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Treasured Social Butterfly
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Re: The Role and Design of Net Wealth Taxes in the OECD

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@GailL1 wrote:What if the wealth is not in money ?  

Sure you can tax all of their income but then it is once and done -

A Wealth tax would be perpetual - unless they go broke.

 

Capital gains taxes aren't applicable until money is made from the sell of an asset.  What if they never sell it?  

 

Not that I am wealthy but I have a certain stock that has been passed down to me from a long list of my family - one generation to the next.  Sure, I have to pay taxes on any earnings - dividends - but that is small in comparison to the actual worth of the stock.

 

When it is passed along from one person to another, the value of the asset is just reassigned a higher value.  Unless one sells some or all of it, no tax is ever due.  Same thing for things like real estate or collectibles.  

 

Think of of all that "wealth" out there to tax .


The only sort of "wealth tax"that I  know of are property taxes. Is there some huge drive to tax wealth that I have yet to hear of? 

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Valued Social Butterfly
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Re: The Role and Design of Net Wealth Taxes in the OECD

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@Richva wrote:

. . . .I would say that a graduated wealth tax (I would also prefer income tax  to a wealth tax but that is a different discussion) is highly appropriate as the more money one has or earns, the more disposable income one has. 

 

Having said that, it is VERY appropriate to fund investments in our culture such as tuition subsidies for advance education, child care, elder care, health care, and so on.  To fund these endeavors, you go where the money is.  That would be the top X%. 


What if the wealth is not in money ?  

Sure you can tax all of their income but then it is once and done -

A Wealth tax would be perpetual - unless they go broke.

 

Capital gains taxes aren't applicable until money is made from the sell of an asset.  What if they never sell it?  

 

Not that I am wealthy but I have a certain stock that has been passed down to me from a long list of my family - one generation to the next.  Sure, I have to pay taxes on any earnings - dividends - but that is small in comparison to the actual worth of the stock.

 

When it is passed along from one person to another, the value of the asset is just reassigned a higher value.  Unless one sells some or all of it, no tax is ever due.  Same thing for things like real estate or collectibles.  

 

Think of of all that "wealth" out there to tax .

* * * * It's Always Something . . . Roseanne Roseannadanna
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Valued Social Butterfly
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Re: The Role and Design of Net Wealth Taxes in the OECD

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I'll take Billionaire Warren Buffett's word on the Wealthy not paying their fair share of Taxes , especially when he felt ashamed that he pays less tax than his secretary.

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Re: The Role and Design of Net Wealth Taxes in the OECD

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Speaking as an affirmed liberal, I would say a tax simply designed to move money from the top X% to the bottom XX% is pointless. I would say that a graduated wealth tax (I would also prefer income tax  to a wealth tax but that is a different discussion) is highly appropriate as the more money one has or earns, the more disposable income one has. 

 

Having said that, it is VERY appropriate to fund investments in our culture such as tuition subsidies for advance education, child care, elder care, health care, and so on.  To fund these endeavors, you go where the money is.  That would be the top X%. 

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The Role and Design of Net Wealth Taxes in the OECD

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I thought some of you might enjoy looking at this OECD Report.

This is the link to the (4) page summary.

OECD Tax Policy Studies - The Role andDesign ofNet Wealth Taxes in the OECD - Executive Summary

 

Just a bit from the Summary:

 

Net wealth taxes are far less widespread than they used to be in the OECD but there has recently been a renewed interest in wealth taxation. While 12 countries had net wealth taxes in 1990, there were only four OECD countries that still levied recurrent taxes on individuals’ net wealth in 2017. Decisions to repeal net wealth taxes have often been justified by efficiency and administrative concerns and by the observation that net wealth taxes have frequently failed to meet their redistributive goals. The revenues collected from net wealth taxes have also, with a few exceptions, been very low. More recently, however, some countries have shown a renewed interest in net wealth taxes as a way to raise revenues and address wealth inequality.

 

This report seeks to answer four main questions:

  • Is there a rationale for addressing wealth inequality through the tax system?
  • If so, is a net wealth tax the most appropriate instrument to address wealth inequality?
  • What have been the practical experiences of countries that currently have or previously had a net wealth tax?
  • Where a country has decided to implement a net wealth tax, how should it be designed to maximize efficiency and equity and minimise tax administration and compliance costs?

The report argues that there is a strong case for addressing wealth inequality through the tax system. Wealth inequality is far greater than income inequality, and there is some evidence suggesting that wealth inequality has increased in recent decades. In addition, wealth accumulation operates in a self-reinforcing way and is likely to increase in the absence of taxation. High earners are able to save more, meaning that they are able to invest more and ultimately accumulate more wealth. Moreover, investment returns tend to increase with wealth, largely because wealthy taxpayers are in a better position to invest in riskier assets and generally have higher levels of financial education, expertise and access to professional investment advice.

 

While the tax system should help address wealth inequality, the question is whether a wealth tax is the most effective way to do so. The report assesses the case for and against net wealth taxes, looking at efficiency, equity and administrative arguments. It also compares the effects of net wealth taxes with personal capital income taxes and taxes on wealth transfers.

* * * * It's Always Something . . . Roseanne Roseannadanna
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