What if US taxes were based on wealth, not income?

[imported_Lothar]

Originally posted by: Chiropteran

Originally posted by: MotionMan
Does you plan include getting rid of current asset taxes, like property tax?

MotionMan

Those are not federal taxes. How could a federal tax replace county taxes? I'm simply suggesting a change for the income tax, not touching anything else.

So If my wealth of $5 million included a $4.9 million McMansion, I'll only owe taxes on $100,000 of assets?
I can ignore your tax by just buying houses, selling, and buying more houses then.
I would owe only state taxes, but that pales in comparison to federal.

 

[MotionMan]

Originally posted by: Chiropteran

Originally posted by: MotionMan

Originally posted by: Chiropteran
I was thinking that if taxes were based on assets rather than income, people would be encouraged to spend or invest money rather than just sit on it.

Why would someone be encouraged to invest in the U.S. if a successful domestic investment would actually result in more taxes?

Good question, you should ask all the US corporations why they do so, when successful investments lead to more income tax. This seems to be in favor of asset taxes.

Originally posted by: MotionMan
As stated a 100 times previously in this thread, money would leave the U.S. so fast it would make your head spin.

Again, I ask why? If the tax paid is the same overall, wouldn't the number of companies leaving because of the "asset tax" balance out perfectly with the number of companies that come to the country to enjoy 0 income tax?

I mean it's like you are looking at the asset tax suggestion in a vacuum. Well yeah, a new tax will have negative effects, that is true of any tax. If it wasn't, the government could just levi a 100% tax and be done with it. The question is, are the negative effects of an asset tax worse than the negative effects of an income tax.

I haven't seen *anyone* address this directly.

Originally posted by: MotionMan
Also, how would your tax ensure that the Federal Government got enough money each year? If we started your plan today and the stock market crashed or the housing market crashed, wouldn't there be a lot less wealth and thus, less for the Govt. to obtain in taxes? how do you make up the shortfall?

As above, simple algebra can get you any desired income based on a known quantity of total assets and a variable tax rate.

What happens if the market collapses? What is the point of asking this? What happens if unemployment increase, income tax goes down. A bad market is bad in either case, I don't see why this would be any worse for an asset based tax system than an income based system.

Originally posted by: MotionMan
Does you plan include getting rid of current asset taxes, like property tax?

MotionMan

Those are not federal taxes. How could a federal tax replace county taxes? I'm simply suggesting a change for the income tax, not touching anything else.

The other posters appear to be right, but I will sugar-coat it a little:

You may not be and idiot, but your idea appears to have come from an idiot.

Feh - Time to move on to another thread.

MotionMan

 

[Chiropteran]

Originally posted by: Lothar

Originally posted by: Chiropteran

Originally posted by: MotionMan
Does you plan include getting rid of current asset taxes, like property tax?

MotionMan

Those are not federal taxes. How could a federal tax replace county taxes? I'm simply suggesting a change for the income tax, not touching anything else.

So If my wealth of $5 million included a $4.9 million McMansion, I'll only owe taxes on $100,000 of assets?
I can ignore your tax by just buying houses, selling, and buying more houses then.
I would owe only state taxes, but that pales in comparison to federal.

No, a house is an asset.

 

[imported_Lothar]

Originally posted by: Chiropteran

Originally posted by: Lothar

Originally posted by: Chiropteran

Originally posted by: MotionMan
Does you plan include getting rid of current asset taxes, like property tax?

MotionMan

Those are not federal taxes. How could a federal tax replace county taxes? I'm simply suggesting a change for the income tax, not touching anything else.

So If my wealth of $5 million included a $4.9 million McMansion, I'll only owe taxes on $100,000 of assets?
I can ignore your tax by just buying houses, selling, and buying more houses then.
I would owe only state taxes, but that pales in comparison to federal.

No, a house is an asset.

So we'll be double-taxed twice on our houses by both federal and state?

 

[imported_Lothar]

Originally posted by: Chiropteran

Originally posted by: Lothar

Originally posted by: Chiropteran

Originally posted by: MotionMan
Does you plan include getting rid of current asset taxes, like property tax?

MotionMan

Those are not federal taxes. How could a federal tax replace county taxes? I'm simply suggesting a change for the income tax, not touching anything else.

So If my wealth of $5 million included a $4.9 million McMansion, I'll only owe taxes on $100,000 of assets?
I can ignore your tax by just buying houses, selling, and buying more houses then.
I would owe only state taxes, but that pales in comparison to federal.

No, a house is an asset.

So we'll be double-taxed twice on our houses by both federal and state?

 

[0roo0roo]

Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill) (Hardcover)
http://www.amazon.com/Free-Lun...ernment/dp/1591841917/

Perfectly Legal : The Covert Campaign to Rig Our Tax System to Benefit the Super Rich--and CheatEverybody Else
http://www.amazon.com/Perfectl...erybody/dp/B000CDG8N8/

 

[Chiropteran]

Originally posted by: Lothar
So we'll be double-taxed twice on our houses by both federal and state?

Uh, yeah if you want to look at it that way. Instead of being double taxed by state and federal on your income.

 

[Raduque]

Originally posted by: Chiropteran

Originally posted by: Lothar
So we'll be double-taxed twice on our houses by both federal and state?

Uh, yeah if you want to look at it that way. Instead of being double taxed by state and federal on your income.

Id rather be double-taxed on 100k rather than 5 million every year.

Dumb idea.

 

[cultgag]

Previous years wealth + income - expenses = current year's wealth.


based on your way of calculating, the taxes would keep on stacking on whatever I save every year


ie:

100 + 100 - 50 = 150 (taxed and will be taxed again n++)

very flawed...

 

[Chiropteran]

Originally posted by: Raduque


Id rather be double-taxed on 100k rather than 5 million every year.

Dumb idea.

So you have a $5 million house and you make 100k a year? How did you manage that, did you work for 60 years and save every penny just to buy that house? Come up with a more realistic example and you will see that your preference is stupid.

Like... okay you make 100k, thats more like 75k after taxes. You might be able to afford a $1million house.

Would you rather pay double income tax on 100k or double property tax on $1million?

If you picked double income tax, you are stupid. 25% of 100k is $25,000. 1% of $1,000,000 is $10,000. $10,000 is less tax than $25,000.

 

[Chiropteran]

Originally posted by: cultgag
Previous years wealth + income - expenses = current year's wealth.


based on your way of calculating, the taxes would keep on stacking on whatever I save every year

Thats how inflation works. You are already losing more money every year based on how much you save, plus you also pay a ton of money in income tax.

The current inflation rate is 4%. This hypothetical tax would be 1%, plus you would get to keep all of your current federal income tax. If you are going to argue against it, come up with an argument other than "I don't want to pay more tax" because you would not be paying more tax, not unless you currently pay zero income tax.

 

[waggy]

Originally posted by: Chiropteran

Originally posted by: Raduque


Id rather be double-taxed on 100k rather than 5 million every year.

Dumb idea.

So you have a $5 million house and you make 100k a year? How did you manage that, did you work for 60 years and save every penny just to buy that house? Come up with a more realistic example and you will see that your preference is stupid.

Like... okay you make 100k, thats more like 75k after taxes. You might be able to afford a $1million house.

Would you rather pay double income tax on 100k or double property tax on $1million?

If you picked double income tax, you are stupid. 25% of 100k is $25,000. 1% of $1,000,000 is $10,000. $10,000 is less tax than $25,000.

its very easy for somone who makes 100k a year to own a 5 million doller house.

a person could have purchased it 10 years ago for 300k and it appricated up to because of idiots driving up the cost of property (wich would happen again).

that 100k tax base goes way down with being married and kids. just being married knocks that down to $17000. children will reduce it even more.

Every year it will be around that (dpending on how you do your taxes also) BUT the odds on that house appriacating is great. so your taxes are going ot go up. Also teh person makeing 100k is going to be putting money away (i would hope anyway) so every year the amount of tax is going to go up.

sure for a person living in a apartment makeing $25k a year this is going to help. BUT the majority of people in the long run is going to screw them.

 

[Injury]

I just wish we weren't paying the government for both earning AND spending money.

It's like... Awesome! We worked hard for this money and now you get to take a cut for doing absolutely nothing and waste it on bullshit!

 

[cultgag]

Originally posted by: Chiropteran

Originally posted by: cultgag
Previous years wealth + income - expenses = current year's wealth.


based on your way of calculating, the taxes would keep on stacking on whatever I save every year

Thats how inflation works. You are already losing more money every year based on how much you save, plus you also pay a ton of money in income tax.

The current inflation rate is 4%. This hypothetical tax would be 1%, plus you would get to keep all of your current federal income tax. If you are going to argue against it, come up with an argument other than "I don't want to pay more tax" because you would not be paying more tax, not unless you currently pay zero income tax.

You're assuming that people saving their wealth is the cause of US inflation? That's a pretty big assumption if you ask me.

Otherwise, we'd get taxed your way and also have to suffer for inflation on top of that.

 

[Raduque]

Originally posted by: Chiropteran

Originally posted by: Raduque


Id rather be double-taxed on 100k rather than 5 million every year.

Dumb idea.

So you have a $5 million house and you make 100k a year? How did you manage that, did you work for 60 years and save every penny just to buy that house? Come up with a more realistic example and you will see that your preference is stupid.

Like... okay you make 100k, thats more like 75k after taxes. You might be able to afford a $1million house.

Would you rather pay double income tax on 100k or double property tax on $1million?

If you picked double income tax, you are stupid. 25% of 100k is $25,000. 1% of $1,000,000 is $10,000. $10,000 is less tax than $25,000.

You're incorrectly assuming the asset tax rate will be 1%. I don't think that if your plan came into being, it would be such a small percentage. It would probably be closer to 15% or 20%. Try and see if your great idea still works at those rates.

 

[Xavier434]

This is such a terrible idea. There is no way we would be able to implement this system in such a way where the records of one's wealth will be accurate. It takes far too much detailed auditing that we will not be able to enforce properly. When have we ever enforced such a strict auditing system that worked? As it stands with our current system which requires less auditing, we still have policies and procedures put into place which greatly reduce the amount of auditing that is necessary in order to result in an adequate margin of error. Not to mention that there will be many more loopholes to take advantage of the system than there are currently.

I can see how it could work in theory, but it's way too fragile.

 

[waggy]

Originally posted by: Raduque

Originally posted by: Chiropteran

Originally posted by: Raduque


Id rather be double-taxed on 100k rather than 5 million every year.

Dumb idea.

So you have a $5 million house and you make 100k a year? How did you manage that, did you work for 60 years and save every penny just to buy that house? Come up with a more realistic example and you will see that your preference is stupid.

Like... okay you make 100k, thats more like 75k after taxes. You might be able to afford a $1million house.

Would you rather pay double income tax on 100k or double property tax on $1million?

If you picked double income tax, you are stupid. 25% of 100k is $25,000. 1% of $1,000,000 is $10,000. $10,000 is less tax than $25,000.

You're incorrectly assuming the asset tax rate will be 1%. I don't think that if your plan came into being, it would be such a small percentage. It would probably be closer to 15% or 20%. Try and see if your great idea still works at those rates.

i agree. Even then they would increase what they cover. such as houses,savings, retirement , all assets.

also he really never cleary states what "wealth" is. when people think wealth they think house, savings, assets etc.

Originally posted by: Xavier434
This is such a terrible idea. There is no way we would be able to implement this system in such a way where the records of one's wealth will be accurate. It takes far too much detailed auditing that we will not be able to enforce properly. When have we ever enforced such a strict auditing system that worked? As it stands with our current system which requires less auditing, we still have policies and procedures put into place which greatly reduce the amount of auditing that is necessary in order to result in an adequate margin of error. Not to mention that there will be many more loopholes to take advantage of the system than there are currently.

I can see how it could work in theory, but it's way too fragile.

in theory its great. so is communism. but reality it never works and hurts far more then it helps.

just to many variables to consider (again i think the op is a young kid) that most of us in the real world have ran across.

 

[Chiropteran]

Originally posted by: waggy

its very easy for somone who makes 100k a year to own a 5 million doller house.

a person could have purchased it 10 years ago for 300k and it appricated up to because of idiots driving up the cost of property (wich would happen again).

If your 300k house appreciates to 5 million, you have to pay 15% of that as capital gains tax, or $705k, which is also a lot more than the $10k you would pay from a hypothetical asset tax.

 

[Chiropteran]

Originally posted by: waggy
also he really never cleary states what "wealth" is. when people think wealth they think house, savings, assets etc.

Please, just stop posting if you aren't even going to read what you are responding to. From one of the first posts in the thread:

Originally posted by: Chiropteran
Wealth would be total assets. Cash + investments + (house value+/- appreciation/depreciation) + (car value- depreciation) + (misc items - depreciation). Not new concepts, all are already regular economic numbers accounts have to know.

 

[Chiropteran]

Originally posted by: Raduque
You're incorrectly assuming the asset tax rate will be 1%. I don't think that if your plan came into being, it would be such a small percentage. It would probably be closer to 15% or 20%. Try and see if your great idea still works at those rates.

Please, read the thread. I already showed how I came up with the numbers, 1% is perfectly reasonable. If there was a flaw in my reasoning, tell me what it is, but just saying it can't be 1% because you don't "feel it" isn't a valid argument.

And it's certainly not 15% or 20%, those numbers would result in the government taking far more money than they do.

 

[Chiropteran]

Originally posted by: Xavier434
This is such a terrible idea. There is no way we would be able to implement this system in such a way where the records of one's wealth will be accurate. It takes far too much detailed auditing that we will not be able to enforce properly.

Income tax is such a terrible idea, there is no way to implement such a system in a way where records of one's income will be accurate. It takes far too much detailed auditing that we will not be able to enforce it properly.

Originally posted by: Xavier434
When have we ever enforced such a strict auditing system that worked?

Federal income tax.

Originally posted by: Xavier434

As it stands with our current system which requires less auditing,

No it doesn't. What new auditing would an asset tax require that an income tax doesn't require? Most assets are *already* taxed at the state or county level, so obviously the system can work, it already is working. I don't see any county or state governments collapsing because the records and auditing required to collect car taxes is too much effort.

Originally posted by: Xavier434
we still have policies and procedures put into place which greatly reduce the amount of auditing that is necessary in order to result in an adequate margin of error. Not to mention that there will be many more loopholes to take advantage of the system than there are currently.

Why would there be more loopholes?

 

[ElFenix]

there is no way to properly measure a lot of property for it's value. if it's been a while between since the last purchase of it and it's not readily fungible, determining value with any degree of accuracy is nearly impossible (read: people's houses)

 

[Xavier434]

I am not arguing that the Federal income tax is a great idea. I am arguing that your idea will be worse with more loop holes and will require more auditing in order to do it properly. The idea behind what constitutes as "wealth" is far less defined than what constitutes as "income". Wealth relies far too heavily on projected estimates and it is not something which can be easily translated into hard cash like income and taxes. Wealth can also change at the drop of a hat in ways that are much more difficult to follow and rely upon for tax purposes. I realize income can change quickly too, but it changes in different ways for different reasons which are just easier to work with in terms of taxes. The idea behind what defines wealth is just way too flexible to use as a basis for taxing people. That flexibility will introduce a large assortment of loopholes because most wealth is defined by fake numbers.

 

[JS80]

How much wealth is a $50 gold coin worth?

 

[Modelworks]

How about we tax usage rather than things you might use ?
Meaning it doesn't matter what you make or have, only what public services you use.
Why do I pay for public schools when I have no children attending ?

Why do I have to pay highway taxes for gasoline to put in my push lawn mower ?