Talk:Wealth tax

From Wikipedia, the free encyclopedia
Jump to: navigation, search
WikiProject Taxation (Rated Start-class, Mid-importance)
WikiProject icon This article is within the scope of WikiProject Taxation, a collaborative effort to improve the coverage of tax-related articles on Wikipedia. If you would like to participate, please visit the project page, where you can join the discussion and see a list of open tasks.
Start-Class article Start  This article has been rated as Start-Class on the project's quality scale.
 Mid  This article has been rated as Mid-importance on the project's importance scale.
 

This article has comments here.

Biased, provincial, unsourced[edit]

The article seems motivated by an attempt to show that the US would benefit from a wealth tax. (Quotations of taxes in other countries merely serve that purpose). As such, it does not provide an enciclopedial account of the topic. Furthermore, as it currently stands the article has 950 words "in favor" and 211 "against", which says something about the NPOV. Finally, there is dramatic lack of primary sources. --Majorbolz (talk) 22:43, 20 December 2012 (UTC)

Untitled[edit]

Why does this get a page? It's not even a thing, there's no such thing as a "wealth" tax, it's just a made up campaign term

This is explained on the first line: Because of the broad term "wealth", property tax, capital transfer taxes (inheritance tax, gift tax), endowment tax and capital gains taxes are sometimes referred to as "wealth taxes".

There is indeed such a thing as a wealth tax. Please see this Grundle2600 19:39, 31 October 2007 (UTC)

Wealth taxes are talked about in economics programs because they are both economically viable and offer some good equity arguments while taking some of the efficiency burden off of income taxes (why work harder if you're in a high marginal tax rate?). They just don't happen to be used very often, nor, I would argue, are they too politically viable as it often tends to be the wealthy who hold legislative powers.NByz (talk) 18:38, 6 September 2008 (UTC)
This is a response to the first sentence: "Why does this get a page? It's not even a thing, there's no such thing as a "wealth" tax, it's just a made up campaign term". In Sweden there existed until January 1, 2007 a wealth tax that perfectly fit the description in the first paragraph of the article ("a levy based on the aggregate value of all household holdings actually accumulated as purchasing power stock (rather than flow), including owner-occupied housing; cash, bank deposits, money funds, and savings in insurance and pension plans; investment in real estate and unincorporated businesses; and corporate stock, financial securities, and personal trusts."). The tax was even named the "wealth tax" ("förmögenhetsskatt" in Swedish). Just to set that straight for anyone who may question the existence of such a thing as a wealth tax. Sarnalios (talk) 16:02, 19 May 2010 (UTC)

The term "wealth tax" is often confused in the media as when the proposed Buffet Rule was ofter described as a wealth tax. In order to avoid confusion believe it is good form to use the phrase "net wealth tax" rather than just "wealth tax". — Preceding unsigned comment added by 248TaxBlend (talkcontribs) 20:22, 31 August 2012 (UTC) The article should be renamed as "Net Wealth Tax". See Renaming articles; If you find an article that you believe is mis-named, please do not copy and paste the contents of the old article into a new article — among other things, it separates the previous contributions from their edit history (which we need to keep track of for copyright reasons). The preferred method is to move the page to the new name, you need to be registered for that. If it is your first move, please read the warnings on the move page carefully, as there are a number of issues to consider before moving a page. If a "disambiguation" page is involved, it is best to review Wikipedia:Disambiguation. 248TaxBlend (talk) 15:07, 1 September 2012 (UTC)

Apparent problem in article[edit]

There's an apparent problem with the math here. Unfortunately I can't read French, so can't verify one of the numbers, but hopefully someone else can.

To quote from the article "Wealth_tax":

"...in no place where this kind of tax is in place does it contribute to more than 0.3% of the total tax intake ([1])."

and

"France. In 2003 out of €786 billion "general government" receipts, €174 billion was collected on "income and wealth". No further breakout is disclosed. Data is from the Institut National de la Statistique et des Etudes Economiques."

€174 billion out of €786 billion is 22% - however "general government receipts" might not (probably does not) mean the same as "total tax intake". A clarification of the two would be useful.

Also, it specifies "Income and Wealth", so (presumably) the bulk of that amount is made up from income tax and not wealth. I can read basic French, but I'm not proficient enough to want to stake figures and information from it in an encylopaedia. :—The preceding unsigned comment was added by 134.7.248.129 (talk) 03:29, 28 February 2007 (UTC).
I know that Wikipedia's not a WP:RS, but Taxation in France says that the ISF (wealth tax) accounts for 2% of government revenue. CRGreathouse (t | c) 17:01, 2 November 2008 (UTC)

Proposed addition[edit]

The Arguments in Favor section is incomplete and seemingly suggests that only one man has ever argued in favor of wealth tax. I propose to expand this section to about 4 paragraphs. I have been studying tax reform for 6 months and feel well-informed on the topic. I am in favor of a wealth tax as part of comprehensive tax reform in the US, but feel I can present arguments in favor in an unbiased manner. In all my reading, I found few well-constructed, comprehensive arguments in favor of a wealth tax, so I put one together on a website I developed to advocate for tax reform http://fairsharetaxes.org. I think I would feel would feel obliged to use the site as a reference (It contains detailed calculations, examples, arguments that would be too long and complex for a Wiki article.) On the other hand, such a self-reference seems like self-promotion of my own ideas or a circular reference. Feedback? Mindful123 (talk) 04:27, 9 April 2010 (UTC)mindful123Mindful123 (talk) 04:27, 9 April 2010 (UTC)

==Proposed alteration== The arguments in favor of the wealth tax are biased and are unfounded. The first line states that it's generally held that taxes should be commensurate with the ability to pay. This paragraph is an editorial not an unbiased article.

==Proposed alteration== The "arguments in favor" section is now quite comprehensive, but the arguments against section is incomplete. I intend to add extensively to the ""arguments against" section, adding several arguments against and extending existing arguments to help balance the article.Mindful123

yeah that needs to be fixed, theres lke nothing in the arguments against section. 128.2.246.16 (talk) 00:27, 28 August 2010 (UTC)

==Proposed alteration== The "arguments in favor" section of the "Wealth Tax" page are first and foremost unfounded, and come across from a biased point of view. The comments in that section are mostly from one single man's own "study" on the wealth tax. For example this person states a claim that is drawn completely out of speculation on an outcome, and then provides a citation leading right to his own website. It is not prudent to make unfounded claims clearly showing your overwhelming support for a "wealth tax", and back up your own claims with a citation that leads to your own website with the identical claims. It is not acceptable by wikipedia standards for you to present biased opinions on the outcome of "what if" questions. Furthermore, you present the biased opinions in disguise of empirical evidence, as clearly shown by the fact that you are basing your comments on your own "calculations" and predictions. You say your website was "developed to advocate for tax reform", and continue to state that you are unbiased. If your website was a deep study on empirical evidence on idea's of a "wealth tax" it would be unbiased, but having a site that presents your own assumptive viewpoints on a "wealth tax" and stating that the site is an advocacy site for such a tax is not unbiased at all. In summary, you present your biased view of what you believe on a government issue, and then back up your own claim with a link to your own site which advocates for a wealth tax. ---


by Eugene Patrick Devany, TaxNetWealth.com 1. I am unable to distinguish "tax fairness" and "ability to pay" and consider them almost interchangeable for the purpose of tax code design. 2. I have added "arguments in favor" and there may be some overlap in the items. 3. There are several sites that advocate use of a net wealth tax in one form or another and an encyclopedia should embrace the diverse potential means and methods. It is not simply being in favor or opposing a net wealth tax. For example I oppose using a net wealth tax on top of a progressive income tax ("soak the rich method") and support a net wealth tax on all when it is used to eliminate payroll taxes, flatten the income tax and eliminate tax loopholes. Of course my personal preference for how a net wealth tax is used is not important; but explaining that there are two (or more) methods of how it might be used is important. — Preceding unsigned comment added by 248TaxBlend (talkcontribs) 20:54, 31 August 2012 (UTC)

Maryland's "Millionaire tax"[edit]

I removed this paragraph because it is not a wealth tax in the sense of this article. Adrianw61 effectively reverted this, without giving an explanation why. This paragraph would be better suited in another article. What do others think? ConorBrady.ie (caint) 08:39, 7 November 2010 (UTC)

==Proposed alteration== I rewrote the paragraph to better fit in line with it's relation to the idea of a "wealth tax". To understand my basis for the paragraph you must understand that the term "wealth tax" is fairly loosely defined. A wealth tax can be any tax that is solely targeted at the highest income earners. In the case of the "millionaire tax", it was solely targeted at the highest income earners. If everyone's tax had been raised, then it would not have been considered a "wealth tax", but since it was an unbalanced tax hike that was only imposed on the highest income earners it can be considered a "wealth tax"; if you are wealthy you are most likely a high income earner, and if you are a high income earner, you are the only one taxed, hence "wealth tax".

Also this is a terribly unbalananced article. There is a plethora of information in the "Arguments in Favor" section, much of which is very biased, and barely any in the "Arguments Against", and many times sections of the "Arguments Against" get deleted by people with narrow minds and narrow viewpoints. —Preceding unsigned comment added by Adrianw61 (talkcontribs) 19:40, 9 November 2010 (UTC)

It may be "loosely defined", but the definition of the opening paragraph states: "a levy based on the aggregate value of all household holdings actually accumulated as purchasing power stock (rather than flow)". If you wish to augment its meaning to include a high marginal income tax, then you will need to alter the lead; this would have to be done after concensus. ConorBrady.ie (caint) 21:35, 9 November 2010 (UTC)

Whoever put this Maryland millionaire's tax section here does not understand what a wealth tax is. The point is _specifically_ to contrast the wealth tax with income taxes like the millionaire's tax, because the wealth tax is essentially a tax on one's aggregate net worth (i.e. "aggregate value") and _not_ a tax on income (i.e. "flow"). I repeat, the wealth tax is _not_ a tax on the flow of income, but a tax laid on the entire aggregate net value of a person. The millionaire's tax is an income tax specifically targeted at high income levels, and not at net worth. It is therefore an income tax and not a wealth tax. I get the feeling from reading this page that people think "wealth tax" is any tax on the "wealthy." This is not true according to the very definition at the top of the page. Now, you may not like the wealth tax or agree that it is good policy, but that's no excuse for misrepresenting what it actually is. Paragraph will be deleted.Artnesten (talk) 17:13, 12 November 2010 (UTC)artnesten

Misleading Arguments In Favor[edit]

In the "Arguments In Favor" section, there is a suggestion that the U.S. should adopt a "wealth tax" similar to the Netherlands 1.2% tax on wealth. It states that the correct way to look at a 1.2% tax on wealth is to "assume" a 4% annual return, which in turn makes the "wealth tax" similar to a 30% tax on investment return(unrealized and realized gains). This is incredibly misleading for two major reasons. One problem is that most people do not have their entire "net worth" in an investment account earning an average 4% annual return, which means that a 1.2% tax on wealth could only be calculated on a case by case basis. For example, if someone lives in a 2 million dollar house(appreciated over time), has 1 million in an retirement investment account , and is currently in retirement, according to the proposal would have a 4% appreciation of assets, which would equate a 40K gain for the investment acct and 80k gain in the value of their property - adding up to a total of 120k (80k of which is very illiquid). The proposed "wealth tax" would tax the "net worth" of 3mil at 1.2%, which is a tax of 36k. The person in the example has a 36k tax liability and 120k in annual returns. The person will have to take almost all of the4% return from their investment account to pay the 36k "wealth tax", leaving them to most likely draw down their principal or sell their house. You could argue that even under this scenario they could get by through retirement under the "wealth tax", but there is an even great key idea missing from this "wealth tax" proposal. When you tax "wealth" at 1.2%, and then claim that it is just like having a 30% tax on a deemed investment return of 4%, you will be very upset to realize that something called "inflation" ruins that claim. If you take the average inflation rate over time of 3% and include it in the calculation of the deemed 4% return, the real rate of return becomes 1%. Now you can not claim that taxing wealth at 1.2% is the same as a 30% tax on 4% investment returns. The reality with inflation is that the 1.2% tax on wealth now translates into a 120% tax on the 4% (1% real rate) investment returns, which I highly doubt you would want to continue to use as the prime support for this "wealth tax". Adrianw61 (talk) 02:27, 28 December 2010 (UTC)

How it's actually done is not as you're painting it. The reference leads to this tidbit:
"Box 3-- Income from savings and investments falls in this box. The rate is 30% and is levied on a deemed fixed yield of 4% of the total net worth. Net worth is the value of the assets, which may be savings deposits, rented property, shares etc., after the deduction of debt, based on the average balance for the year."
The $2m property is not taken into account, and the pension investment liability can be offset against debt. There is also the argument of the fact that this isn't hypothetical; it is actually done in the Netherlands. If it didn't work, as you imply, then the tax would have been repealed. That it has not been repealed shows that at the very worst, it works. ConorBrady.ie (caint) 04:12, 28 December 2010 (UTC)
One of the purposes of a wealth tax is to encourage wealthy people (so-called "job creators") to do more with their wealth than hoard it. This might be seen as better policy than taxing (and thereby penalizing) investment, which is a priori a social good. Also, your argument from inflation doesn't hold water: generally speaking, good investments will track inflation, making a constant return of 4% pretty reasonable. One might further presume that in a meritocracy, someone capable of becoming wealthy in the first place should be capable of managing his or her affairs to achieve a return of at least 4% on his/her net wealth -- this should be directly implied from the premises of how the free market operates. Thus, any already-wealthy person incapable of continuing to achieve good enough returns is probably just not working hard enough. And on the topic of real property: this is simply a matter of personal choice. If you choose to remove your wealth from the economy, this will come at a cost. LeoTrottier (talk) 03:16, 12 September 2011 (UTC)
I have changed the article to indicate that a net wealth tax on all assets is a coercive method of encouraging productive investment. While the healthy investment effects might be less pronounced if imposed on top of a progressive income tax ("soak the rich" method) a net wealth tax works in a manner similar to the Affordable Care Act penalty for not having insurance which the Supreme Court has rule is a tax. If you invest your wealth you will earn sufficient appreciation or income so you will not lose any wealth. 248TaxBlend (talk) 19:51, 1 September 2012 (UTC)

proposal to remove section on the U.S. property tax[edit]

There's a separate article on property taxes, but for some reason the American one in particular is discussed in this article. I would move any relevant information to that article, and include a see-also here. There is a relationship between property and wealth taxes, which should be mentioned, but I don't see why the American one in particular should be merged into this article. --Delirium (talk) 12:20, 11 August 2012 (UTC)

I agree and have added an introduction to the Property Tax section and moved it to the bottom to better organize the article. I think it could be omitted if the introductory paragraph is revised to clarify the distinction. 248TaxBlend (talk) 19:57, 1 September 2012 (UTC)

U.S. Constitution, Article 16, Income Tax[edit]

I have removed the sentence "(However, as a "direct tax," a wealth tax would likely require amending the United States Constitution.)" It is a legal opinion which is not appropriate to this section. More importantly, it represents a common misunderstanding of the 16th Amendment which was not passed to give congress the power to tax income but was passed to permit the taxing of income "without apportment amoung the states". There is no serious legal scolar who questions the power of congress to tax net wealth and only some small discussion about the aportionment issue. As an attorney I am reasonably certain that it may be taxed as part of income (i.e. imputed income) in the same way we tax capital gains today. Since a net wealth tax attaches to assets which may be in foreign lands and which have no connection to any state it is not likely that an apportionment or even a "direct tax" issue would not be applicable. There are many legal articles and papers on the subject but they seem to be beyond the scope of the current article. 248TaxBlend (talk) 01:23, 2 September 2012 (UTC)

You're right, it is a legal opinion and as such is supported by reliable sources.[1][2][3][4] Trying to hide the fact violates WP:NPOV and constitutes WP:SOAPBOX advocacy, which is prohibited. It's completely unfair to readers to try to get their hopes up about something without giving all sides of the story about what implementation would entail. To which articles and papers in support of your opinion do you refer? —Cupco 01:38, 2 September 2012 (UTC)
The following items were reviewed and none were found to support an opinion that a constitutional imparement to a wealth tax was "likely". In some case the full article was not available.
Restricting the Legislative Power to Tax in the United States, The Vol 56, 2006
http://www.jstor.org/discover/10.2307/20454556?uid=3739568&uid=2&uid=4&uid=3739256&sid=21101016396393
POLLOCK v. FARMERS' LOAN & TRUST CO., 157 U.S. 429 (1895)
157 U.S. 429
http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&vol=157&invol=429
1895 Pollock case
http://heinonline.org/HOL/LandingPage?collection=journals&handle=hein.journals/ccum21&div=22&id=&page=
Do we really want a Wealth Tax in America?
http://heinonline.org/HOL/LandingPage?collection=journals&handle=hein.journals/umialr32&div=11&id=&page= — Preceding unsigned comment added by 248TaxBlend (talkcontribs) 03:57, 2 September 2012 (UTC)
A wealth tax is the very definition of a direct tax in the U.S. constitutional sense of a tax on property "by reason of its ownership", and those articles and the case say as much. Direct tax#U.S. constitutional law sense also cites Fernandez v. Wiener, 326 U.S. 340, 66 S. Ct. 178, 45-2 U.S. Tax Cas. (CCH) ¶10,239 (1945) for the same point. If I'm mistaken, which passages should I be looking at? You said you had sources to the contrary? —Cupco 04:08, 2 September 2012 (UTC)

I have added two quotes and references to (Shakow, David and Shuldiner, Reed, “Symposium on Wealth Taxes Part II, New York University School of Law Tax Law Review, 53 Tax L. Rev. 499, Summer, 2000) and note that the article does not even mention a constitutional issue because they see consumption and wealth taxes as part of the definition of income. Indeed a wealth tax is a tax on imputed income or "a tax on potential income from capital" and the 16th Amendment has such a broad definition of income that a wealth tax would simply be considered as a measure of income and considered as much a part of the income tax structure as the Affordable Health Care Act penalty for not purchasing health insurance. Today the federal government directly taxes gasoline, tanning rentals and artificial body parts. None of these taxes would fall into the antiquated "direct tax" category so as to require an apportionment. It is also important to keep in mind that a net wealth tax is not a tax on an item but rather a tax on the sum of estimated cash values less debt. 248TaxBlend (talk) 06:10, 2 September 2012 (UTC)

As much as I profoundly hope you're right, we need something stronger than a paper which doesn't consider the issue to disregard the case law and law review articles which address the point directly and say it needs a constitutional amendment to work. —Cupco 06:31, 2 September 2012 (UTC)

!! See also http://www.utexas.edu/law/faculty/calvinjohnson/ConstitutionalAbsurdity.pdf

Johnson, Calvin H., “Fixing the Constitutional Absurdity of the Apportionment of Direct Tax”, 21 Constitutional Commentary 295 (2004)

PAGE 296 The Sixteenth Amendment to the Constitution now allows a federal income tax without apportionment among the states. Apportionment, however, threatens to make a tax unconstitutional if Congress strays beyond some narrow and silly definition of “income.” Basing federal income tax on “unrealized” changes in fair market value, for instance, is probably the only way to solve some very knotty problems in tax policy and to minimize the damage that taxation does to the economy. It is argued, however, that a tax on unrealized amounts is not constitutional because unrealized amounts are not income under the Sixteenth Amendment and because tax on unrealized amounts is a direct tax that fails because it cannot be apportioned.

PAGE 316 Similarly the stamp tax on legal documents was a “direct tax” before the Constitution, but ceased to be a “direct tax” once it was clear that it could not be apportioned. … In the congressional debate in 1794 over a proposed federal tax on carriages, Theodore Sedgewick of Massachusetts said that any tax that could not be apportioned was not direct.

PAGE 348 Since Pollock should never be followed again, it is time to reverse it in full and to return to the case law following Hylton, which preceded Pollock. Hylton got it right: a tax that cannot reasonably or naturally be apportioned is not a direct tax because apportionment is the defining characteristic of direct tax. Professor Thomas Reed Powell wrote that the public understood the Sixteenth Amendment to be a recall of the Pollock decision and a restoration of what had gone before. 257 Pollock has been beaten back by the Court, by the other two branches of the federal government, and by the states that ratified the Sixteenth Amendment. Apportionment is too stupid a requirement ever to be applied again. 248TaxBlend (talk) 08:14, 2 September 2012 (UTC)

See also President's Advisory Panel for Federal Tax Reform, page 20

Most people think of income strictly in terms of wages. But a comprehensive measure of income also includes anything that allows you to spend more, either now or in the future. Capital gains and losses, dividends, rental income, and royalties all represent income that does not come in the form of wages. Income can also include noncash increases to wealth, such as health care insurance or other fringe benefits provided by an employer. Some components of income are accruals that do not involve any current cash flows. For example, a stock that has risen in value allows its owner to spend more in the future, and so the increase in value every year should be considered income even if the asset has not been sold. In a comprehensive income tax base, the increase in value of all assets, including homes, would be subject to taxation. In the case of housing, homeowners would also have to declare as income the value they receive by living in their houses rather than renting them out – something economists call “imputed rental income.” All expenses incurred in earning income would be subtracted from the base. Most agree that this construct – recognizing income not just as real but as potential – makes the comprehensive income tax base extremely difficult to implement in practice. 248TaxBlend (talk) 19:01, 7 September 2012 (UTC)

Seperate foreign and U.S. Wealth Tax Issues[edit]

At some point I believe it may be best to reorganize the article to seperate U.S. proposels and issues for the use of a net wealth tax and examples of how net wealth taxes have deen used in other countries.248TaxBlend (talk) 01:23, 2 September 2012 (UTC)

Germany/EU[edit]

"This column argues that one-off capital levies – taxes on the rich – is one way of financing debt reduction. This could be an important step towards deleveraging public budgets without severely damaging the economy." -- Bach, S. and Wagner, G. (15 August 2012) "Capital levies for debt redemption" VoxEU.org (the authors are from Germany's Institute for Economic Research, a publicly funded think tank with close ties to German government policymakers.) —Cupco 04:52, 3 September 2012 (UTC)


I have been collecting foreign wealth tax info (hit or miss) at at http://www.taxnetwealth.com/06_world_wealth_taxes.aspx I repeat the suggestion to collect all foreign country info in one section (or perhaps two if you want to track existing net wealth taxes and proposals) and place U.S. suggestions in a different section. See http://www.taxnetwealth.com/06_Wealth_Tax_Pioneers.aspx I have also just submitted an article "2-4-8 Tax Blend" which is 85% complete. 248TaxBlend (talk) 23:54, 3 September 2012 (UTC)

Nick Clegg/UK[edit]

See "Lib Dem conference: Clegg promises to push for wealth tax," 23 September 2012, BBC and "A 20% wealth tax on the mega rich would raise up to £800bn," 25 September 2012, New Statesman. Someone with some insight into the workings of the UK coalition government please say whether this is notable enough to include as a proposal in the article yet. —Cupco 02:35, 26 September 2012 (UTC)

I'd say, definitely no. It's not a seriously worked-out proposal, just an idea being floated. Ghmyrtle (talk) 08:38, 26 September 2012 (UTC)

Platforms[edit]

What is it exactly, about that adam smith issue, that make everyone presume that property is equivalent to wealth? It isn´t, it´s equivalent to a platform level, incremental platform levels. You use the wrong terminology in an attempt to deviate attention from a con that is millenea old. Attempt to coin a word in relation to a biological immune systeem to become capacitated in understanding what a platform is, and what savings & infrastructure are, a sumzero onto the platform level itself. — Preceding unsigned comment added by 201.209.217.235 (talk) 13:32, 13 February 2013 (UTC)

Globalisation[edit]

I'm not sure what criticism applies most to the Globalisation section, but the list is long. For starters, it's an opinion. Secondly, it is not sourced. Thirdly, it uses weasel words to hide this: "Globalisation suggests". Globalisation is not a person or a group of persons. Fourthly, it is speculative: "A globalised wealth tax would be collected ". Fifthly, it hints of WP:OR: "A global standard rate of wealth tax would solve the problem of capital flight." Can this section be salvaged ? — Preceding unsigned comment added by 195.64.89.205 (talk) 14:12, 21 July 2013 (UTC)

I have removed the "Globalization" section. It consisted of entirely uncited, a priori arguments and speculation. "would", "might", etc. Colonycat (talk) — Preceding undated comment added 15:27, 15 April 2014 (UTC)