patrick.net

How about an unearned wealth tax? Taxes on unearned wealth do not harm the economy in the slightest.

Land is obviously unearned. No one created it.

Inheritances are not earned by the receiver, duh.

Radio spectrum is not created by anyone.

Ultra-fast trading does not benefit anyone except some non-productive traders

There are probably a lot of other good unearned-wealth objects of taxation too. If we just taxed those things, we also could eliminate all income tax and sales tax and all the paperwork that goes with them. Everyone would be better off, except non-productive rich people.

Productive rich people would be far better off.

Vicente says

You think Sheldon would use his tax savings to give his folk raises? Or would he plow it into a PAC to elect someone even more plutocrat than Romney next time?

Oh come on now, don't be so pessimistic. He might use the money to create new slave-labor jobs in China.

How about an unearned wealth tax? Taxes on unearned wealth do not harm the economy in the slightest.

Land is obviously unearned. No one created it.

Inheritances are not earned by the receiver, duh.

Radio spectrum is not created by anyone.

Ultra-fast trading does not benefit anyone except some non-productive traders

There are probably a lot of other good unearned-wealth objects of taxation too. If we just taxed those things, we also could eliminate all income tax and sales tax and all the paperwork that goes with them. Everyone would be better off, except non-productive rich people.

Productive rich people would be far better off.

I think a land tax and a small HFT trading fee per transaction would be the best candidates. Inheritance was earned at some point.

There are probably a lot of other good unearned-wealth objects of taxation too. If we just taxed those things, we also could eliminate all income tax and sales tax and all the paperwork that goes with them.

Other than land ownership and inheritences, how much other truly "unearned" wealth is out there though? Would it be enough to eliminate the other taxes? I agree with you in principle but I'm not sure it would be enough to eliminate the other taxes completely.

Maybe just raise capital gains taxes and reduce income taxes. But of course the Republican far-right won't let that happen.

bgamall4 says

The reason is, Patrick, that they will say the UK will never allow it and we cannot compete if we allow it.

I don't quite understand the reasoning.

If the ultra-fast traders all want to move to England, good riddance. It's not like they produce anything.

The US will still have stock markets.

freak80 says

Other than land ownership and inheritences, how much other truly "unearned" wealth is out there though? Would it be enough to eliminate the other taxes? I agree with you in principle but I'm not sure it would be enough to eliminate the other taxes completely.

Maybe just raise capital gains taxes and reduce income taxes. But of course the Republican far-right won't let that happen.

Part of the beauty of a tax on unproductive rent-seeking is that all the tax mechanisms are already in place, so all you have to do is try it out by shifting the load a bit and watching the results.

I'm pretty sure land value taxes and inheritance taxes alone could each be enough to eliminate all other taxes. Combined, they would overdo it.

Consider that the vast majority of all wealth in America is inherited and not earned, as proven by Summers and Kotlikoff: http://www.republicansforobama.org/node/9596

Then consider the sum total of rents in the US, especially rents in the large cities where the (roads, water, police, etc) infrastructure is provided by taxpayers, but the benefits from that infrastructure are reaped by private landlords?

I'm pretty confident it would work, and there's no reason not to try.

Consider that the vast majority of all wealth in America is inherited and not earned, as proven by Summers and Kotlikoff: http://www.republicansforobama.org/node/9596

From that article:

In other words, the VAST majority of the wealthy in this country are wealthy because they INHERITED their wealth. The vast majority of the wealthy in America haven't "earned" their "success" by hard work. They've inherited it. That doesn't make them successful. It makes them LUCKY.

I would argue that the vast majority of the ancestors who left the wealth didn't earn that wealth but siphoned it from those who produced it. And that's the real tragedy.

If the ultra-fast traders all want to move to England, good riddance. It's not like they produce anything.

The ability to grow an economy is not dependent on capital as the more capital there is in a system, the proportionally it is worth less. Take all the capital out you want of an economy. Whatever capital remains represents 100% of the production of that economy.

It's not the number of currency units in the economy that makes it productive. It's the allocation of those currency units to production, capital goods, and infrastructure that makes an economy more productive. It's all about allocating a certain percentage of whatever capital there is to building robots rather than pizza.

We could burn 90% of the currency in our system. Eliminate literally 90% of all USA dollars. With the remaining 10%, if we allocated just a third of it to increasing productivity rather than consumer goods or playing zero sum games, we could grow our economy faster than it has grown since its inception.

The biggest drag on our economy is allocating wealth to the casinos of Wall Street and the banks. When wealth is allocated to zero-sum gains, the Second Law of Thermodynamics will cause a net decrease in wealth.

I would love to see a pie chart showing how much of our "net worth" is allocated to various things: stocks, bonds, commercial buildings, apartments, houses, highways, office equipment, farm equipment, food, clothing, etc. I suspect a good percentage of our net worth is attributed to zero-sum gambling and a good percentage of our money is chasing more money in zero-sum games. And it is precisely this allocation of wealth to non-productive and non-consumer uses that puts a drag on the economy and hinders both stability and the rate of improvement in the quality of life.

I'm pretty confident it would work, and there's no reason not to try.

Let's give it a try! But who will take up the cause? Surely not the Republicans. And probably not the Democrats. Obama has a cozy relationship with the ultra-wealthy elites, as reported by Matt Taibbi.

freak80 says

Let's give it a try! But who will take up the cause? Surely not the Republicans. And probably not the Democrats. Obama has a cozy relationship with the ultra-wealthy elites, as reported by Matt Taibbi.

We have to target the people who would come out ahead under a land value tax and inheritance tax.

Fortunately, that's most people! Most people own very little land and inherit pretty much nothing.

But to start with, high-income professionals would probably support the shift to a land value tax because their own income tax rates would be reduced.

Just out of curiosity, are there other nations with a similar tax system?

@Dan8267

>Consider that the vast majority of all wealth in America is inherited and not earned, as proven by Summers and Kotlikoff.

Quiet...don't confuse people with the facts!

@sbourg

>Why don't you fix it in California first? Before hoisting your sem-socialist tactics on the rest of the country? ..."

California's deficit is caused by a mix of "liberal" and "conservative" interests.

conservative interests= the prison industrial complex, "3 strikes and you're out" and all that.

Uh oh here's deepcgi singing the Ron Paul song again...

The disparity between rich and poor growing in magnitude has its basis in fiat currency. Poor people can't leverage their money at 100 to 1 using "supposedly" AAA quality financial instruments. Taxes won't fix it and trickle down doesn't give the little guy any additional leverage.

Both parties are Keynesian. Ron Paul was the only alternative. The most Romney will do is to attempt to make a "cut" in the "increase" in government spending while trying to avoid increasing taxation. The result however will simply be more Keynesian spending, because both Parties believe it's relatively safe as long as the Fed claims it has it all under control.