Paul Graham wrote an article about wealth taxes. He tweeted about that article. And then the hordes descended on him. So naturally this had the intended Streisand effect, and I read the article. In it he assessed the impact a wealth tax would have on a (hypothetical yet all too real) startup founder. In his words:
1. Wealth-tax being ameliorated by growth will in principle make it negligible. Except for the one case when someone is down on his luck and losing money, i.e. the only case in which one really wants financial security, so it removes the very important "feeling" that people have about making money of "once I have this I will be secure" (of course, that feeling is fake, but many people get into the rat race for just that security high)
2. Wealth tax as a mechanism, to my naive understanding of economics, already exists via inflation and dividends/CGT. Since any significant amount of wealth is likely producing more wealth, quite a lot probably, 2-4-8-20-200% a year, taxes somewhere between 10 and 40%, that's a lot more than a wealth tax.
I think those 2 points alone are enough to argue against a wealth tax, but
3. Living and paying taxes in the US seems like a status symbol to me or a socio-cultural decision. It gets you a weak passport, a beyond 3rd world probability of being drafted, insanely high taxes with criminal charges for getting them wrong, no public services besides some roads (tbh, the roads are nice) ... oh, a government that hounds you for money even if you leave unless you wait 1 year and pay an administrative fee and potentially a divorce tax, then it will leave you alone (maybe).
On the other hand Andora, Malta, Romania, Montenegro, Bulgaira, Georiga and various Swiss Cantons are winking at you and offering:
* Taxes between 0-25% depending on profession and income levels
* De-facto (and in some cases de jure, arugably) it's no a crime (you can be fined, but not imprisoned or killed) to mess up your taxes
* Double taxation treaties with basically all countries imaginable (except the US)
(Some `*` don't apply to 1 or 2 places, e.g. low tax Swiss cantons and Lichtenstein are expensive in terms of housing)
I've tried to convince people making low 6 figures in the US (in remote-friendly jobs) to renounce its cruel taxes and come live in <the rest of the world> like literal kings, yet for some reason they prefer allocating 140k as: 70k tax, 20k insurances, 30k tiny metal cage in skyscraper, 20k takeout.
And I've failed to convince a-single-person. So I for one have come to disagree with the idea that people take any rational actions in regards to their tax environment, I'm sure you can make or break a society with taxes, but I think the process is much more subtle and I doubt anyone understands it.
Few notes:
1. Wealth-tax being ameliorated by growth will in principle make it negligible. Except for the one case when someone is down on his luck and losing money, i.e. the only case in which one really wants financial security, so it removes the very important "feeling" that people have about making money of "once I have this I will be secure" (of course, that feeling is fake, but many people get into the rat race for just that security high)
2. Wealth tax as a mechanism, to my naive understanding of economics, already exists via inflation and dividends/CGT. Since any significant amount of wealth is likely producing more wealth, quite a lot probably, 2-4-8-20-200% a year, taxes somewhere between 10 and 40%, that's a lot more than a wealth tax.
I think those 2 points alone are enough to argue against a wealth tax, but
3. Living and paying taxes in the US seems like a status symbol to me or a socio-cultural decision. It gets you a weak passport, a beyond 3rd world probability of being drafted, insanely high taxes with criminal charges for getting them wrong, no public services besides some roads (tbh, the roads are nice) ... oh, a government that hounds you for money even if you leave unless you wait 1 year and pay an administrative fee and potentially a divorce tax, then it will leave you alone (maybe).
On the other hand Andora, Malta, Romania, Montenegro, Bulgaira, Georiga and various Swiss Cantons are winking at you and offering:
* Taxes between 0-25% depending on profession and income levels
* Socialized everything (healthcare, pension, dentistry)
* Cheap (relative to US cities) housing
* Very strong passports
* De-facto (and in some cases de jure, arugably) it's no a crime (you can be fined, but not imprisoned or killed) to mess up your taxes
* Double taxation treaties with basically all countries imaginable (except the US)
(Some `*` don't apply to 1 or 2 places, e.g. low tax Swiss cantons and Lichtenstein are expensive in terms of housing)
I've tried to convince people making low 6 figures in the US (in remote-friendly jobs) to renounce its cruel taxes and come live in <the rest of the world> like literal kings, yet for some reason they prefer allocating 140k as: 70k tax, 20k insurances, 30k tiny metal cage in skyscraper, 20k takeout.
And I've failed to convince a-single-person. So I for one have come to disagree with the idea that people take any rational actions in regards to their tax environment, I'm sure you can make or break a society with taxes, but I think the process is much more subtle and I doubt anyone understands it.