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Traden4Alpha
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Re: Wealth tax

June 24th, 2017, 7:23 pm

Of all the taxes mentioned, the wealth tax is the easiest to legally avoid and in ways far funner than avoiding income or property. Just spend every penny you make the minute you make it. A wealth tax is not a tax on a luxury lifestyle, it's a tax on capital accumulation.

Perhaps the government does not want private citizens in control of any capital. It's a logical extension of the poverty policies that deny benefits to those with more than $X in savings which means the optimal financial strategy is to spend those savings down to zero to get to have your government benefit cake and eat it too.

Yes, the left really does want everyone to be poor and dependent.
 
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Cuchulainn
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Re: Wealth tax

June 25th, 2017, 12:15 pm

Yes, I agree with that. The rationale for the tax is critical. If it's for health care for an aging population,  that's one thing. If it's mainly leftist resentment over wealth inequality, it stinks. Then move to California. You'll probably pay more in taxes, but we worship the rich and famous!  :D
"I wish they all could be Californian, I wish .." (Beach Boys).
 
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Cuchulainn
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Re: Wealth tax

June 25th, 2017, 12:19 pm

 A wealth tax is not a tax on a luxury lifestyle, it's a tax on capital accumulation.

It is possible to have a luxury lifestyle without the latter? Time for a Venn diagram.
Last edited by Cuchulainn on June 25th, 2017, 12:59 pm, edited 1 time in total.
 
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Traden4Alpha
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Re: Wealth tax

June 25th, 2017, 12:58 pm

 A wealth tax is not a tax on a luxury lifestyle, it's a tax on capital accumulation.

It is possible to have a luxury lifestyle without the latter? Time for a Venn diagram.
Of course. One can have an arbitrarily luxurious life style whilst maintaining a net worth of exactly zero by ensuring that every penny is spent as it comes in.

Although some aspects of luxury seem associated with high-value assets such as mansions, private jets, yachts, etc., all these can be rented so that the person who is enjoying the lifestyle never owns anything and never pays the wealth tax.

The broader point in a Venn diagram way is that at any given instant, the values on the income statement and the balance sheet can be orthogonal to each other even if they are strongly correlated in empirical data. In the long term, these two have some coupling through integration of net income to form changes in asset levels or differentiation of net asset values to define income (e.g., write-downs of impaired assets).
 
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Cuchulainn
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Re: Wealth tax

June 25th, 2017, 1:06 pm

One can have an arbitrarily luxurious life style whilst maintaining a net worth of exactly zero by ensuring that every penny is spent as it comes in.

Does this work in the long term?
 
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Traden4Alpha
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Re: Wealth tax

June 25th, 2017, 1:43 pm

One can have an arbitrarily luxurious life style whilst maintaining a net worth of exactly zero by ensuring that every penny is spent as it comes in.

Does this work in the long term?
It can as long as one has a suitable "employer" such as a family-run (but not owned!) business. If the employer is willing to pay the aging founder a lavish salary for advice, said founder can have a lavish lifestyle without ever personally owning anything.

Or should all jobs be taxed as assets valued as annuities?
 
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Cuchulainn
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Re: Wealth tax

June 25th, 2017, 2:13 pm

One can have an arbitrarily luxurious life style whilst maintaining a net worth of exactly zero by ensuring that every penny is spent as it comes in.

Does this work in the long term?
It can as long as one has a suitable "employer" such as a family-run (but not owned!) business.  If the employer is willing to pay the aging founder a lavish salary for advice, said founder can have a lavish lifestyle without ever personally owning anything.

Or should all jobs be taxed as assets valued as annuities?
So, it is not feasible in the long terms is what you are saying. Sounds like a free lunch.

Of course, fiat money is the big obstacle in everything. We need to go back to the gold standard because government can control inflation.

Governments can artificial;y drive up property price and then impose property and capital gains tax, especially in highly regulated economies.. A nice little number, what?
Last edited by Cuchulainn on June 25th, 2017, 4:09 pm, edited 1 time in total.
 
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Cuchulainn
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Re: Wealth tax

June 25th, 2017, 2:21 pm

Not entirely sure what you meant with wealth tax, so googled it and apparently NL has it.

https://en.m.wikipedia.org/wiki/Income_ ... etherlands

Pros and cons: not sure, never really looked into it in depth as my net worth is not worth mentioning. But tax rates are high here, in return we get good infrastructure, quite goood health care, and the first 100 days here means how long it takes to form a cabinet.

Probably not helpful at all, sorry :)

Why, are you thinking of Brexit?
Income tax is WYSIWYG but what about WOEKER polis(sen)? Big Ponzi!
 
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Traden4Alpha
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Re: Wealth tax

June 25th, 2017, 11:31 pm

One can have an arbitrarily luxurious life style whilst maintaining a net worth of exactly zero by ensuring that every penny is spent as it comes in.

Does this work in the long term?
It can as long as one has a suitable "employer" such as a family-run (but not owned!) business.  If the employer is willing to pay the aging founder a lavish salary for advice, said founder can have a lavish lifestyle without ever personally owning anything.

Or should all jobs be taxed as assets valued as annuities?
So, it is not feasible in the long terms is what you are saying. Sounds like a free lunch.
It's not a free lunch at all. It's a way for a wealth-oriented person to create a lifetime of income with "owning" any assets.

It's certainly feasible in the long term although it is not at scalable beyond those willing to be entrepreneurs. Other people who earn lots of money in other ways (e.g. a high-paying traditional jobs) will be screwed by a wealth tax. There's no way they can legally convert money earned in one year into money usable for future years (i.e., retirement) without paying the wealth tax during intervening years.
Of course, fiat money is the big obstacle in everything. We need to go back to the gold standard because government can control inflation.

Governments can artificial;y drive up property price and then impose property and capital gains tax, especially in highly regulated economies.. A nice little number, what?
Exactly true! And that's why inflation really is a wealth tax.

Yet a gold standard offers no true inflation protection because governments can ( and do) re-value gold-back currencies.
 
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ppauper
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Re: Wealth tax

June 26th, 2017, 6:07 am

t4a, you're getting there
but rather than having a fractional gold standard wherein  the government pegs pieces of paper as being worth so many ounces of gold, we would use actual gold as money.
 
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Traden4Alpha
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Re: Wealth tax

June 26th, 2017, 12:39 pm

t4a, you're getting there
but rather than having a fractional gold standard wherein  the government pegs pieces of paper as being worth so many ounces of gold, we would use actual gold as money.
Oh, I know that you long for this golden utopia but it's neither feasible (there being insufficient gold to cover the monetary needs of a modern large country) nor stable (the money supply being subject to the whims of foreign gold miners and traders).

But the bigger issue is that it does not even accomplish what you want. Even on a full gold standard, if any kind of lending, debt, or credit is permitted, then the money supply can be inflated by government policy and government debt formation. And even if you mandate full reserve banking, if consumers, the wealthy, corporations, or governments have ways of lending their gold to each other directly or through non-bank entities or for selling loans linked to their stability, then the amount of gold on the economy's books can grow without bound and the value of a unit of said gold can fluctuate.

Moreover, even if a gold standard did eliminate the 2% inflation tax it would effectively impose an additional O(2%) physical handling fee on all transactions and a O(2% per annum) fee for storage. Gold adds friction to the economy which attenuates wealth.
 
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ppauper
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Re: Wealth tax

June 26th, 2017, 1:32 pm

we'll start with inflation being closer to 10% than 2%
Image
shadowstats inflation using 1980 methodology
 
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Paul
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Re: Wealth tax

June 26th, 2017, 5:29 pm

I think you two, t4a and pp, would get on really well if you ever met! (I'm assuming that you haven't.)
 
jaw
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Re: Wealth tax

June 26th, 2017, 5:34 pm

we'll start with inflation being closer to 10% than 2%
Image
shadowstats inflation using 1980 methodology
Isn't shadowstats the site that claims inflation is rampant yet whose subscription fee has been essentially flat for a decade?
Last edited by jaw on June 26th, 2017, 7:14 pm, edited 1 time in total.
 
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Traden4Alpha
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Re: Wealth tax

June 26th, 2017, 6:33 pm

I think you two, t4a and pp, would get on really well if you ever met! (I'm assuming that you haven't.)
LOL! Methinks it would be a baking soda & vinegar moment for sure! Lots of fizz and CO2 causing global warming... err... cooling!