Source
r/reddit.com•
pathjumper

I hereby propose a progressive net-worth tax for the United States. That should pretty much fix the system. Taxing the top 2% extremely heavily, while leaving pretty much everyone else pretty much alone.

Seeing as how my net worth is currently negative, due entirely to student loan debt, this would work out fantastically for me.

Seeing as how the "the top 2%" own pretty much everything, they should foot the bill. We'll see how much military spending they want when they actually have to pay for it themselves.

Posted May 2, 2011, 4:25 PM UTC

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[deleted]•

Sounds like a great way of encouraging people to go into massive debt so they get "free" money from people who are actually being productive members of society.

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pathjumperOP•

This is just one face of a multifaceted solution.

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brock_lee•

Please explain how taxing net worth would work, rather than taxing income in the year it was generated.

If my net worth, for instance, is $1 million, and the net worth tax were 10%, I would owe $100,000 in tax that first year. If I had decided to retire on that $1 million, after paying that tax, it leaves me with a net worth of $900,000. So, the next year, I have to pay $90,000 in net worth tax, despite not having earned any money since I am retired.

It will take me some 18 years until I am flat broke, under this scheme.

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tedjp•

It seems the tax rate would be far lower, less than 1%.

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pathjumperOP•

Another reply:

I created this submission in r/math to summon some wizards who would be better able to answer the detail side of your question. Hopefully a few bright persons will be sufficiently interested to respond there or here.

edit: I accidentally several words.

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pathjumperOP•

Please explain how taxing net worth would work, rather than taxing income in the year it was generated.

You assess someone's net worth. Then you tax based on that figure.

Let some accountants figure out the net worth, and some economists figure out how to tax them.

It will take me some 18 years until I am flat broke, under this scheme.

If you divide something by a percentage, it never reaches zero. Also keep in mind, in the current system, $1M is chump change to those at the top. The progressive scheme can (and should) be organized such that the bottom, say half, pay almost nothing, those below the poverty line pay nothing.

Keep in mind I'm more interested in taxing the hyper-wealthy than the "rich". A million dollars is chump change. Some hedge fund managers make billions per year. The system will need frequent adjustment to make sure it doesn't screw people out of hard earned money, or push them into poverty. The closer you get to poverty the lighter the burden should be. Also, we would need to watch for people building palaces so as to avoid taxes by sinking trillions or billions into a single home which would need to be excluded.

We would need ferocious asset wolves like this guy, say paid via bounties derived from those assets, to find huge asset pockets people try to use to avoid being fairly taxed like everyone else. They would intrinsically be most interested in the wealthiest first, and wage slaves like myself, not at all. I wouldn't be worth their time, you probably wouldn't either.

Even Albert Einstein was flabbergasted at the income tax:

The hardest thing in the world to understand is the income tax.

He knew it was bunk. Why do we still have it? Oh wait, that top 2% gets off easy under such a system.

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brock_lee•

Yes, I know math.

I actually did the math, rather than guesstimating, and after 22 years, I have lost 90% of my net worth. Let's put it that way rather than "flat broke."

And, I realize you think $1,000,000 is chump change, but you'd need to explain how (assuming a 10% tax), you think it's acceptable to take 90% of someone's worth over 22 years.

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pathjumperOP•

And, I realize you think $1,000,000 is chump change, but you'd need to explain how (assuming a 10% tax), you think it's acceptable to take 90% of someone's worth over 22 years.

Who said I wanted to? You are assuming things I have neither stated, nor implied.

I want a taxation system that provides the maximum quality of life for the maximum number of citizens and prohibits such massive aggregations of wealth (power) that a tiny few can exert such power over a system that they effectively control it.

In other words, a real democracy. Of the people and actually for the people instead of for the top two percent.

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brock_lee•

I'm all for a fair and honest tax. I don't even have a problem with a progressive tax (i.e., I do not support a flat tax).

But, I do not think that taxing personal net work makes any sense.

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runputt•

So...basically restore the system that was in place for nearly 200 years.

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pathjumperOP•

Elaborate for those of us that are ignorant of 300 years of tax code?

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[deleted]•

[deleted]

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