(Just an objective comment, I'm not positioning here) this honestly puts the "tax the rich more" in perspective. A tiny tax increment to the rightmost column would provide more money than 100 years of all the other pitiful contributions together.
So let's say you start taxing the ultra-wealthy based on their assets. They then have the option of:
1) Make the company pay out dividends, so that owners can afford to pay their wealth tax. Not ideal, because what happens during bad years where there's no dividends to be paid out? Or if companies want to re-invest in the company?
2) Sell stocks. Again, not ideal. This would mean that you lose some ownership year by year.
3) Take up personal loans to cover taxes.
etc.
Note, I'm NOT saying that we shouldn't do anything. But this is just the consequence of such assets (stocks) being the dominant asset among the wealthy.
Having hordes of people in poverty while we bend over backwards to not inconvenience the rich with "selling stocks" to pay taxes".
Wealth taxation cannot redistribute the kind of wealth we care about most. At least not by itself.
You need someone to buy the stocks in exchange for labor. So you need to keep the stocks themselves valuable.
As an extreme example, if you'd just take away all the SpaceX and Tesla stock from all shareholders and redistribute them, they would probably be near worthless because you just demonstrated that their value is more or less random.
I think that wealth taxation will only work if you give ironclad guarantees that people that are merely rich or middle-class will never be subject to it. If you can show that a stock is more valuable to, say, a medical doctor, then to the CEO of a hyperscaler, you might have a working system.
If large fortunes keep doing 5-7% per year compounding, outpacing the avg. growth rate of economy, wages etc. then we keep ending up with Musk-like figures with such outsized amounts of power and influence that it basically destabilizes democracy altogether.
You can't get rid of these people because they just have too much influence -- i mean, literally buying entire social media platforms. C'mon.
Its really just a question about whether you want society to continue functioning with some semblance of fairness and stability.
But I think it's orders of magnitudes below what their wealth number suggests. For instance, I don't believe that Elon Musk uses hundreds of square kilometers of living space (US average is 66m², scaling by wealth would give Elon hundreds of square kilometers). Same holds for food, heating, medicine, etc.
Edit: Again, stocks are not financial Assets.
Work hard, so that the government can redistribute your success?
Or you have the problem of businesses slowly losing their owners, who then stop caring about their clients or community.
What is the result of these taxes? Where does the money go? Does it lead to more economic activity or less?
You understand that billionaires don't make money from labor right? They get their money from rents and the return on capital. Roughly 5-7% per year, compounding, risk free, for perpetuity.
Why take on a job when you have to pay income tax? Because you'll still have much more left over than if you didn't. And this answers your question: because you'll still have much more left over than if you didn't start a business.
I'm on disability, and if I make over $1000 a month, anything over $1000 gets taxed at 75%.
Do you think I work enough to make over $1000 a month? Do you think I'd scrub toilets for $20 per hour and take home only $5?
Hint: after $1000, I either get paid cash or don't work
Amazingly, people still start businesses.
If you tax stocks, the rich will have no incentive to keep their money locked-in. They will encash and exit to a jurisdiction that allows them to invest their proceeds into stocks again. Lets assume a hypothetical scenario where all jurisdictions impose a tax on stocks. Then they'll retire by investing in assets or heck just keep it in their banks.
What you are asking for won't work in a capitalist society (which is pretty much every society on Earth). The only way out is UBI.
We cannot claim to live in a democracy while Elon Musk gets to decide whether our allies can use communications or close down entire branches of government.
There's many other solutions you gloss over, from capital controls for the more near-term issue to moving past capitalism for the more long-term systemic fix.
You dont need incentives for the rich. You can just pass laws limiting their options.
> We cannot claim to live in a democracy while Elon Musk gets to decide whether our allies can use communications or close down entire branches of government.
This can be fixed with laws around lobbying.
> capital controls for the more near-term issue
Capital controls won't solve much because it is a one time exit tax that stakeholders have to pay to move out of the jurisdiction taxing stocks. Those who cannot move will shutdown their companies and invest those proceeds into assets, typically immovable (like land/houses etc), which will drive housing prices up. It has cascading effects that affect the economy in a different way.
This causes displacement of those who cannot afford housing, which will incentivize the rich outside the jurisdiction to buy up assets and then that causes a change in voting structures. The rich can then vote their candidate who will reverse capital controls. Or maybe they won't and keep it that way so they have their own gated society so to speak with no entry for those who cannot afford to be there. You can already see it happening in few places in the World where such controls exist.
> You dont need incentives for the rich. You can just pass laws limiting their options.
You are missing the point. The incentives are for everyone who want to give it a shot at trying to take their idea, implement a vision and then execute on it. Does not mean they will succeed. The tiny percentage who do succeed end up becoming rich. See the number of startups that succeed vs those that failed. You are not disincentivizing the rich by imposing wealth tax. You are disincentivizing the average Joe who wants a shot at making it.
> This can be fixed with laws around lobbying.
No it can't, and lobbying has nothing to do with the problem of one guy being the petty autocrat on top of his empire rivaling democratic states.
> Capital controls won't solve much because it is a one time exit tax that stakeholders have to pay to move out of the jurisdiction taxing stocks.
Who said that? You've defined your own narrow version of capital controls to then argue against. States could just ban moving capital out of the country. Countries can just pass laws! They don't need to do whatever makes rich people happy.
> You are missing the point. The incentives are for everyone who want to give it a shot at trying to take their idea, implement a vision and then execute on it.
You are missing the point. People do all sorts of stuff for all sorts of reasons. Many companies are founded because somebody saw a real issue and wanted to fix it. Others are founded because somebody found a loophole or a way to extract capital by moving some numbers around or monopolizing something others need.
I would posit that if the only reason somebody opens a company is greed, then maybe that company would be a net-negative for society anyways?
If capital cannot be taken out of country then it can be put in assets mate. I have explained that scenario already.
> If a few dudes control most productive forces, that is inherently antidemocratic. No amount of trying to pay off the public with some elaborate scheme that doesn't remove their control will fix that.
Then have more dudes controlling most productive forces. You have anti-monopoly and antitrust laws for that exact reason.
> If the only reason somebody opens a company is greed, then maybe that company would be a net-negative for society anyways?
It is not greed. Money is a by-product of success and follows success wherever it goes. You cannot dissociate the two.
> Of course UBI is an allowance. You can't just say it isn't without making an argument
It really isn't. It is the same argument as utilities. You individually haven't paid the full amount for construction of road network, bridges, electric grid yet you don't consider it an "allowance" do you? You believe you have contributed your fair share. Yet you still enjoy these utilities wherever you are and for life by only paying for how much you use it. UBI is the exact same thing. Instead of giving you in the form of utilities, you are getting money which you will reinvest back into the economy by choosing what and from whom to buy. Both are assets being dispersed by the Government.
What untaxed assets would those be? Are you saying the bank interest would be higher than other investments minus tax?
I am having trouble following your argument to your last conclusion.
> Are you saying the bank interest would be higher than other investments minus tax?
It absolutely will. When you tax stocks, you are eroding its value. Why would anyone want to continue to keep their wealth in stocks when they could just cash out and not lose any of that value?
> And I don't have the option to sell partial shares of it
Sure. But you can always rent it out and move to a smaller rental. And it is a good thing you cannot sell partial shares of it. You shouldn't. Imagine selling partial shares/stocks every time you have to pay tax on stocks. You will end up with nothing in a few years.
This is not a universal truth.
> Rent collected can easily be used to offset property tax on the asset. Now you cannot collect rent on stocks
You actually can, it's called securities lending.
> So the only way to pay tax on stock value (which is assessed by a valuer at that particular point in time) is by either paying it out of personal pocket, taking a loan or selling the stock. None of those options are feasible.
1) Why not. 2) Sounds like someone needs an income (which is already taxed and would have solved much of the tax avoidance).
> It absolutely will. When you tax stocks, you are eroding its value. Why would anyone want to continue to keep their wealth in stocks when they could just cash out and not lose any of that value?
A lesser gain is not a loss.
You cannot do that with private companies. It is only restricted to public securities. And even these are not owner/investor stocks (which are locked for a certain period after company goes public via IPO). These are typically fresh stocks issued before company goes public.
> This is not a universal truth.
What is the evidence for it working otherwise? Every Country that has tried Wealth Tax has rolled it back.
> A lesser gain is not a loss.
It is not a capital gains tax (which already exists). Wealth tax is a tax on unrealized gains. It definitely leads to erosion of stock value.
> 1) Why not. 2) Sounds like someone needs an income (which is already taxed and would have solved much of the tax avoidance).
You have just encountered a classic Catch-22 here. Without income, you cannot pay tax. Without paying tax, you have no revenue and hence no income.
Both Norway and Switzerland has a wealth tax still. The only reason other countries rolled it back was just a bidding war for perceived investments, in other words tragedy of the commons.
> It is not a capital gains tax (which already exists). Wealth tax is a tax on unrealized gains. It definitely leads to erosion of stock value.
If you're holding stocks that never increase in value, I don't think this is a credible assumption.
> You have just encountered a classic Catch-22 here. Without income, you cannot pay tax. Without paying tax, you have no revenue and hence no income.
No, I'm indicating that the avoidance of an income is specifically to avoid tax, not because of an inability to produce an income.
Then you are not making any income. You have a locked investment that is not performing. So why should you be taxed for that? If anything, you are losing by keeping the investment locked. Even opening a fixed-deposit in the bank will get you from 2% to 15% depending on your location. Money not growing or in circulation is dead money.
By the way, that investment was only possible if it had already been taxed in the first place. You don't get a million dollars to invest in some stocks without it being income that was already taxed. No one is giving free money here.
> No, I'm indicating that the avoidance of an income is specifically to avoid tax, not because of an inability to produce an income.
Can you explain with a concrete example? What you are saying here is not making any sense to me.
> Both Norway and Switzerland has a wealth tax still. The only reason other countries rolled it back was just a bidding war for perceived investments, in other words tragedy of the commons.
Both have really tiny % (0.65% to 0.75% in Norway and 0.1% to 1% in Switzerland) which is what I explained here as well: https://news.ycombinator.com/item?id=50275757
If you are charging that low wealth tax might as well just increase corporate tax as you will get much more revenue that way.
In fact, the revenue generated by wealth tax was so less that Switzerland tried to introduce a really draconian wealth tax that was rejected by the voters just last year: https://finance.yahoo.com/news/switzerland-rejects-50pc-weal...
If you impose a wealth tax on this, which side are you imposing it on? Company or individual investor in the company? You cannot impose a tax on what is technically a liability on the company's books. So you would have to impose on the individual investor. Lets try with an example: assume the wealth tax is 10%. Lets also assume I hold 5 million common stock, pre-seed, in a startup I founded (45% equity). How would the stock be valued? It should be zero. So I pay zero wealth tax. Then I get an investor onboard, who invests say $1 million at 10%, valuing the company at $10 million. Lets assume, because of this capital infusion, my equity gets diluted to 40%. That means I am on paper worth $4 million. I immediately owe 10% of it or $400,000 to tax authorities. Without having made a single cent in revenue. My co-founder would also owe $400,000. We have no money of our own except to use the investment money to pay the taxes. That is $400,000 + $400,000 = $800,000. We are left with only $200,000 in the bank. Before we even started the company.
You might say 10% is too much. Lets reduce the wealth tax to say 1%. Or even 0.1%. Then the entire idea becomes meaningless. Might as well just charge extra corporate tax.
No more of this "cheap to be rich" crap, they can pay same as everyone else who doesnt have a choice, join us Great Unwashed
I'll get hate from some corners on this, but I'm coming to see the wisdom in not significantly increasing the tax rate on the rich, but instead broadening the tax base. For example, count tricks like borrow, spend, die as cash; make stock buybacks illegal; treat compensation in the form of assets as cash income at the valuation price when the transfer happens; count inheritances above $X million as income, cash income.
Wealth concentration is a problem because wealth concentration is power concentration.
Why should a few dudes have autocratic control of entire industries?
If you force them to sell off their stakes over time through a wealth tax, you make the economy more democratic.
"Taxing the rich" is literally solving the thing that is a problem today.
What's the problem? It's not like you'll have to sell over 50%. Even then the are schemes for non-voting shares. But when close to 1% of population works for Amazon, maybe forced sharing of ownership isn't a bad idea.
Isn't that exactly what we are trying to achieve by re-distributing the wealth, and avoiding that few people have such huge ownership that they have more power than governments ?
We are still living in a middle-age system, where the lords don't own lands but stocks and companies, but they still dictate the laws.
Besides any argument about fairness, wealth inequality is highly destabilizing and historically has only been corrected by revolutions, wars, crises etc.
If a few billionaires need to sell stocks to avoid such an outcome, that seems quite desirable to me.
What I like about it is that it doesn’t penalize people who already pay taxes. It’s a lower bound, not an extra.
What makes me weary about any such tax is that in practice, it seems to target the broad middle class - people who have enough assets to be interesting to the tax man, but who don’t have enough to hide it or avoid taxes.
If you're talking about the "Zucman tax" it explicitely targets the ultra-high-net-worth individuals because that's the population that manages to avoid income tax and thus pay a lower effective tax rate than the rest of the population.
Still my concern would be that the other Zuck would show he has no income and no assets, while a doctor or coder would end up paying extra tax on their retirement savings.
I think there’s really only a few solutions to it which all involve some kind of divestiture, it just depends on if you want to target corporations or individuals:
1) a new wave of anti-trust ala Lina Khan and breaking up most major tech companies.
2) passing laws limiting the behavior of, and allowing for the punishment of corporations and group agents as a whole. There’s a lot of philosophical work about how to hold a group accountable for their actions, try searching List and Pettit Group Agency. There’s been a lot of development since then but I’m less aware of it.
3. Caps on decision making power (potentially measured via some weighted stock ownership, or wealth more generally) like suggested above. I agree there would be a lot of second order effects here which are beyond the scope of this comment but I think we’ve clearly gone too far in one direction where single individuals are now essentially funding national party midterms, have increasing power over real world conflicts, and any other of the myriad of corruption issues you can find out in the wild.
Honestly, there isn't a clean solution to this problem- or at least none that doesn't come with unpredictable consequences. I think everyone can agree that companies growing too large inevitably become harmful for the society they're enabled by, but there are no previously established solution we can reach for... And every decision you can make will have trade-offs. Also, were pretty late game into free market capitalism. Any changes to the status quo will dis-/advantage someone, and they will utilize the tools available to them to stop you. So such deep cutting changes are beyond unlikely without first descending into complete chaos. Which would likely be worse for the majority of people...
In reality majority of billionaires are in industries and companies that does not even remotely have the same benefits or power.
Why is it normal that regular people would have to sell their homes just to have a prayer of paying their minimum nut but its aways "muh unrealized stocks" when it comes to billiionaires?
Why should they be exempt from a propoetionate burden to pay the societys on a from whom they are fundamentally predicated to be feasible?
Because that is not normal and shouldn't happen either. And I dont understand why this is used as an example.
I dont expect normal people to have to sell their stock. Nor do I believe in tax on asset for anyone. Capital Gain Tax should just be Income tax.
I would believe this if you had started fighting existing property taxes first and waited until you have finished that job before trying to prevent non-existent asset taxation.
> I dont expect normal people to have to sell their stock.
Selling stock isn't abnormal, it's done every day. More importantly, people don't have to sell stocks to pay taxes, instead they could use dividends or part of the income they normally use for buying more stocks. The current obsession with growth stocks is part of the problem.
> Capital Gain Tax should just be Income tax.
I wish a good economy could be built without any asset/property taxes but I don't think that's possible. As with everything else, asset taxes can be quite harmful if implemented the wrong way, but that's a different conversation.
How is that not the obvious comeback to the argument "wealth is stocks so we can't tax it"? Is there an obvious downside?
The first option guaranties that you don't pay more in taxes than you earn on the stocks, and the later has higher risk vs reward. For some reasons, the later seems to be the most popular choice, despite the risk that the owner need to cover the cost of taxes regardless of what happens in the stock market.
https://www.forbes.com/sites/teresaghilarducci/2025/12/29/do...
A better way to look at this data is the sum of wealth for each percentile (https://www.federalreserve.gov/releases/z1/dataviz/dfa/distr...) The top 10% (90-99%, ~$67T, >= ~$2M in net worth) owns more than the top 1% (99%+, ~$60T, >= ~$15M in net worth). The top 0.1% own ~$27T.
Any yearly tax that exceeds the "4% rule" will essentially be confiscatory, so let's say that a tax of 1% won't bring out the pitchforks (is that tiny?) On the top 0.1%, that generates about $0.27 T compared to 2026 Federal collection of about $5.2T (on a deficit of about ~$2T) https://www.us-debt-clock.com/data/deficit-by-year
As I pointed out in a comment about solar power in another thread, if that money was spent on installing solar+battery, in about 5-10 years we could have more or less converted the US grid with a 1% wealth tax on the 0.1%. Of course, we could also reverse the recent (2016 and beyond) tax cuts as well, which would help fix the giant gaping hole in the US budget. The stock market would probably take a hit, reducing the wealth of the top whatever by far more than a small tax would.
Many will say that the purpose of this tax isn't just to raise revenue for the US government, but to reduce power of the most wealthy. I personally think that taxing wealth is not going to be effective for doing this, without passing laws that limit the effect of wealth in US politics.
If someone is just rich on paper no point in taxing it.
Tax when they spend.
Another thing is to force the wealthy to diversify into low return assets. They perhaps will figure out how to make it high returns and grow the overall wealth of the society.
Why couldn't there a wealth ceiling? Let's take $1B per person, everything above that is taxed at 100%. Would it destroy the capitalist dream and people would lose motivation to grow their wealth, or would it stimulate cooperation and wealth distribution?
But yes. Something like that.
Because while some can be transferred into something that is partially worker-owned, not all workers are suited to be given that sort of leverage.
So that might be worth pondering to come up with a solution that makes stuff not collapse. Because the reality of human resources is that the quality is underwhelming.
Frankly, I can't think of a fairer way for a company to be guided. If we choose, we can vote to hire (shudder) Elon Musk to run our company - or someone actually competent and trustworthy, from outside the employee pool.
By our charter, no one may own more than 1% of our total stock. Our collective decisions - effectively democratic representation, like the US - help decide our success. Demogoguery is almost impossible (unlike the US). Every worker is vested to some degree in our success, thanks to stock gift policies (and of course we can choose to buy more stock than that low level).
But, to put my previous point more bluntly, if you do this, you cannot hire idiots, because they otherwise start ruining everything.
Someone needs to hire idiots though, which is why this concept cannot work for all.
The alternative to that is idiot removal, however, that has proven to be a rather complex ethics problem where we've collectively rightfully decided that it is so radioactive, we will no longer entertain such thoughts.
My point is that with such a wealth cap, we will get some co-ops, but we also will have to get something else. And I have not yet found an idea what that could be
In the US, the top federal rate was around 90% through the 1940s and early 1960s, then 70% through the 1970s.
https://taxpolicycenter.org/briefing-book/how-do-federal-inc...
https://taxfoundation.org/data/all/federal/taxes-on-the-rich...
I found this footnote particularly interesting:
It is worth noting that, per the Piketty, Saez, and Zucman data, the tax rates of the top 0.1 and 0.01 percent of taxpayers have dropped substantially since the 1950s. The average tax rate on the 0.1 percent highest-income Americans was 50.6 percent in the 1950s, compared to 39.8 percent today. The average tax rate on the top 0.01 percent was 55.3 percent in the 1950s, compared to 40.8 percent today.
Note that those percentages include Federal, state, and local taxes.
It is no surprise to me that an organization originally founded by the chairman of General Motors, the president of Standard Oil and their like [0] is able to conclude:
>"The top 1 percent of Americans today do not face an unusually low tax burden, by historical standards."
Which is a wild claim to make.
Nice that you find the somewhat honest footnote, but you're citing what is essentially an opinion piece from a conservative think tank.
And no, you didn't specifically say effective tax rate, but you did say that western countries effectively had a cap on how much you could earn (presumably that's what you meant, even though we're talking about a wealth tax here, not an income tax, but I digress), given a top marginal rate near 100%, but that's simply false, given that the effective tax rate even for the absolute most wealthy Americans was closer to 50%.
It's a little like complaining that university has gotten so expensive by just looking at the sticker price, while ignoring the fact that few people actually pay that, and the median price actually paid is much lower. That doesn't mean the effective price is where it should be either, but you do your position no favors with falsehoods.
You called the fact I raised a "tired talking point" and referenced a contentious source. While they do cite serious academics, they seem to draw their own conclusions in the text; unburdened by their references.
It'd be interesting to do the same graph by real consumption. I bet it'd be much more equal - most of the wealth is tied up in systems that keep the country ticking over and are only providing paper benefits to the owner. Which is why I say "transparency" - once you track what happens in real terms, "taxing the rich" almost certainly becomes "everyone ends up with less". If you take real resources away from the person who owns the McDonald's ice cream machine in real terms I have a hard time seeing how it won't come out of the lifestyle of the dude buying icecream. The person getting the money wasn't consuming anything real.
Reality would like a word with you...
Tell me you've never met a modern Republican without telling me you've never met a Republican.
And it's not like taxes destroy wealth. Distributing from the person who owns the ice cream machine to the person buying ice cream puts the money in the hands of the person far more likely to spend it quickly. On ice cream, making the business case for owning ice cream machines better, not worse.
I mean, sure. The follow up thought is after that power has been taxed away then someone else is going to need to be taxed for the raw resources that are needed. If welfare checks start being paid out with intangible benefits it'll lead to loud complaints. That gets to the heart of the problem with taxing the people with truly enormous amounts of wealth, they mostly have power, which isn't much use to someone who needs food and shelter. The tax burden has fall somewhere in the logistics chain that produces the houses and the food (although maybe a long way upstream).
> Distributing from the person who owns the ice cream machine to the person buying ice cream puts the money in the hands of the person far more likely to spend it quickly
I'm not going to disagree with that, but I will point out that this is why they couldn't afford the ice cream machine in the first place. Consuming the seed corn is a road to eventually having no corn.
There is an economic optimum amount of ice cream production and there isn't any reason to believe it isn't being hit under the current system. It isn't obvious if the need is for more or less ice cream machines. Moving ownership of the machine around doesn't obviously change the amount of ice cream produced; and its owner isn't consuming the machine. But a wealth tax on the ultra-wealthy is pulling all those levers on the assumption that making random changes in ownership has to help. It probably won't.
The modern capitalistic system has devised many fabulous ways of enabling people to buy ice cream machines and seed corn without being able to afford it individually. Equity and loans are the two most obvious, there are many more.
That is the main reason that American capitalism has thrived. Because you don't have to be rich to buy ice cream machines.
The concentrated ownership results in graphs a lot like the one in the linked article.
Exactly. We should be taxing profit less and wealth more.
That's what it means to be poor. You have to eat first. You don't have the choice to not eat so you can save the cost for something else.
What you're describing is called "Trickle Down Economics", and has led to 50 years of economic failure.
If we're talking globally, Asia ain't failing. They're big on producing lots of real stuff. Minted a lot of new billionaires.
2. Your complaint seems to be "X is a bigger problem than Y, so Y is ignorable." Real life is not that binary. Both problems are significant.
Rough estimates for federal taxes
Top 0.1% Share of federal taxes ~10–12% Approx ~$550–650B
Bottom 50% Share of federal taxes ~10–13% Approx ~$520–680B
source : quick claude query
The top 1% pay about 38%. The top 0.1% is simply not a lot of people and not helpful for thinking about how much you can juice them in absolute dollar amounts.
Increase wages.
If you "fool" a hundred thousand individuals to work for a company on a wage and through their work the company ends up been valued at a billion, you become a billionaire. Wouldn't they deserve a bigger cut of the fruit of their labor?
The fastest way to distribute wealth isn't taxes on wealth, it's a better distribution of the wealth generated by labor on the contract that the employee signs.
A rich person can afford to split their wealth 10-ways, meaning they get a 20% ROI every year.
9/10 workers don't get shit, while one does.
What we want instead is everyone benefiting.
This is how taxes work. I'm not sure why you jumped from one extreme of the US to the other extreme of Cambodia, ignoring the quite normal end successful middle.
If government subsidies are the only reason Tesla exists, why did Aptera (v1) and Fisker fail? If SpaceX only exists because of government subsidies, why are Boeing and Lockheed Martin (owners of ULA) worth so much less than SpaceX?
Could also take dividends, that would be more of a tax on the company itself which is what people usually object to in this discussion. Now the company basically can't grow as fast because it has to satisfy the tax burden for the owner. But that's a choice the owner makes.
That probably seemed more coherent before you put it into words.