- 2.5M worth of real estate bought recently
- 1M of job income
- 1M selling shares that 10xed (some stock option idk)
- driving a 150k $ car
- spending 150k $ over the years in taxable goods
It came around 840'000 $ or around 40.1 %.
I wouldn't say it's that bad, this even includes sales taxes (probably the fairest of all taxes).
With even basic tax optimization (401k, federal deductions) you get that number down to 780'000 $, with something a bit more sophisticated depending on circumstances you can get it easily lower than 600k or 32% ish.
The biggest problem is that people above that tier end up effectively paying less sometimes even in absolute terms just by borrowing against their equity and not triggering taxable events.
Honestly taxes are complicated to implement, I'm not sure how can you implement a progressive yet fair system without loopholes and without severely degrading services (roads, infrastructure, education, healthcare, military, etc, etc).
And every time you decide to cut on services, you are just moving money elsewhere: more inequality -> more social tensions and criminality, you just end up paying way more to live in a safe place and pay for private and public security and prisons.
It's really difficult.
There's no reason to think that the amount of taxpayer-funded services in a political jurisdiction has inversely proportional relationship with amount of crime that that happens there (nor any particular relationship with what kinds of crime, how serious the specific crimes are, and so on). Same thing with social tensions - social tension are caused by a lot of things, many of which aren't particularly related to the raw amount of taxpayer-funded services that exist. Would a more redistributive welfare state have made the partition of India between (mostly) Hindus and (mostly) Muslims less likely, for instance?
I had a coworker that argued for a flat tax—considered that fair. I explained that anything less than a progressive tax was going to make the poor pay more and the wealthy pay less. Really, that's fair?
You should be so lucky to have enough that you're in the highest tax bracket.
Through that confusion of language, it might then manage to be popular with both libertarians and progressives.
Here's a formally-verified proof in Lean that with a flat tax, if you have more income, then you pay more tax: https://live.lean-lang.org/#codez=JYWwDg9gTgLgBAWQIYwBYBtgCM...
The theorem uses one important assumption: that the flat tax rate is positive.
But if you account for minimum living expenses M, if you are under M, 30% of M is "more" than if you are at 10x M for the quality of your life. What scheme is "fair" is harder to figure out, though.
Yes, I object to that type of language too, but let's not ignore the context.
It's hard, but possible. However the goal of people who created current tax code is exactly opposite: to create system with loopholes.
US tax code is a mess, there should be less amount of different taxes, more unified taxes.
Georgism, a single tax on the unimproved value of land
Just curious: what makes you come to this conclusion?
i.e. A burger wrapper doesnt care about economic status.
The economists I've read disagree strongly.
Also everybody pays them, including people that avoid taxes (including criminal activities and tax evaders).
The argument against this is that lower income households pay more of it as a portion of their income thus the consensus is that to be fairest you need rebates and no taxes on many essentials (which is why often medicines or milk, bread etc have very low or no sales tax/rebates).
1. Regressive deals with % of income spent.
2. Regressive deals with an ideal state where those with more excess income contribute more than those with less.
In both of these, I suppose sales tax is regressive if it applies to all items, but only 2 is regressive with sophisticated rebates and untaxed categories.
You keep saying this, as if it will make this true. Please list these "economists"/"most economists".
I don't know who should pay what amount, but I'm pretty sure that me and that millionaire should have different tax brackets. Let alone people with tens, hundreds of millions or more.
PS: I'm in EU, not USA, but here I'm in a highest tax bracket so the point still stands, my tax rate is the same as for any local millionaire. Maybe even more, since those people are aggressively utilizing tax loopholes, shell corporations and offshore tax havens.
Disregarding all technicalities about what proportion people actually end up paying after performing clever tax planning.
Why are you sure that someone earning 1M should have higher proportion of their income taken away than someone earning 100k?
At some sufficiently low level of income I think it stops making sense collecting taxes, but beyond that I'm not so sure from a fairness-perspeective.
I could perhaps get on board with a hard cap on wealth, for preserving democracy. It is dangerous to have single individuals and families attain too much power. But up to that cap, I don't see any inherent unfairness or inefficiency in that people of moderate to high wealth pay the same proportional rate.
As for proportionality - taxes are inherently unfair on the individual level. But they are fair on the large society level. All of our niceties are essentially funded from taxes. Current "free market" plus corruption mean that to finance growth more and more money is needed and part of them come from more and more taxes. But a lot of basic goods are fix price or low enough price, so that they make le and less percent of person expenses the more income rises. So to be more fair, it is fairer to increase tax on the ultra-rich class and spare tax increase on poorer classes, making average suffering lower. If we simply increase all taxes, then the lower the income the more tax a person would pay. It in kinda unfair and not productive to do it this way.
Well, a progressive (also wealth?) tax should help to accomplish that.
My take on the wealth-cap is that it isn't about fairness at all. Actually I think it would be mostly unfair, but that it would be good for society anyway. Fairness is an important value, but it is not the only value.
It's actually pretty easy to pay an 80%+ tax rate in California if you consider taxes that your employer pays, sales tax (11%+ in some areas), local assessments, capital gains tax, etc.
Taxes paid by your employer aren't taxes you pay.
I'm quite sure your calculator is very basic and stops at 401ks and little more, there's stuff like mortgage interest, being married with kids, backdoor roth, etc.
But yeah, wouldn't change the number you said dramatically, maybe it would lower it to 45%ish on a 2M income.
They have the same effect in that they reduce what employees take home in a given labour market. Employees are effectively paying them in the same way that people who buy alcohol/cigarettes effectively pay more in states with higher taxes on those items (even though the taxes are technically paid by the stores).
If CA eliminated all income taxes and instead had employers remit the same effective rate for all salaried employees, employers would just reduce salaries accordingly.
As another example, France's income tax rates cap out around/below some high tax US states. But France is still a comparatively high tax jurisdiction largely because they also impose massive payroll taxes on employers which effectively reduce employee wages.
> They have the same effect in that they reduce what employees take home in a given labour market.
Careful, you're thinking like a Marxist (assigning value based on costs ultimately culminating in labor). Under Capitalism, value is assigned based on the meeting point between what people are willing to pay, and what people are willing to sell it for. Some things, like Pokemon cards, are far more valuable than any costs incurred in their production. Other things, like Aunt Betty's utterly disastrous attempts at baked goods, are worth less than then they cost to produce. Payroll taxes only directly effect the purchaser's willingness to pay. Only if we believe that companies are currently paying 100% of the wages they would be willing to pay if they needed to can we call the payroll tax entirely a tax on the worker.
Yes, likely not exactly the same (a bit more kept by employers in overcrowded job markets, a bit less in others), but it would essentially support the interpretation that most of that is really a tax that goes out of employee "budget", or their total comp.
Yes, it probably would depend on positions and available talent, but overall and over a longer period, if applied universally to a market (say state like CA), it will be reasonable to expect salary increases (but not increase of how much is that worth because of increasing purchasing power, and increase in prices due to higher willingness to pay).
They also have the effect that everybody has to pay them, including tax evaders, tax loophole abusers, criminals with undeclared incomes, etc, everybody has to pay it.
But yes, without offering sales tax rebates or with taxing essentials then your argument is true and they become less fair.
Albeit, the elephant in the room is always the definition of fairness itself.
In jurisdictions using VAT (like most of Europe), there are whole schemes like that to effectively reduce your VAT burden through use of company purchasing.
Which is to say, being poor is expensive, and sales tax only makes it more expensive, while literally not affecting the bottom line of those in higher income brackets.
But I take it from your glib comment you'll disagree or deny that.
LOL. Do you actually think that person has read Capital or much of anything economics related? These types of internet arguments don't happen among equally equipped participants. People can just say random shit on the internet it turns out. They do it all the time.
Of course, you're also going to have to face the problem that representative democracy includes the ability to buy loopholes.
And then, there are unintended consequences because representatives aren't necessarily the most financially savvy. I'm thinking about the 401k program that disproportionately advantages high income people when it was touted as a savings route for middle class people.
401k identifies this loophole and sets limits. Setting contribution caps, limiting withdrawals until retirement, etc. Then they incentivized offering it to the poors, too, because working out an ad-hoc agreement like that is the sort of shit only really high power people in a company have the opportunity to do.
In short, the primary purpose of 401ks wasn't to benefit the middle class, it was to slightly reign in the rich.
1. It limits the opportunities for the government to use force on the general population. Today, if you do not file your annual taxes, men with guns come and put you in jail. A sales tax does not require this level of enforcement to be inflicted on the average citizen.
2. It's voluntary to a degree. Today if you don't like what the government is doing and want boycott paying taxes you cannot practically do so because of point 1 above. With a sales tax you can decide to defer unnecessary spending as a form of protest.
3. In theory it's vastly simpler to reason about and plan for. The myriad of tax advantaged accounts that have proliferated over the years in the US is daunting: IRAs, 401k/403b, 529s, FSAs, HSAs, Trump Accounts, Roth variants. We ask citizens to best guess how to allocate investments between these vehicles for goals decades in the future. If you need emergency access you're often looking at paying penalties. Not to mention the poor user experience baked into many of the designs. 401ks put the burden on your employer to restrict your investment options to their curated choices and their chosen plan administrator. You have to leave your job and roll it into an IRA to finally have the freedom to pick your own investments and who you have the account with. FSAs have the annoying use-it-or-lose-it rules. 529s are bizarrely state sponsored but you can choose a plan from any state. Like your state's plan but want to have the account at your broker? Too bad, you have to use the administrator your state chooses.
4. It's widely understood that if want less of something you should tax it. By taxing income and wealth it discourages work and saving. A sales tax discourages consumption instead, which encourages saving and is also pro environmental.
5. Changing asset allocation is free. Today, changing investments in a taxable account, where there are gains, triggers a taxable event. This discourages the movement of that capital to other investments.
6. In theory it's harder to dodge taxes as the simpler system has less loopholes.
7. On average, people with more wealth should have more expensive lifestyles which translates to them paying higher taxes.
I understand the arguments that sales taxes are regressive, let rich people dodge taxes by living frugally, etc. I accept all that may be true and I'm ok with it. Many seem fixated on using the tax code as a mechanism to level inequalities, as if that were its primary function, and a sales tax doesn't advance that goal enough for them. I think I can accept that some people are going to be vastly wealthier than me and are going most likely live a much easier life because of it; much like I can accept that some people are going to much prettier than me, taller than me, less genetically disposed to certain medical conditions, have been born to better families/circumstances and those things can all provide significant advantages in one's life.
I agree you should want to avoid having an income disparity like this, but we are where we are. The goal of this tax is to help correct that disparity.
One argument could be that maybe entrepreneurial personality traits aren't normally distributed, and unless you find a way change people's personalities in mass, the imbalance in wealth attraction will remain inherent.
Then you might ask, if that's true, do you I want to enforce equality, potentially dragging down the economy to mediocracy (for example many stagnating European economies) or maybe accept that current nature does not meet our societal desire for equality.
It's simply because money is compoundable. The more money you have the more you can make, and the more you make means less other people have.
This is a false zero sum view of wealth that is unfortunately all too common.
Having lots of wealth does not mean other people have less. If that were the case, there'd be as much wealth today as there was 1000 years ago. Making a company and having it valued at whatever value, does not remove that amount of wealth from other people.
If I have a $200K net worth, and I'm living in a city where the range is $1M to $500M, then I'm pretty much living in poverty, even though I have "more wealth" than in scenario 1.
This is also why, although my absolute wealth today is hundreds or thousands of times more than a king in the middle ages, I'm not actually living like a king today.
It's also how gentrification works. You're living somewhere and all of a sudden a bunch of very wealthy people move in, raising the prices of everything. You're no more or less wealthy than before, but everything has become slightly worse.
Can everyone be rich enough to not be in the bottom 20%? No, no matter how rich we become.
Can everyone be rich enough to have servants? No, unless you count machines as servants. But if you do, then I'm rich enough to have several.
> There's not a finite amount of wealth.
I think there is a finite amount of wealth, at any given time, same as "money". Money is a transactable medium to measure value, rather than as a type of good on its own. The medium can change region to region and over time.
Wealth is an aggregate of all valuables you possess, including expected gains. Wealth is also subjective, because of these properties. People agree on some approximations for the purposes of transactions with money.
> Making a company and having it valued at whatever value, does not remove that amount of wealth from other people.
Depends on perspective, I would say. When the value rises in a public company, even when it's just the expectation, you have people dumping their wealth (as money) into the company. So yes, it does for large public companies. While it does grant some rights, in a practical sense it's a hole you dump money into with the expectation that you can reach in and take out some amount in the future. I can understand this is what is envisioned, when people talk about wealth as zero sum. I don't agree, but I get what they are going at.
> If that were the case, there'd be as much wealth today as there was 1000 years ago.
Wealth is partially based on expectation. The growth in population fuels increases in wealth, because that's the part of the equation that is speculative.
It's not an issue that they are wealthy, it's that they are abusing that position to gain even more wealth at the expense of the rest of the population.
> Making a company and having it valued at whatever value, does not remove that amount of wealth from other people.
This is a strawman. The ability of people to accumulate wealth is affected by every aspect of the economic system, including the means by which those companies are acquiring wealth.
Lots of people with great ideas, skills, and work ethic don’t have $250,000 lying around to invest.
And Bezos's biological dad was a unicyclist, his mom got pregnant with him at 16 and later dropped out of college, and his stepdad was a Cuban refugee who got an education and became an engineer for Exxon. Going from zero to billionaire in two generations actually says something remarkable about our system.
Think about it another way. If the government doled out $500k to fund business ideas, do you think that investment would be available to kids of refugees? Of course not. There would be gatekeeping behind credentials and connections, and it would be open to a lot less than 10% of the population.
[1] In terms of birth lottery, having top 10% parents is like being born smart enough to get a 1290 on the SAT or having a 120 IQ. Not exactly rarified aid! https://research.collegeboard.org/reports/sat-suite/understa...
Amazon does not have an exceedingly high profit margin, and my understanding is that a lot of it comes from stuff like AWS, not Amazon deliveries - correct me if I'm wrong here. So I'm not sure that "three amazon deliveries a day" - if this is even common - is why that man is personally rich. Even if it were a big source of revenue, that would go into Amazon's coffers, not necessarily his directly.
Another way to look at this: Even if Amazon is wildly successful, does that mean Jeff Bezos specifically should become filthy rich as a result, instead of all its employees and investors? How should the gains from successful entrepreneurship be distributed?
Jeff Bezos owns 9% of Amazon. So 9% of the expected value of the money going "into Amazon's coffers" indefinitely into the future is counted as part of his current "wealth." It's not money under his mattress.
Is your argument that people shouldn't be allowed to own 9% of a company that they started?
The term "capital" is an abstraction that's not helpful here. The big "wealth" numbers are all about equity ownership in highly valued companies. Bezos owns 9% of Amazon stock. That's why he's "rich." What should happen to that stock? What happens to his voting control over Amazon?
The question boils down to a feeling that when the revolution comes, that no one person needs more than, say, $100 million for themselves, or not. Trying to distract the conversation into defining "for themselves" will only prolong your time before the firing squad, comrad.
The answer depends on how should the losses from unsuccessful entrepreneurship be distributed?
For whatever reason, construction hits a snag or revenues are not enough to cover expenses, how would it become “society’s” problem? Do I get made whole by the government giving me $1M, and the government takes posession of the property?
If so, I foresee a lot more opportunities for corruption.
https://fortune.com/2026/01/13/us-workers-smallest-labor-sha...
And thinking about bubbles, imagine what happens when the GenAI one pops. The wealth some new billionaires had will go up in smoke, their assets will go on sale, and they'll be gobbled up by the old billionaires.
But I think still a lot of people would argue the distribution is too unequal.
Luck always plays the biggest role. Maybe the billionaires would have always been successful in some way, but not be a billionaire or even a millionaire.
Also, your argument sounds like a just-so story designed to support the status quo.
> the imbalance in wealth attraction will remain inherent.
Is is really a good idea to be ruled by the people with the greatest "wealth attraction?"
> Then you might ask, if that's true, do you I want to enforce equality, potentially dragging down the economy to mediocracy (for example many stagnating European economies) or maybe accept that current nature does not meet our societal desire for equality.
Yes, because regardless of anything else, the wealth imbalance has been politically destabilizing. Your comment strikes me as out-of-touch quantitative thinking: making certain easily-measured numbers going up the highest goal, while ignoring other things that are harder to quantify. That's a blind spot shared by a lot of people, especially tech people.
So in regards to this economic issue, it seems that human personality traits that lead to disproportionate power/influence/money are distributed non-uniformly to an extreme extent.
We can try and moderate it as a system (e.g some forms of democracy, socialism, etc.) to maybe lower the amplitudes, but it would be ignorant to deny that this might be a core part of current human nature. Humans themselves are a specie with disproportionate power & influence compared to other species, so I think it would only make sense if this trait would also apply within the specie.
Now imagine, there'd be some alien government, who'd be like "whoa humans are making way too disproportionate progress compared to the other species, let's tax/prune them so they don't get too much power".
What do you mean, you found that out? And what does that have to do with anything?
> So in regards to this economic issue, it seems that human personality traits that lead to disproportionate power/influence/money are distributed non-uniformly to an extreme extent.
To me, that doesn't sound like an observation, but rather an interpretation. We could apply various epistemological carpet beaters to see what remains. One would be the critique of ideology. A few others can be found in the philosophy of science. It also seems to contradict your reference to thermodynamics. Wouldn't that mean that personality traits don't play a role at all? We don't look at individual particles, and certainly not at their personality traits.
> Humans themselves are a specie with disproportionate power & influence compared to other species, so I think it would only make sense if this trait would also apply within the specie.
I cannot understand this conclusion at all. Why should the structural relationship to other species be reflected within the species itself?
By completely ignoring the facts about it.
> So in regards to this economic issue, it seems that human personality traits that lead to disproportionate power/influence/money are distributed non-uniformly to an extreme extent.
It doesn't seem that way to people who look at ALL factors, not just this one that is chosen to justify a sociopathic ideology.
Compound interest, and as (admittedly) an armchair economist I buy into the argument that goes along the lines of:
"when the rate of return on capital (r) is greater than the rate of economic growth (g) over the long term, the result is concentration of wealth".
In my view, r has been greater than g for some time now.
> Then you might ask, if that's true, do you I want to enforce equality, potentially dragging down the economy to mediocracy (for example many stagnating European economies) or maybe accept that current nature does not meet our societal desire for equality.
To me, it is clear that while Europe optimizes for quality of life to a large extent, Americans really drink the coo-laid and enthusiastically optimize for shareholder value. I highly encourage you to give life in Europe a go at some point. I hope you'll return (or stay) also having reached the same perspective.
I think for competitive and talented people, US in general offers much more lucrative opportunities as long as you're OK with the US specific drawbacks. For non-competitive people, living in Europe would probably be a more convenient.
I think the problem though is in the future, both the US and Europe has grave societal and economic issues but from the different angles. Europe lacks economical drive and seems to discourage change on a cultural level. The US on the other hand seems to be an extreme catalyst.
I'm not familiar enough with quantitative data to judge on the compound interest, nevertheless I think in the last few decades we have already been witness on the global level to major changes in wealth: empires like UK have shrank, giants like China have risen. This had been very different a few decades ago and is an anecdote at least that compound interest can only do so much for empires, in the face of major changes.
Only issue is, when you account for depreciation, you find that r>g applied to housing (so boomer NIMBYs) not billionaires.
This is not a Karl Marx thing, but a Henry George thing.
https://www.brookings.edu/articles/deciphering-the-fall-and-...
Why is it that we have to trim out nails when they grow? Why not leave it natural?
Why do we remove the weed in between the pavers in our backyard? Why not let it be natural?
The fact is the world around us needs constant work. Our capitalism is no different. It needs constant pruning or it becomes gluttonous. There was a book I think which said most people involved in illegal drug trafficking are barely getting by, most of the income is soaked up at the top. I don't remember the point the bio was trying to make but it feels like that way for any enterprise these days.
The richest people in the US have reportedly increased their net worth by over 1.5T over the course of the last year or so.
How is this sustainable?
The notion I'm getting is that these forces that drive change are bigger than all of us, and they are inherently unsustainable in the larger scale of things, pretty similar to how solar systems are not really sustainable in a scale much larger than us, but not that is still pretty small in a universal scale.
So for your perspective it might be unsustainable, but for the bigger system what you describe is smaller than a grain of sand.
Besides, there's this thing called tax incidence and it's not as simple as "tax the billionaires" because it's not clear how that plays out in terms of people's wages or middle class investments.
On the other hand, land value taxes would actually be incident on landowners.
Therefore devaluing the value of the dollar so that those who had basically steady state income (wage earners) have been completely fucked while the lucky ones had their yachts rise with the tide.
I'm not particularly in favour of high taxation, but I think that the argument is a bit more subtle than that. The general point is that "the ultra rich" are able to benefit from a whole host of loopholes which allow them to pay proportionally less than the plebs.
Now, this specific point seems somewhat debatable, judging by the fact that people don't seem to agree; I personally have not looked into the matter to form an opinion.
Maybe our tax code hasn't kept up with the financialization of the economy. In any case, this whole tax increase thing, at least as I see it in France, since to spill over to "regular rich people", as in engineers or similar who "just" have a relatively high salary.
Another issue, which I think is different but is rolled into complaints about rising tax rates is what the state actually does with the money. As in "I'm ok with paying tax, but not to fund this or that thing". In France, specifically, many "public service" offices have closed, having people either travel great distances or fight half-assed computer systems, while, at the same time, the number of public servants (so, cost) has increased.
Do you not see this? Probably because you don't feel it in your pocket (yet, let's see what happens when the USD crashes. I will feel it too, no doubt.)
There's the belief that the economy can be a mighty tool to improve our lives, but isn't it going pretty much overboard since some time? Is this materialistic growth-at-all-costs ideology really making average US lives better these days?
From the outside the US feels like a runner that is stretching its arm towards the finish line (total automation) while also falling on their ass.
That's not an argument, it's a completely counterfactual assertion ... or rather, the assertion that this is the cause of uneven distribution of wealth.
> Then you might ask, if that's true, do you I want to enforce equality, potentially dragging down the economy to mediocracy (for example many stagnating European economies) or maybe accept that current nature does not meet our societal desire for equality.
But of course it's not true, it's just an attempt to justify a morally bankrupt sociopathic ideology.
The actual question is: "If we tax tax them, will they leave? (losing the planned tax revenue/backfiring)"
It is pretty easy to avoid state taxes - just move to a different state.
Sounds like US vs Europe. Having redistributive policies funded by taxes works well until your most productive people flee for a country that doesn't, and you steadily lose ground to competitors economically.
It's going to be hard to provide all of that when you don't have the money for it (eg. fiscal crisis in France right now), or if you get invaded by your neighbor (or any other competitor) eclipses you economically and then uses that to subjugate you. The european model of reaping the peace dividend and using it to fund a more generous welfare state worked from 1990s to 2010s, but is breaking down with the rise of china and russia, and is further exacerbated by sluggish growth and the demographic/pension crisis.
This is the actual issue, which we often avoid talking about because it's grim. Like, health care is expensive, old people health care is really expensive, and the proportion of old people in many Western countries is increasing over time (because of a fall in birth rates). I believe the FT had a good article about this recently, where they showed that the vast majority of extra spending from government was on old people.
Now, clearly, society doesn't want to just shoot old people when they get sick, but I'm not sure how taxation is gonna look as the proportion of old people increases. Obviously increasing retirement ages helps here, but that's mostly just a massive tax on blue collar workers, who are much less likely to be able to continue working into their 70s, whereas for many cubicle jockeys, it's a lot more plausible.
Personally, I think a higher goal for the state is to provide a substrate of sufficient physical safety, law and order, and infrastructure so that its citizens may have the ability to pursue their aspirations. I think human thriving is very important. And I want the ability to try at a ridiculous thing and achieve commensurate reward. In many ways, I don't even want that for me. I want that for others. When I see someone take a crack at something that most thought impossible and make it happen, I love it.
It isn't that those of us who have this opinion are temporarily embarrassed billionaires. It's that we like that someone took a crack at something absurd and became billionaires for it. People who don't get it always say these things out of misunderstanding: "Why do the poor in the US vote so often against their own interests?". The obvious answer is "because they are principled and not purely self-interested".
70K a year is poor in California, but top 1% rich in almost any country in the world.
Low income disparities are countries like Albania, Afghanistan, Armenia to name the first three with below 30 GINI income.
The USA and UK are leading the process since they started to pursue this goal aggressively during the 80s with Reaganism and Thatcherism.
The increase in wealth of billionaires in 2025 was $1.5 trillion: https://americansfortaxfairness.org/billionaires-1-5-trillio... Most of that isn't even real money--it's people betting on AI. (As an aside, is the government going to give huge tax refunds when the AI bubble bursts and all that "wealth" disappears?)
If the U.S. just taxed people the way they do in Germany we could raise trillions in revenue without resorting to tricks like one-time wealth taxes. The focus is on billionaires because Americans want a German-style welfare state without German-style taxes on the middle and upper middle class.
So if you get a $150M loan off of your amazon shares that on paper are worth $150M, but you paid $100M, you have a cap-gain of $40M, and at 20% tax, $8M fills the IRS's coffers.
Obviously the tax basis in the assets would also be stepped up by this action.
The US should also get rid of the step up in basis at death. The recipient of an illiquid asset such as a family business should have a period of time (perhaps five or ten years from the triggering death depending on the type of asset) to "pay up" the tax basis "to market" at the time of death. Gains in liquid assets (such as publicly traded stock) should be taxed at the market value at the time of death by the estate or trust and passed on to beneficiaries with that adjusted tax basis.
This would actually fix the issue without my suggestion, but it is a harder pill to swallow for the "soon to be rich" Americans that tend to vote against their current economic interests.
Is this a real problem? And how do we fix that?
If you inherit a farm worth 1m and you have to pay estate taxes on that of 100k. You do not have to sell the farm, you can instead take out a mortgage to cover that 100k.
When we frame it that we its still very fair to the person inheriting the farm because who wouldnt want a $1m farm for 100k.
The point is to disallow people who make a man's yearly salary every 60 seconds from getting <2% loans against an asset pool that would take hundreds of years for the average American to amass, if ever.
Of course there are still countries where one could park their money outside the OECD members but many of those are not exactly a "safe" place for such assets.
But universal is what we need as humanity.
The will seems to be building up, even in the UK (Polanski) and US (Mamdani, AOC, Sanders).
I'm betting that the success will be replicated in other countries soon and after that its only a matter of time for this to go global.
But this will be interesting show.
Hasn't this already been tried numerous times in numerous countries already? Didn't France attempt it multiple times without success and actually lost tax revenue with the creation and enforcement of the tax? Not to mention the wealth flight?
[0]: https://www.brusselsreport.eu/2024/09/11/the-failure-of-norw...
Mandami, AOC, and Sanders are the laughing stock of much of the electorate in the US. They are fairly popular in progressive population centers but not elsewhere. There have been activists promoting much the same ideas for my entire life (and I'm not young!) and they rarely if ever get national traction.
The "silent majority" in the US is just that - they don't make the news because they, in most cases, don't go out and protest and engage in battles with law enforcement. They have jobs, go to work, go home to their families, and vote - but they rarely are seen in the news any more than the fact the sun came up in the East and set in the West yesterday is "newsworthy" enough to be promoted in the media. "If it bleeds, it leads" is the criteria for being newsworthy.
Until masks and Musks we're taken off this year it was possible to pretend that the normal would play into their hands, as long as they stayed silent and played along.
Now pretending that the middle class can survive under the zillionaires Reich is only possible for very delusional minority.
My hunch is that Mamdani and Polanski have struck this nerve. Already before the events in Minneapolis, but now the support for this is dwindling.
I've done some experiments here in the normal and even the well off people are seeing the root cause. And it being the narcissist individuals holding godlike power, instead of the good ole "rule based" or "value based realism" or "systemic change" or even the latest "superorganism".
But remains to be seen, I might be wrong or even worse the power can be so centralized to zillionaire cliques.
did the people ever leave ? NO
That figure is highly misleading to cite by itself because the high tax rate also came with a bunch of loopholes and exemptions. That's why despite the drop in the headline rate of 70-90% or whatever, the actual tax take as % of GDP has remained remarkably steady in the past 7 decades.
So it's not like it was actually a tax on the wealthiest, more a targeted tool to apply state power.
For example GWB "lived" in texas the whole time he worked in washington.
Or, I guess, just don't deal with the US and either don't go there, or hope to not get caught.
I think this comment is a little off-topic.
On my block alone, are the houses of (at least) two "49-percenters". 183 or a few more days of the year the owners are at their second homes in Arizona or Nevada, and gathering gas station receipts to prove it, while their California houses sit empty -- all just to avoid our state income tax.
How about that as a poster-child for misallocation of physical capital?
https://www.youtube.com/live/4HpJKPywXqY?si=bb-p558jl_otP25I
In her research she found that many of the ultra-rich people actually have deep/patriotic/nostalgic ties to their home/community and want to invest there. They often use certain tax-evasion measures because everybody else does and she argued that those few ultra-rich people who really just care about minimizing their taxes have already moved everything abroad.
It’s wild how dominant this proposal is. Not reducing costs. Not cutting benefits. Not a broader tax increase. Not a combination of ideas. Just “f*k these guys in particular.” If this is what passes for governance in California I’d leave too.
Furthermore given whats at stake you would divert 1/10th of those funds to making sure that act never passes.
If an owner takes out profit, they are punished with high income taxes. So they reinvest in their business, and this is what the government wants because it creates jobs, innovation, products and services, and tax income.
So they've been doing what they have been forced to do by the government. And as a consequence their companies are worth a lot.
Now the government wants to tax them on the company value?
If everyone would be able to play these tax avoidance schemes I'm sure society would collapse. For big players these are easy schemes and somewhere this untaxed wealth must be recaptured. Just favoring the rich further accelerates the wealth imbalance.
Would it? Or would it just shift demand around? I mean the money is still there, and I don't see any reason the entities with money would lock any more of it up in a "static" manner (e.g. gold bars and piles of cash) than they do now.
But everybody is able to reinvest profits into a business they have, whether that's an industry giant, or a tiny one-man shop. There is no government on planet Earth which considers that to be "tax avoidance". Governments want profits to be reinvested and not paid out to owners, even the most socialist governments you can find.
If you're against this, then you shouldn't talk about taxes. You should rather talk about abolishing private property completely.
Yes, that is the old discrepancy between society in the true sense and society as imagined by libertarians. A few strangers waiting together for the bus do not constitute a community. If the bus is canceled and they organize a carpool, then a community has formed. If you scale this up and replace personal relationships with institutions, you have a useful concept of society.
For libertarians, society is any large gathering of people who interact with each other in some way (or not), even if they rape and devour each other. If you understand society in this way, it cannot collapse (or is constantly collapsing).
That would be the consequence of taxing ownership in companies, since there would be no reason to invest to create big companies. And for industrial society you need big companies. You need giant companies, and taxing owners on the size of the company means that people will not invest their money or effort build industrial scale companies.
The other way to have industrialization is to instead have a command economy, where the government mandates what is to be done.
I agree.
But I'm not convinced by the next paragraph. You present it as if it were a matter of 0 or 1. But I don't see any good reason why taxation shouldn't be used to make adjustments without immediately collapsing the entire incentive structure for investment. Less profit is still profit. If this argument were valid, there would be no large industries in countries that tax companies more heavily than the US.
Thinking about how incredibly many factors have to come together right for a giant business or industry of any kind to be able to exist, I understand that governments are very careful to not poke them with too many sticks. Their products and services exports (and imports) are an incredibly valuable bargaining chip in foreign politics. The only other significant bargaining chip which nations usually have are military threats, and that isn't a pleasant road to travel.
It's like in a combustion engine. Oil has to be added for the engine to work. But over time, dirt particles, metal abrasion, soot, and combustion residues accumulate in the oil, overwhelming the oil filter and reducing its lubricating ability. If you don't reset it to a “healthy” basic state at regular intervals, it gets so bad that it prevents the engine from operating and ultimately even destroys it.
Does the massive wealth inequality we see today cause problems that lead to the erosion of society itself? I would say yes, definitely. Of course, it is frustrating for these people when the money they have generated is taken away from them. But let's look at it realistically: if someone has $100 billion and $99 billion is taken away from them, they are still in a situation where they lack nothing financially.
At some point, you've played capitalism through to the final level. And then you should put down the controller and go outside to listen to the birds chirping instead of frantically chasing after the growth of a number that, due to its sheer size, no longer has any concrete meaning, apart from the fact that there may be two other people whose numbers are bigger or who are hot on your heels.
On a side note. Yes, the massive wealth inequality is eroding society. But billionaires aren't the source of this problem. They are outliers, freaks if you so will.
The real problem is the massive wealth inequality is the gigantic prices of real estate and rent, created by the monetary system being based on real estate instead of productivity. That means it is very hard for a person to claw and scratch her way to equality if they're not born with real estate or gets that benefit at an early age. For most, their irredeemable mistake in life was choosing to be born in the wrong decade.
At the same time a huge percentage of the population who has never made any effort in life and generally have no talent or any admirable qualities, get great wealth and comfort by having been born at the right time.
For every billionaire there is a a hundred thousand of the kind of person described above. Most of us have them not far away, and they have a hundred fold bigger impact on our lives than any billionaire. And at least many billionaires have at least accomplished or done - something - in their life.
> At some point, you've played capitalism through to the final level. And then you should put down the controller and go outside to listen to the birds chirping instead of frantically chasing after the growth of a number that, due to its sheer size, no longer has any concrete meaning, apart from the fact that there may be two other people whose numbers are bigger or who are hot on your heels.
Wouldn't building a rocket to go to Mars for example be such an endeavour, which is bigger than chasing the imaginary dollar number? Or the philanthropic endeavours of other famous billionaires? Or even exacting political influence in the shadows, which is probably something all known and unknown billionaires do?
Rents are expensive because real estate is expensive. Real estate is a good store of value. The massive accumulation of surplus wealth among a small portion of society has led to an increased demand for stores of value. Someone looking for a house to live in competes not only with others who want to live in it, but above all with the super-rich who want the property as a store of value. That's why real estate is expensive.
> Wouldn't building a rocket to go to Mars for example be such an endeavour, which is bigger than chasing the imaginary dollar number?
That's conceivable. But I don't see the space science fiction of Le Guine or Asimov being realized in the activities of Musk and Bezos. To me, the whole thing seems more like an awkward dick measuring contest. The awkward situation with Shatner was a good example of how hollow and superficial this whole thing is. These people could go down in history as benefactors and heroes of humanity. But they don't have the guts for that. Either they launch rockets or go to the gym or sit with Joe Rogan or try to undermine democracy and replace it with a neo-feudalist hell.
Edit: I agree with you that we don't necessarily have to focus on the billionaires who are so prominent in the public eye. Below them, there is a larger class of super-rich people who have their fortunes managed for them, never lift a finger in their entire lives, and yet still attract an ever-increasing share of society's overall wealth.
SpaceX has done a huge amount of engineering work in making the cost to get mass into orbit significantly cheaper, more reliable, and more routine. Elon Musk is, on a personal level, because of the sort of company he chose to build after becoming wealthy, absolutely responsible for bringing humanity closer to a future imagined in space science fiction.
Like, sure, you don’t owe growth taxes for a quarter when you didn’t grow. But why should you be refunded just because prior taxable growth isn’t denominated in money in a bank account?
Apparently paying for gas, water, electricity, property taxes, taxes on everything you buy isn’t enough, now you have to “contribute for enabling”. What’s next? Pay because they “enable you to breathe”?
I have low opinions about unbalanced one sided arguments.
States are in dire need of liquidity. Just look at global debt.
That's been happening for a long time in the US. Staggering military industrial complex. Tens of billions lost in COVID relief. Billions lost in Minnesota due to unchecked privatized social welfare fraud (which has been known about for a decade).
Some mistakes will happen. What we have is unacceptable. If the government can't handle the money responsibly, it has no business collecting the money.
That's more an indictment of the way you (the US) starve your public services of proper regulatory power with the right level of personnel to handle it.
But your Congress voted last year to defund the IRS and the administration are busy gutting the SEC and other regulators.
Oh and government fraud has nothing on the commercial and rent-seeker frauds extracting wealth for no benefit from their positions of control. But anti-trust prosecutions are basically a dead path for rectification.
Blaming the "government" for what happens from obvious policy failures is the fault of the policies and those that set them, not the "government" as some nameless bureaucracy.
>Blaming the "government" for what happens from obvious policy failures
Who creates the policy that fails if not the government? If a supplier kept telling you they'd do something and kept screwing it up at what point do you move them to the bottom of your list for who to call to get stuff?
It's really easy to sit there enveloped in pure ignorance and say "those idiots just need to fund an administrative agency to prevent fraudulent daycare" or whatever but nobody in the US wants to do that because everyone's seen with their own two these sorts of endeavors turn into feeding troughs and revolving doors and rackets that the politicians and politically connected use to run businesses that make money by going through motions that provide little (just enough to keep some political support form useful idiots) value at taxpayer expense. How do you solve such a problem? It's immensely hard and complex.
I'm so sick of ideologues who can't think two steps ahead peddling these sorts of "just do this" simple and wrong solutions.
“New federal data released by the U.S. Centers for Medicare & Medicaid Services (CMS) shows the overall rate of improper payment in Minnesota’s Medicaid program is far below national averages.
In the review released this week, CMS found an error rate of slightly over 2.1%, compared to a national average of 6.1%. The data for the review was compiled before the Minnesota Department of Human Services began implementing new strategies to minimize the risk of fraud and harden its systems against bad actors.”
I’m genuinely baffled at the incredulous tone here. Yes, that is exactly what should happen: laws, subsidies, and incentives enable a company to grow and flourish. Then, as the company grows, other laws incentivize it to give some of its state-sponsored affluence back to benefit the country.
Like, sure, the execution of that process is often dysfunctional, but the fundamental contract there does not seem like it should be surprising to people: we don’t have (many) socialist state-owned businesses, but the point of a functioning country is still to provide good things to the people living in it. Not to benefit businesses or a tiny sliver of the population.
That’s why we have everything from income taxes to interstate highways: to distribute wealth and resources to (a flawed approximation of, but it’s still the goal) everyone in the country. That’s just how non-corrupt governments are supposed to work!
Then why not tax the military? They are surely the most affluent company of them all, if you take a tally of all their inventory.
If you tax companies based on their size rather than their profits, then you're not going to have any big companies. Any investor or entrepreneur would be a fool to invest in making a big company.
But many endeavours need big companies and big investments. For example power plants. That's a whole lot of value to tax, such affluence! Better redistribute this wealth, and instead have a hundred thousand non-affluent hot dog stands.
> That’s just how non-corrupt governments are supposed to work!
In practice, every government in the world does not tax companies reinvesting their profit into growth.
Narrowly: because they're a utility funded by taxes, not an independent entity benefiting from tax-funded infrastructure. Having a military for defense/power projection/whatnot is one of the infrastructural benefits of being part of a state (and one of the things that a company that grows in that state "owes" the state tax money for--whether that's owed on growth or just capital).
Like, do I personally think my country's military should have a vastly different funding profile, incentives, and behavior? Absolutely. But that doesn't change the fundamental dynamic: $state provides $thing (security, clean water, cheap gas, whatever) that makes being in $state good for many people, people who do well financially within $state owe it money back on the basis that their doing well is at least partially a result of $thing being available to them.
> Any investor or entrepreneur would be a fool to invest in making a big company.
Not true. A growth tax need not be a 100% tax, so growth would still be an advantageous thing to do. Many countries have tax brackets today; that doesn't discourage people from getting rich.
If they all had unified in one voice against the administration, Trump might be more constrained. They might not be so hated. If they realized, like Henry Ford, that a strong middle class actually is good for THEM too, all this could be avoided. Instead they’re showing up at Melania screenings while average citizens are getting shot in the streets.
I don’t think they realize the fire they’re playing with my stomping on the social contract that made them so wealth.
Some of them do: https://news.ycombinator.com/item?id=42335797
But the pitchforks are coming for 12 years already. They got accustomed to the sight and even put some measures to redirect the masses so they fight each-other.
Bezos gave $40m to make the movie. It was a way to maintain his companies position. It's standard oligarch tribute to the godfather. See Russia or Hungary for further examples.
The movie cost nowhere near that much to make. Melania got the money. It was her very own little grift, while her husband and his children have been extracting literally billions.
Sadly, I'm far more worried about a thousand people who make a million bucks than I am about one guy who makes a billion.
You don't get to the B number by not being pretty darn shrewd and sociopathic so those guys must be pretty evil but man have the "upper middle class" or "professional managerial class" or whatever you wanna call the "comfortable enough to not think about the harsh economic realities of their ideas" class been an unmitigated disaster for western society over the past 20-70yr depending on how you wanna measure.
Make stock buybacks illegal again too. Overturn Citizen's United unless the head of the company can face charges for the actions of their company.
The concentration of wealth into the highest strata is a recipe for societal collapse seen multiple times in history.
I don't get why we have to jump all the way to a wealth tax, could they not just force asset backed loans to trigger a tax? This seems way more targeted and we won't have people assessing what everyone is worth. I think it would avoid some unnecessary precedent setting. They could put the impetus on the billionaire taking the loan to state what the assets are worth and related gains.
The wage earners feel the inflation in their wallets.
Can they take a loan on existing stock? Yes. You can leverage assets and this, itself, leads to some pretty unfair things. No need to inflate it to the idea that "getting paid in stock means you don't pay taxes."
How's this different than if CEOs or whatever were paid in cash, and then they immediately bought stocks with the cash?
I think you're confusing this with the case where founders or early employees own large amounts of stock that they received early on in the company. They paid little to no taxes when they received it because it was worth basically nothing at the time. Later, the company has grown and it's worth a lot, so they have a large unrealized gain that they can use as collateral for loans. But that certainly wasn't guaranteed to happen. Most startups fail.
Especially in UK where The Rich that dont belongs to UK in the first place will of course move and leave. Those who are born and raised are highly unlikely to move.
And perhaps most importantly the question completely ignore the real problem. There isn't a lack of Tax revenue, but the government incompetence to allocate and use it wisely. To raise tax is just saying what we are doing now is absolutely correct and we will continue to do so.
There is another agent (group of agents) in this game and that's other states. Those states are often modeled as passive background places one can move to, but they are often not. They can, and do, react to tax laws in other states. For example, TX could encourage capital flight by offering tax breaks.
I've seen this happen with some companies in Midwest: as the states had to raise taxes some Southern states decide to poach individual companies and offered them to move their HQs there with a bunch of tax rebates and credits and such.
> The tax’s designers, however, think they’ve come up with a clever solution to capital flight: a one-off tax that is retroactive, based on a billionaire’s residency status on January 1, 2026.
That is pretty clever. They could also have an "exit tax" -- "leave but if you've been here for 10 years making your billions, we'll keep some of those billions" kind of a deal.
> Four Norwegian entrepreneurs have commissioned yours truly, Dr. Laura Melusine Baudenbacher and Professor Dr. Dr. Mads Andenas to write a comparative law study on the Norwegian wealth tax. This report will be the basis for a class action against the Norwegian state.
I assume the fact it’s submitted to a court will dissuade the authors from making totally unsubstantiated claims, but it still seems like there’s a strong financial incentive for them to reach negative conclusions about the tax.
The loss of the richest man in the village might mean the baker now has to kowtow his prices to his less well-to-do neighbours again
That said I wish we would take a look at spending before we just keep raising taxes and then a year later saying "how are we gonna get even more money?". California has an insane amount of wealth per person and one of the highest state tax rates. Can they really not figure out how to operate with their current budget?
https://worldpopulationreview.com/country-rankings/happiest-...
Extending their taxation or economic system to a larger, more populous, diverse, and economically fractured society would lose most of the reasons they're succeeding.
Unfortunately for California about 40% of the total state income tax collected (which accounts for about 65% of the state general fund) is paid by the top 1% of income earners -- which includes those 0.001% who will be motivated to move by a wealth tax (or even merely the threat of one).
The <0.001% number appears to be based on population _before_ several billionaires moved out before Jan 1, 2026 - likely at least partially motivated by the small, but real, risk of the "billionaire's tax" qualifying for the ballot and passing (and that proposed tax is only "temporary" and is only a total of 5% over three years so isn't nearly as alarming to the wealthy as a "permanent" tax would be). If it looks like this measure will end up on the ballot and have a chance of passing, expect many more to leave. This will, even if it does not ultimately pass, erode the income tax base.
California has rebelled against wealth taxes in the past - most notably by the passage of Prop 13 almost 50 years ago (a property tax is a wealth tax). They are not popular except when the hit "the other guy" -- but "the other guy" is the one most able to avoid the tax.
Wealthy people are typically very flexible as to where they live. They often already own multiple homes and often spend a lot of time out of the state they "live" in. When they move, they are not packing and labeling their own boxes or are likely even present on "moving day". They also are more likely to set up HQ and shop near where they spend a lot of their time. Even if they have family in California, they can still get together with them for Thanksgiving dinner -- either by flying the family to them on their private and chartered jets or by themselves flying to California for the weekend on one of their jets. They can conduct most business very efficiently remotely and often do so now to a significant extent.
It only takes a few to leave to tank the California budget - likely causing the progressive income and wealth taxes to reach deeper and deeper into the upper middle classes as California desperately tries to balance their budget without cutting yet more programs.
Other states are loving this though and will cut tax deals to attract these very billionaires that California are encouraging to leave.
That misses the point. A one-time wealth tax to plug holes in the state's finances reeks of short-termism and desperation, like Chicago selling off its parking meters. Even if I wasn't affected by the tax, I'd be alarmed at the implication. It would have been much better to implement a well thought out and orderly recurring tax on capital gains or whatever.
No matter how you tax, the asset-owning class is almost guaranteed to remain in place, because the vast majority of their assets are physical, and cannot be easily moved except at much greater expense than any tax.
I mean, if offshoring took 75 years to achieve, what makes you think that any member of the Parasite Class will be able to pack up and leave within a decade, much less a half decade?
It costs ridiculously insane amounts of money to move a business down the street, and you’re keeping the same employees, and not re-training an entirely new batch of replacements in the new location.
About the only “asset” that can “leave” with anything approaching sub-decade immediacy are the purely digital ones, with a business that is 100% Internet-based and without any physical assets of any kind, where you can spin up a new offshore server and migrate the services to it with just a few mouse clicks.
And those are vanishingly few in number. Most so-called “Internet companies” still have oodles of physical assets, from offices (where return-to-office mandates force employees back into) to land to physical servers sitting in data centres.
And in the end, we have the most telling question: what is the difference with the wealthy leaving due to a tax, and failing to implement that tax in the first place?
NOTHING.
There are no downsides, only upsides. Either they leave and open up room for another entrepreneur to thrive in that spot, or they stay and pay the tax.
Either way, nothing of value is lost by wealth taxation.
He's still here, and unlike the PAB SV billionaires, he has no plans to leave because he's seen what places with no/low taxes are like. (TLDR: they have low taxes because nobody would want to live there otherwise. )
https://www.peoplespolicyproject.org/2025/11/17/do-millionai...
People are mad about buy-borrow-die, so they’re proposing extraordinary new measures.
Personally, I’d just make capital gains taxes apply at the “borrow” stage to actually fix the problem. That would have a host of compliance issues but they’d be localized in the finance industry which already has an army of people figuring out compliance.
But that is usually a fairly large group, and if they feel taxes are too much, they will listen to any politician that promises a solution.
Then it can become pretty nasty...
Case study: New York City, United Kingdom, France, Germany, Denmark…
The list goes on until they choose; Texas, Florida, Singapore and Dubai.
To control for this look at NYC's share of the nation's millionaires, which shrank from 6.5% in 2010 to 4.2% in 2022.
https://cbcny.org/research/hidden-cost-new-yorks-shrinking-m...
I think taxes still handily win with room to spare. Even more: plenty of those rich people are still in NY and participating in its economy (legal residence != where you actually physically live, especially if you have resources to game residence by owning multiple properties).
[1]: https://dor.wa.gov/taxes-rates/other-taxes/capital-gains-tax
[2]: https://finance.yahoo.com/news/jeff-bezos-moved-florida-impa...
https://www.asanet.org/wp-content/uploads/attach/journals/ju...
[0] https://www.forthcapital.com/uk/articles/2025-wealth-migrati...
[1] https://www.henleyglobal.com/publications/henley-private-wea...
We have already tried that in human history, it's called communism. No one is allowed to take private profit, everyone contributes to the best of their own ability, and everyone consumes according to their needs. It should be utopia because there is no wealth gap and wealth is maximally redistributed. Which is exactly what taxation is designed to do, only to the most extreme.
And I think everyone will agree with me that communism is a miserable failure. The rich may not leave physically but mentally they are checkout -- not willing to work as hard or take as much risk. So the answer is yes, if you tax them, most certainly they will leave physically for haven with lower tax, all things being equalled. Or leave mentally.
But not all things are equalled, so you can still tax them at a somewhat higher rate provided that you can provide other incentives. But still, too much tax will make it more likely for those who are able to to leave. This is almost an axiom.
Just because someone has "communism" on paper doesn't mean the society actually functions according to the communist idea.
Social democracy has been tried in many places and it has produced things such as the Nordic Model and the Nordic states that have been very successful.
After the 2nd World War USA was very close to socialism. High wealth taxes, workers unions etc. As a result your average worker had a lot of purchasing power which of course fuels economic strength.
In fact many if the world's best performing companies are a kind of exercise in socialism since the RSU programs share ownership and results of the company to the workers (even if it's a small share)
Capitalism's final form is a dystopian hellscape of rivers that can be lit on fire, unbreathable air, leaded gasoline, asbestos ceilings, company towns paying scrip, strike break private militias, opioid epidemics (wild this isn't a one time thing for Capitalism, but then the model for Capitalism seems to endpoint with getting people addicted to the product).
Everyone can agree pure Capitalism is a miserable failure that creates an unsafe environment and product landscape based on addictiveness. Time after time when left to their own choice, Capitalists chose making a worse world. The Capitalism model requires tight constraints from society to prevent Capitalists from creating an horrific, awful world like they have every time in the past when left unregulated.
The question is why do we make sure Capitalism can't destroy our rivers anymore, or pay workers in scrip (creating their end goal ideal of an inescapable labor system) but when they economically destroy the civil fabric with unequal wealth distribution we somehow refuse to step in? Capitalists long term will NEVER chose societal benefit, yet somehow we keep hoping they will and under regulating them. I remember when extremely liberal friends started getting their vested options and them excitedly talking about the whole loan model to not have to pay taxes, even though they 'supported' high taxes and knew the societal benefit.
People are always defending rich people (capital owners) that they invest their wealth. But actually if someone has a billion in the bank the fact that they have that billion is a proof that they didn't invest it. (If they did spend it or invest it the would not have it, now would they?)
A billion that circulates in the economy is much better than a billion that sits in someones bank account. Someone who spends 100% of their income is much better economic citizen than someone who doesn't.
This is still not a good idea for you, as the interest doesn't make up for inflation. Most people keep a small portion of their wealth in the bank, as easy access for emergencies (this is called dry powder[0]). The rest is typically invested into private equity, which allows new ventures to be created.
It's very rare for anyone to have more than $50m in the bank. The money is usually out in the market doing it's work.
This is the trickle up economy where the few people at the top suction all the wealth to themselves. And the rate at which they acquire it exceeds the rate at which they spend it.
I would hesitate to call consumption "better" than investment.
The health of an economy is defined by the permeability of the border between those two classes, and the direction of flow.
If the flow is mostly one way, you're getting wealth extraction, not investment.
But assets are not easy to move. So if you tax assets and not income, it doesn't matter where the owners are. It only matters where the assets are.
1) velocity of money matters, some spending creates more economic activity than others due to re-spending.
2) Investment is not the same as having your money sitting idle. Investment makes certain activities possible because of scale, payment made with the expectation of future value, financing capital goods or R&D, etc.
Long term: yes, especially if you combine really high taxes in the 40+% range with consistently rubbish public services
But the real question is not whether people will leave, the question is how many talented hard working people chose not to move to your country in the first place because your taxes were too high. It won't show up in any data, you'll just experience worse economic growth and have to tax everyone else more
That would still be considered a fair and reasonable level of tax by european standards.
Obviously there is a level though - if you made it 95% then people would leave. I don't think there's any reasonable argument that the level doesn't exist, the question is where is it for a specific place at a specific time
You could say "well good riddance" but taxing $10mn of income at 20% raises a lot more useful money than taxing $0 of income at 95%
To my mind it's a revenue maximizing question. Is Massachusetts hitting that metric right? I have no clue. I do suspect that the voters and the people advocating taxes like this in Massachusetts and California are not thinking in those terms. I think they are doing this out of some sense that anyone making that much has to be doing something unfair and that an inefficiency in revenue is just money spent towards fixing that unfairness.
I'm happy to concede Massachusetts may very well have found the right balance, but there's plenty of studies on this in aggregate.
There's unsurprisingly a modest but statistically significant migration of millionaires from high-tax to low-tax jurisdictions.
https://www.asanet.org/wp-content/uploads/attach/journals/ju...
There is a disrupt joke inthere but i cant think of it right now.