s-have-gone-too-far/ar-BB1eLH8m?ocid=msedgntp


And let's not forget that Elizabeth Warren was considered one of the more "moderate" candidates for Democratic nominee, compared to most of the others. (The only one more moderate than her was Biden)

Let's do a little math. With a 2% wealth tax, if you had $100, half it would be gone in 35 years.

Or suppose banks were paying a 2% interest rate. Well then, if you put $100 in the bank, that money would not grow. It would be lent out to someone else to make a profit, but you would not get that profit.

At a 3% wealth tax rate, half your money would be gone after 23 years.



Oh and by the way, even this wealth tax that Elizabeth Warren is proposing, on households with wealth of over $50 million, would still only add $78 million to the government revenues - that's really a tiny drop in the bucket. You know they're going to start looking at households with lower amounts of wealth - say $10 million or $2 million. That's really where most of the money is. (There's just not actually that many super-rich people)

You people don't know progressives. If they see wealth, they want to grab it and immediately spend it.

Look, I have no problem with higher taxes on the rich, but I've gotten to know some of these people in discussions on other forums, and if they were able to get their way, the country would end up bankrupt like Greece. Not just the country but they would bankrupt the entire economy. Margaret Thatcher's quote may sound like an implausibly absurd caricature of the Left, and simplistically cliche, but sadly it probably does capture an element of truth; "The problem with socialism is that you eventually run out of other people's money." They just can't help themselves, it's in their nature.

 

They can’t help themselves. I don’t really believe thats who she is she’s just been programmed, most likely self programmed. It’s like breathing, we never think about it we just do it.
They can’t help themselves. They will tax the billionaires, then the mega millionaires, then the millionaires then hit us regular old working stiffs with higher taxes. So they can give it to those who don’t contribute.
Eventually they run out of other peoples money to steal.

 

Not only would this be a problem for trust fund babies, but it would also take a bite out of trust funds set up to continue to fund causes that the founder wanted to keep funded and active even after their death.

So, if you drive downtown, you might see flower boxes/hanging baskets full of flowers set up by the town who received an account set up by a late town resident who always wanted the town to be beautiful long after they were gone.

 

Would this apply to college endowments?

 

Garbage. They give the non-contributing privileged rich an order of magnitude more than the non-contributing poor (~30% of GDP vs ~3%) though the former number an order of magnitude fewer (~1% of the population vs ~10%).

The rich? No, they'll just keep stealing it, because they are legally entitled to.

 

You've got to be kidding. No one with over 50M is relying on the interest a bank pays. That's not how you get that kind of money. I personally know a guy who invests in blue chip stocks and so far in his best month he made 10% on his money. That's one month. Two percent tax on his wealth would hardly be pocket change for him.

 

In other words you are claiming that all rich people make huge returns on their money, and so therefore a "little" wealth tax wouldn't hurt.

Well guess what, not all rich people want to take big risks with their money and are earning those level of returns.

Wouldn't a normal capital gains tax be more equitable in this situation?
I can't see any excuse for a wealth tax, following your logic.

 

How much of her and her family's wealth is Pocahontas contributing to the glorious taxation cause? Has she set a limit to her own taxable wealth?

 

Capitol gains plus an estate tax system without so many bypasses would achieve the same goal I suppose if the issue were fairness, or doing away with special lower rates for cap gains. In reality, Senator Warren just wants to spend a lot of money and "wealth taxes" are a means to that end. That alone would be fine except wealth taxes inevitably destroy wealth so they would be more akin to a payday loan taken out by the government.

 

Rich people who have their money in blue chip stocks don't consider they're taking anything like a 'big' risk. And guess what, they will have their eggs in more than one basket. And by the way, it's o.k. if we have different opinions.

 

That's a tax on income not wealth. Wealth taxes have been tried in other countries and they do not work, too hard to enforce and never produce the claimed revenues. And at what point do you tax the persons wealth and who is going to do a complete assessment of their wealth every year?

And BTW would require a constitutional amendment just like the income tax did.

 

The OP is about taxing wealth, not income.

 

"and so far in his best month he made 10% on his money. "

The "made" is income, capital gains which is taxed. Tax on wealth is a different matter.

Wealth taxes have been tried in other countries and they do not work, too hard to enforce and never produce the claimed revenues. And at what point do you tax the persons wealth and who is going to do a complete assessment of their wealth every year?

 

Sounds like property taxes.

Various government districts already tax the value of personal property every year... and not just real estate property... some government districts also tax vehicles, equipment, inventory, etc... even personal jewelry and furniture!!

.

 

I see. So your argument is we already have property taxes, so that has set a precedent for a total wealth tax.

It's interesting how things ratchet up over the years, each new idea that is implemented going on to set the precedent for something else, which goes even further.

 

Real estate is different in that unlike other forms of wealth, it can't move, and it can't hide. Land is different in that its supply is completely unaffected by taxation.

 

On the contrary, I am against any kind of personal property tax.

.

 

Read the thread's comments in sequence and you'll have a better idea of how the conversation went.

 

I have........your point?

 

And do you know how much that gets tied up in courts contesting appraised values? And those values change on a daily basis. AND any direct tax on the people by the federal government must by assessed equal across the entire country. Property taxes on real property are assessed differently across the country. And that is the EASY property to assess the value. Get into personal property and a whole nother ballgame. Very wealth people die and their estates have to be assessed for tax purposes and it can take years and the courts to come to a final determination.
As I said it's been tried in other countries and as I cited if not here but in other threads like out of 11 European countries which tried on 2 still have one and those are very limited.

 

And can be easily compared to similar property in the area and all sales are publicly recorded and even there when new appraisals come out people are running to court contesting the appraised values. Try to sell your house and you will have an appraisal, the buyer will have an apprasial and the mortgage company will have an appraiser all with different numbers.

 

Because they want to take, but not pay for what they are taking.

I was in a similar position a couple of years ago; the appraisals were all within 5% of the final selling price, which is a pretty standard margin of error in the appraisal profession except when the market is shifting rapidly and comparable sales get out of date too fast. Close enough.

 

Sorry it went over your head. The OP referred to a proposed wealth tax on people with an excess of 50M dollars and used some figures supposing banks only paid 2% interest what the outcome would be. My post #6 suggests that no one with a net value in excess of 50M relies on bank interest to maintain and improve their wealth.

 

And you mentioned the guy made 10% in one month which of course would already be taxed as income, capital gains, at about 24%. Then a wealth tax would tax the remaining 76%.

Just noting that sorry it went over your head.

 

5% can be a lot money and send people to court. And that is the easily assessable property.