Actually, it is not. The derivative of wealth includes unrealised capital gains which are not part of income for current US tax purposes. These are not taxed in the US or any other reasonable country for a number of reasons, including that they are too easy to manipulate. The same applies to wealth.
This is a reasonable point and perhaps the strongest point against the wealth tax. However, the derivative of wealth is also quite easy to manipulate. That's why we see people like Trump not paying any taxes for years.
The increment of wealth is not taxed currently so it does not matter if it is easy to manipulate or not.
Manipulating realised gains is quite a bit harder than unrealised because it at least requires some transactions and cash flows.
Manipulating consumption spending is harder still and this is why countries that are collecting much higher shares of GDP as taxes have VAT.
Another argument against wealth taxes which is not mentioned there is that unlike realised gains it often hits people with illiquid assets so hard that the situation becomes untenable without extensive exceptions.
It is not obvious that people with modern high wealth, which is often abroad/offshore/crypto/non-tangible really benefit that much from state protection.
I think they do. If you have, say, a stake in a public company, you benefit from the various regulations and disclosure rules that essentially make your money harder to take away. And certainly countries with stronger legal systems are preferable for keeping your money.
Disclosure rules have absolutely nothing do to with how easy it is to take wealth away. In most large public corporation the actual assets are usually hidden away in layers of subsidiaries. These subsidiaries are privately held, so even if public ownership of a corporation would somehow magically protect the ownership rights, this protection would not have worked for most companies.
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timeasmymeasure
no subject
Date: 2019-10-11 05:23 pm (UTC)no subject
Date: 2019-10-11 05:25 pm (UTC)no subject
Date: 2019-10-11 05:39 pm (UTC)Manipulating realised gains is quite a bit harder than unrealised because it at least requires some transactions and cash flows.
Manipulating consumption spending is harder still and this is why countries that are collecting much higher shares of GDP as taxes have VAT.
Another argument against wealth taxes which is not mentioned there is that unlike realised gains it often hits people with illiquid assets so hard that the situation becomes untenable without extensive exceptions.
no subject
Date: 2019-10-11 11:17 pm (UTC)Fair point. Still, it is entirely possible to manipulate cash flows.
VAT is easy to implement but it is a highly regressive tax.
On the other hand, people with high wealth benefit more from the state protecting their property and hence should pay more for that service.
no subject
Date: 2019-10-12 08:52 pm (UTC)no subject
Date: 2019-10-13 05:29 pm (UTC)no subject
Date: 2019-10-14 07:57 am (UTC)no subject
Date: 2019-10-14 08:01 pm (UTC)