Why Wealth Taxes are Evil, and Counterproductive

With various states trying to tax wealth, I’ve decided to take this head on and show why it’s not at all a healthy exercise, and will hurt the wrong people.

  1. Determining wealth is totally arbitrary. Here’s an example in my own life.

On Black Friday of 2023, I purchased this surround system. I paid like $1,000 for it brand new on Ebay (manufacturer runs an ebay site).

Let’s say you want to tax my sound bar, because you say it’s a luxury I don’t really need (and the poor need the money more than I do). What value will you attach to it? The $1000 I actually paid for it, or the $1900 suggested retail? Or the $1,600 it’s currently selling for on Best Buy?

Stocks and bonds valuating works very similarly in the fact it’s fluctuating all the time. What value do you assign to that? The 52-week high? The price they bought it for via the stock option? The 10-year low? Which value do you assign it?

Anyone want the job of assigning such?

  1. It hurts the lower classes more than the rich. This should be a no brainer. Let’s use Elon Musk as an example. For the sake of argument, let’s assign his ‘wealth’ at $200 billion.

At a 1% ‘wealth tax’ his tax would be $2 billion. He doesn’t make nearly that much in a given year, so he’s going to have to dump some Tesla stock. In fact, he’s going to have to dump a LOT of Tesla stock to pay this tax.

What do you think that kind of stock dump is going to do to the value of Tesla stock? And that is not just one year, that is every year you asses this tax.

Don’t think that will affect you? Do you own an IRA or 401k? Are you dependent on some kind of public pension fund, or a union pension fund?

It affects ANYONE who owns Tesla stock.

And that is just one person. Multiply that by every millionaire or billionaire living in your state. Even the ones over a certain threshold. That’s a lot of stock dumping, and it’s going to hit everyone HARD.

Do you really want to punch yourself in the face like that?

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Excuse my ignorance, but isn’t any wealth tax based on what you earned that wasn’t income related? Are you talking about something that is being proposed? Or something currently on the books?

Using Trump as an example, his wealth is now being assessed, highlighted in court proceedings and being taken away by protracted laws and legislative chicanery to enrich an individual, lawyers and the state of NY. Hell, they want to Fire sale his assets and ■■■■ his family from doing business!
If they can do it to Trump Organization they can do it to someone making middle income.
Take from the rich and spread it out amongst the poor. And taking down billionaires wealth leads to more unemployment and further loss of tax revenues.
The progs are morons.

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Let us please not pretend that the ultra wealthy use money or their wealth like the rest of us.

In reality the very wealthy borrow against their wealth in a series of rotating loans paying off debt with debt that allows them to not only write off that debt as a liability, but enables them to accumulate more wealth with very little risk.

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Don’t cheat at your business and you will be fine.

The Biden proposal only goes that far, but when you think about it that’s bad enough.

States are proposing this. California, Vermont, New York, the blue states.

The reason I put this here (instead of outside the beltway) is because any kooky proposal like this is going to affect everyone regardless of the state you live in. Massive sell off’s on Wall St regardless of the reason tend to do that.

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Why would they sell off? When they do that they would have to pay taxes on the gains. It does them better to retain their wealth and borrow against it and report that loan as a liability for tax purposes.

So you want to punch yourself straight square in the face because you think the rich are somehow cheating?

Elon Musk sells off a few million shares of Tesla and is still worth $198 billion dollars.

You OTOH get a ringside seat watching the massive sell off on Wall St, witnessing your union pension fund crater, and will be wondering how you will ever be able to retire.

Is that what you were hoping for?

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How else are they going to pay for it? Do you think there is a magic money machine in their back yard none of us here are privy to?

Elon Musk isn’t the only rich guy. He functionally only pays taxes when he does sell his assets. He has sold his assets because as it turns out… he is kind of erratic when it comes to business and relies on gaming the government to keep him afloat.

So why would the very wealthy sell off their assets when it is what they use to borrow against and live off of for ta advantages?

Yes. There actually is. They have access to resources that you an I do not have. They are living in an entirely different reality. That reality is constructed so they can accumulate as much wealth as possible.

If they actually did that, it would eventually catch up to them.

Money has to be repaid. If you are borrowing against your business, or holdings in order to live on, when do you pay it back?

You mean leveraging your business or holdings in order to expand current business, start a new business, or work on new technologies you and I directly benefit from?

How is that evil?

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It actually doesn’t. They live on rotating debt for the rest of their lives.

When they die.

Welll… when you put it that way… Nah man… they pay as little as possible in order to maximize shareholder value at the expense of the American workforce.

It is what allows Jeff Bezos who has shooting people into space money pay a tax rate of 0.98%

The idea that the ultra wealthy are ultra wealthy through w2s or 1099s is up there with job creators will create more jobs if only the government lets them keep more of their money

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And all very legal.

It is legal… the thing is that we could change it. The tax code isn’t on tablets handed down by God… unless we think that God is the group of Billionaires who spend quite a bit of money to lobby Congress to tilt the scale to their benefit.

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You mean like doing business with banks that solicit your business, using a declared collateral and the banks agreeing to the loan agreement after their own examiners have made approval?

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So you would sacrifice jobs to justify exposing “the rich” to higher taxes who employ workers that also pay taxes?
Because “the rich” who own companies that are taxed because of their wealth start laying off then closing altogether.
The Trump Organization for example. State of NY is going to or has already lifted their business licenses impacting not only Trump family members but employees. Watch as other companies leave NY to do business elsewhere and take the millions if not billions in tax revenue with them.
Great strategy no?

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