HFWR
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Don't tax you, don't tax me, tax that man behind the tree...
I think the gov't would love to tax wealth, but it would be tougher to administer than income tax. The value of some investments, ie real estate, private businesses, etc are subjective, and the gov't would spend a lot of $ trying to figure out everyone's worth. My guess is that they'll just increase income tax rates when they want more money.
Purely as a matter for discussion, what would you think of using wealth (net worth) as a basis for taxation, rather than income?
ERD50 said...
I'll pay $2000 for gasoline... How much will you be spending?
ERD50 said...
Hmmmm...
So if I earn $50K and you earn $1Million:
I'll be paying 6% of my pay for food... $3K Will you pay 6% or $60K?
I'll pay $2000 for gasoline... How much will you be spending?
Well, what would Jamie do with his earnings? If he spent it on consumable "stuff", then it would be taxed. If he chose to put it back to work in the economy (stocks, bonds, savings accounts) then it wouldn't be taxed--and would presumably be helping us all. It just requires a new mindset--it doesn't matter what you earn, it's what you spend that gets taxed.So if I spend 70% of my salary on taxable items, will Jamie Dimon do the same?
Hmmmm...ERD50 said... [quotes got a little jumbled here - but this was in response to me talking about a Federal Sales Tax - taxing actual spending]
So if I earn $50K and you earn $1Million:
I'll be paying 6% of my pay for food... $3K Will you pay 6% or $60K?
I'll pay $2000 for gasoline... How much will you be spending?
My Internet and phone cost $2K or 4%... Will you be paying $40K
If my car costs $20K, will you be paying $400,000?
For a while, I had a neighbor who was earning a rather high base salary... over $600K... His spending was more than mine, but nowhere near THAT much more...
So if I spend 70% of my salary on taxable items, will Jamie Dimon do the same?
Or maybe I'm missing something... A change to Sales tax seems to be a favorite option for many members of congress.
Well, not really. All of my neighbors with similar sized homes pay 1/3-1/2 what I do in property tax. The reason is that property tax here is assessed at the time of purchase or building completion. We built. All in, we spent about $850k to buy the land and build. When completed it was assessed at a cool million. It keeps going up with CPI. When original builders and homeowners in the neighborhood started leaving due to short sales and foreclosures, homes started selling for $325k-425k. Values are back up to maybe $600-650k now, but I'm still paying twice as much as most of the neighborhood. That's fine when my home is REALLY that much more valuable, but when it is arbitrary and automatic based on original price instead of current value, that is a problem. I'd challenge mine, but word is that there are very few successful challenges around here. I don't mind paying my fair share, but we do need a better system of figuring out "fair".
R
In my own case, it would hurt, as because of our financial structure, we have not had to pay income tax for the past 24 years..
What about the state income tax? I realize how it can be structured to not pay FEDERAL income tax but doesn't Illinois just have a 5% tax of income no matter if dividend, interest, etc...
By the same token, if Warren Buffet bequeathed his fortune to every member of his extended family, two generations hence, not one single person would ever have to work, contribute to society in any way, or... ever pay income taxes.