r/NoStupidQuestions • u/Discontitulated • 1d ago
Governments say they can't tax the super wealthy more because they'll just leave the country but has any first world country tried it in the last 50 years?
It would be interesting to see how raising taxes on the super wealthy actually affected a first world country's tax revenue and economy.
Are our first world economies really so fragile the rely on the super wealthy and their meager tax revenue?
1.7k
u/sourcreamus 1d ago
12 European countries had a wealth tax in 1990 and 9 repealed them since. From this story
“ In 1990, twelve countries in Europe had a wealth tax. Today, there are only three: Norway, Spain, and Switzerland. According to reports by the OECD and others, there were some clear themes with the policy: it was expensive to administer, it was hard on people with lots of assets but little cash, it distorted saving and investment decisions, it pushed the rich and their money out of the taxing countries—and, perhaps worst of all, it didn’t raise much revenue.”
579
u/MailMeAmazonVouchers 22h ago
And Spain's wealth tax is fairly useless. It hits people with a lot of cash influx really hard, but barely affects the super rich that have all of their money on real estate.
Anyone rich enough here just has all of their assets under a LLC's name or just invested on real estate. The wealth tax ends up making the middle class and upper middle class pay more than the working class but that's about it. The super rich don't give a fuck. They can pay for lawyers to find loopholes.
→ More replies62
u/DangKilla 20h ago
I looked at Spain, though and only saw one billionaire, the founder of Zara. The laws must be somewhat more effective than the other Euro countries I looked at.
89
u/ToWriteAMystery 20h ago
Are they the only Spanish person who is a billionaire or the only Spanish resident?
143
u/MailMeAmazonVouchers 19h ago
It's the second one.
All of them simply have their residence on Andorra or Monaco.
34
85
u/MailMeAmazonVouchers 19h ago
Spanish billionares have their residence on Andorra, a tiny country located on mainland Spain, where there's almost no tax.
Amancio Ortega is a known exception to that, he has literaly fuck you money and is known for being a philantropist.
→ More replies→ More replies14
u/wannabe-physicist 19h ago
Look at the rest of the Spanish population. Salaries are low and youth unemployment is high.
→ More replies→ More replies97
u/Gyrgir 20h ago
In addition to the three countries listed in the article, the Netherlands also have something that functions like a wealth tax.
Their income tax system, instead of taxing realized investment gains like most countries, instead assumes a 4% rate of return on financial assets and taxes that as income. At a 30% tax rate, that is equivalent to a 1.2% wealth tax.
99
u/rws247 19h ago
This was actually struck down by the courts two years ago. The assumed 4% rate of return was found unconstitutional.
This was quite disappointing, because the Dutch system was simple to administer and the assumed gains fo 4% were less than the actual gains most years.
But a group of people sued because they didn't invest their money, but put it in a savings account in the bank. Their actual gain were lower than 4%, so their argument was that they were taxed unfairly. The courts agreed, struck down that law, and the goverment is still figuring out the replacement. Knowing the current government, it will be terrible or they'll procrastinate on it till the government falls.→ More replies7
u/elporsche 11h ago
The assumed 4% rate of return
This is wrong: the assumed rate of return for capital other than debt instruments or savings, was 5,39% in 2017 and increased to 6,17% in 2023 source
the assumed gains fo 4% were less than the actual gains most years
This may be true for savings in recent years, but the phenomenon of savings accounts offering >2% is very recent. Because the ECB held interest rates low before COVID, most banks didn't offer any savings instruments that offered beyond 0,5%.
And with ths 6% fictional rate of return, you can have trouble finding investments that net you more than that. r/geldzaken is full of stories where the fictional rate of return was way too high when compared to the actual earnings most individuals can find in capital investments.
→ More replies38
u/gastro_psychic 20h ago
But if someone owns stock and the market is down that year they might need to sell some of their stocks (like ASML) to pay this tax. That is depressing.
→ More replies
2.1k
u/TapestryMobile 1d ago edited 1d ago
Super-rich abandoning Norway at record rate as wealth tax rises slightly
A record number of super-rich Norwegians are abandoning Norway for low-tax countries... Ole Gjems-Onstad, a professor emeritus at the Norwegian Business School, said he estimated that those who had left the country had a combined fortune of at least NOK 600bn.
Why Norway’s Wealth Tax Failed
But things didn’t go as planned. Instead of boosting tax income, Norway faced an economic backlash that left them with $500 million less in revenue.
1.1k
u/Zombiesus 23h ago
They simply forgot to tax the exportation of money.
662
u/Medical-Response-142 23h ago
As if the super rich just have money on a local bank account. Don't be naive.
529
u/Elkenrod Neutrality and Understanding 23h ago
People always act like these people just have some sort of Scrooge McDuck style vault with all their money in it. Their net worth is tied to stock prices and assets, not some sort of liquid capital. A stock is not a liquid asset that you can tax.
688
u/hutch2522 23h ago edited 20h ago
That's why we need to make using collateral a taxable event. If someone uses stock as collateral in a loan, the value needs to be assessed and taxes are due on any gains at that point in time. For the inevitable "what about house mortgages", it's super simple to make primary residences exempt. We do it now for capital gains on selling a primary residence.
This is the loophole that needs to be closed. The super rich don't care about having liquid assets because they can just take loans to live off of based on their wealth.
[edit] I can’t respond to everyone that isn’t informed on how the ultra wealthy avoid taxes. Here’s a good read on the subject.
235
u/ElectricalAlfalfa841 23h ago
It's so logical, and it's so easy to do. Yet most people who talk about taxing the rich really don't understand how their money works. They are in a different system than the rest of the country
→ More replies93
u/jgzman 22h ago
Yet most people who talk about taxing the rich really don't understand how their money works.
No, I don't understand it. But I don't understand a lot of things that I expect the government to do. They can and should hire experts, and listen to their advice.
70
u/TurbulentFee7995 21h ago
Here on the UK, some 20ish years ago there was a scandal where the government paid a super influential financial form to help them write their taxes to close loop holes etc. The day after the tax system was in place the same firm published advice to it's investors and clients on how to take advantage of loopholes in the new system. The system they wrote, with loopholes and exploits they created.
The experts are already in the pockets of people who will pay them more than any government can afford to pay.
→ More replies38
u/taxinomics 21h ago
This sort of thing happens all the time in the U.S.
Tax legislation is proposed.
Tax experts explain to legislators all of the problems with the legislation as-is, how they would advise clients if it were implemented, and exactly how the problems can be fixed.
Special interest groups shower the legislators with money to ignore the tax experts and enact the legislation as-is.
The legislation is enacted as-is, with all the holes the special interest groups paid for.
The tax experts do exactly what they told legislators they would do if the legislation were enacted as-is.
→ More replies→ More replies9
u/Substantial_System66 17h ago
Fun fact: they do hire experts and listen to their advice. They are called the Internal Revenue Service and the Federal Reserve, both overseen by the Department of the Treasury.
The policies and advice on legislation have resulted in the world’s richest and one of the most effective economies in history.
I genuinely don’t understand how folks misunderstand the size and breadth of our government and its apparatus. Have you ever seen the Internal Revenue Code? It’s 75,000 pages long. It covers just about every way to tax earned income and assets and much more. They’ve thought of everything. Not all of it works and there are loopholes and contradictions, but it’s adjusted frequently. Congress considers laws that they advise on.
115
u/Scrum_Bag 22h ago
I'm quite conservative but actually agree with this. Fixing this and the borrow, repeat, die tax loophole (making assets tax basis not reset when transferred by inheritance) would fix quite a bit.
→ More replies52
u/cpg215 22h ago
This is the correct way to do it. Raising income tax will only affect high earners who still get a pay check, and a wealth tax is just way more complicated than it needs to be.
→ More replies55
u/hutch2522 22h ago
Blanket taxing unrealized gains is a terrible idea. We want to incentivize investing. This is the middle ground we need. Taking loans against capital is the loophole these rich pricks use to access their wealth without being taxed on it. Most do it under the guise of an “LLC” and the interest on the loan becomes tax deductible on top of it all.
→ More replies→ More replies9
u/Pristine-Frosting-20 22h ago
Would this affect my 401k
23
u/hutch2522 22h ago
Depends on how the law is written, but it seems reasonable to carve out an exemption for 401k loans seeing as how 401k’s have limited contributions to begin with and aren’t very useful to the very rich.
→ More replies14
u/steelhouse1 22h ago
It wouldn’t affect your 401k unless you took a loan out.
Or if you got a second mortgage on a residence or a home equity loan.
Basically a wealth loan tax would be against anything that uses an asset as collateral.
A lot of farmers would get hit hard.
→ More replies11
48
u/kemitche 22h ago
Stock is far more liquid than property, and we have property taxes.
We also have registration fees for vehicles, which are essentially another tax on an illiquid asset.
Wealth is taxable. There may be ramifications and side effects, but that doesn't mean it's impossible to do.
→ More replies→ More replies21
u/loopyspoopy 22h ago
My house isn't a liquid asset, I would have to put effort into selling it and the amount I get would be dictated by the market at any given time.
But I still get taxed on it.
→ More replies→ More replies57
u/numbersthen0987431 23h ago
But that's the problem
The rich people extrapolate resources from 1 area, and then export them to a location that benefits them, and in the process they are removing those resources from the community they are taking them from.
It's similar to how mining CEOs literally rip resources from the ground and ship them other places. Increasing their own wealth, but never living in the area that is losing those resources.
→ More replies72
u/Sanguinor-Exemplar 23h ago
Wait and see how much the value of your money drops if people can't freely pull out their money
→ More replies40
79
u/MistryMachine3 23h ago
Do you really think you know more about tax law than people that literally write tax law? This is peak Reddit hubris.
→ More replies→ More replies14
u/spankymacgruder 22h ago
Do you think that the super wealthy have cash?
They own assets that help compound thier wealth.
→ More replies124
u/Ares__ 23h ago
Isn't that because Norway and Europe are more cohesive, so going to another country isn't as huge an issue. To me this feels like if a state in the US raised taxes so they just move to a different state.
246
u/SugarSweetSonny 23h ago
Funny story about that. In NJ, one billionaire (literally just one guy) decided to retire and move to Florida.
They had to have an emergency legislative session and call everyone back in and redo the state budget because they were now projecting a shortfall.
Guy wasn't even leaving over high taxes, just wanted to retire and go to a warmer climate. One problem with having a high concentration of rich taxpayers is that you become extrmely volatile based on wild fluxuations and something like this can happen.
→ More replies21
u/Next-Bank-1813 22h ago
I think it was David Tepper right? The Panthers owner
→ More replies42
u/SugarSweetSonny 22h ago
They wouldn't say his name but thats the belief.
Interestingly, I think he moved BACK to NJ eventually.
His move had nothing to do with taxes but highlighted a problem with being to "top heavy" with tax revenues.
→ More replies47
u/clm1859 23h ago edited 22h ago
Yeah pretty much. Many of those norwegian super rich are moving to switzerland, both of which arent EU but do participate in europe's freedom of movement.
However, the majority of developed countries in the world are part of EU freedom of movement. So finding examples in developed countries that arent, is pretty hard.
Also if you are gonna save a few billion in taxes by moving, its still worth it, no matter how big of a deal the move is.
→ More replies30
u/MehmetTopal 22h ago
Most(if not all) countries including the US have investor visa programs. You can for example immediately get a green card by buying a $800k worth business that employs at least 10 US citizens. You can also get EU citizenship by buying real estate from Malta. These are usually trivial matters for people of that kind of wealth
→ More replies→ More replies16
u/Justame13 23h ago
The US also taxes ex-pats which is rare.
12
u/Nexus_of_Fate87 20h ago
Yeah, but most don't end up paying taxes because the US also lets expats write off the taxes they paid to their new host country, and most countries have higher taxation than the US. Typically the only way you're paying taxes as an expat is if you somehow weren't paying taxes in your new country.
→ More replies→ More replies24
u/Definitely_Not_Erik 18h ago
Norway did not loose $500 million in tax revenue by increasing the wealth tax. It went from providing roughly 18 billion NOK to 25 billion NOK the year the wealth tax increased.
Don't listen to the propaganda. It is loud, because wealth tax is one of the few taxes actually hitting the rich.
→ More replies
917
u/Far_Staff4887 1d ago
UK did in the 70s. Highest tax bracket had 80% income tax so almost everyone in that bracket left the country and the government's tax income actually went down.
395
u/boulevardofdef 1d ago
Obviously this is a very small number of people relatively speaking, but famously a lot of British rock stars left the country during this time. I've read stories about Mick Jagger having to keep the lights off and stay away from the windows at his London townhouse because he wasn't legally allowed to be in the country for too long and the police were staking him out to catch him.
156
u/AnimatorKris 1d ago
A lot of top athletes still leaving, mostly for Monaco
97
u/EddieTheHead120 22h ago
All the F1 drivers live in Monaco... So they can learn the track better y'know
55
u/jfchops2 21h ago
If you're a young European millionaire who spends half the year traveling anyways and doesn't need to live somewhere specific for work there's not many reasons not to live there
→ More replies14
u/Chippiewall 16h ago
Yeah, Monaco is actually quite a neat location to live as an F1 driver. The good drivers can easily afford living there, and it's really central for a lot of the European races so travel times to and from races is reduced a bit.
8
u/SagittaryX 20h ago
Not all of them, but yeah most.
Just fron last year, Magnussen, Tsunoda, Zhou, Sainz, Perez don’t live in Monaco. Ocon and Gasly also don’t live there, but that can be due to France by law not allowing tax dodging by living in Monaco.
Leclerc can also be exempted since he literally is from Monaco, it’s his country.
37
u/NortonBurns 22h ago
I personally knew a band who had their first major hit album mid 80's. Within months they became tax exiles & didn't come back, except for their 180 days, for years. It didn't need you to be mega rich to be forced out, merely nouveau riche-ish was sufficient.
→ More replies14
→ More replies34
u/c0ry_trev0r 22h ago
Exile on Main St was mostly written and recorded at a rented villa in southern France using mobile studio equipment because the band was tax exiles from the UK at the time.
Edit: for those unfamiliar the band I’m referring to here is the Rolling Stones
12
u/madh 21h ago
The US taxes all citizens no matter where they live.
17
u/Nexus_of_Fate87 19h ago
Technically yes, in practice, not really. You can claim credit for any taxes paid to your host country, and most countries have higher individual tax rates than the US, so most ex-pats don't end up paying US taxes, or very, very small amounts.
→ More replies5
u/madh 19h ago
Yes totally true. It just means that you can’t move to avoid tax spend as a US citizen (an exception might be Puerto Rico, but I’m not sure)
→ More replies→ More replies67
u/TheMagarity 23h ago
80? Try 95%. The lyrics "one for you, nineteen for me because I'm the taxman" is because that was the bracket George Harrison was in.
→ More replies
328
u/Astroruggie 1d ago
I remember reading that France did it in 70s and removed like a couple years later in total silence because it did more harm than good
153
u/roboboom 22h ago
Germany, Netherlands and Spain also had them and repealed them. It’s counterproductive everywhere.
Switzerland is the one country that can get away with it…hopefully for obvious reasons.
→ More replies15
u/LFPenAndPaper 22h ago
For Germany, I know the top of the income tax went down in the 50s, and then the top rate stayed pretty consistent. Although the point where it was applied wasn't accounted for inflation, so de facto rose.
Property tax was abolished because it treated real estate differently than other forms of wealth. The courts said that that was not acceptable, and the government has since not raised it, although it is still on the books.→ More replies23
137
u/wildcat12321 23h ago edited 20h ago
Yes it absolutely can happen where there is a wealth flight, it has happened in Norway. It is unclear if compelling places like the US would actually see a huge flight though.
But the bigger issue what and how you are taxing. The reality is wealth taxes are very difficult for a number of reasons. Many "rare" assets aren't easy to value, and not every extremely wealthy person has a ton of liquid cash.
Higher income taxes are fine, but the ultra-wealthy don't generate a lot of W-2 wage income. So you end up screwing the "working rich" like doctors and lawyers, who can obviously afford to pay a bit more, but it doesn't do anything for the super-wealthy you refer to like Elon or Bezos. The working rich folks do get involved in local communities and tend to give politicians money and, while tax rates are not historically high, they are the largest taxed bracket by dollar amount.
The Elon and Bezos crowd often does pay a lot in tax dollars, just not income tax. They pay high property taxes, often lots in sales taxes, payroll taxes for staff. They pay capital gains taxes on stocks or equity which is often where the majority of wealth is tied up. Those rates are lower than income rates, but many people rely on cap gains to fund their retirements, so harder to separate out the ultra wealthy.
There are loopholes to close in loans against assets, inheritance and step up bases, etc. but again, the effort required to address a lot of this really isnt raising revenues enough to solve the budget gap.
So what you see are Democrats with populist "tax the rich" slogans that won't offset all of the spending and mostly will impact their base of many working wealthy liberals, and Republicans who don't want to upset their biggest donors with something that doesn't fundamentally solve the budget issue (let alone those who wont raise taxes at all). It becomes easy to scapegoat the quiet smallest percentage of society rather than do the hard work to try to balance a budget on the backs of everyone who benefits from our governments.
We could stand to have higher tax rates, but it is just one of many things we have to do.
26
u/Jaggedmallard26 16h ago
So you end up screwing the "working rich" like doctors and lawyers, who can obviously afford to pay a bit more
And importantly a lot of these working rich will find it quite easy to get work visas in countries that don't heavily tax them. America brain draining most of the world is extremely well documented.
10
u/kal14144 14h ago
Don’t know about outside of the well regulated professions but specifically doctors and lawyers have a very hard time moving to the US. Doctors need to do residency in the US to practice here which is a minimum of 3 years working 60-80 hours a week for near minimum wage - not something experienced professionals are generally willing to put themselves through. Lawyers generally need an extra year master’s degree also extremely expensive and time consuming and generally won’t have access to the ultra high paying law jobs
→ More replies→ More replies19
u/ThePotato363 16h ago
Capital gains are probably the biggest, simplest thing. A reform that would really help America, at least, would be to tax capital gains as income.
For some reason we decided that income you don't work for is taxed at a lower rate than income you work for.
→ More replies
224
u/Entire-Joke4162 1d ago
I think France lost 60,000 millionaires between 2000 and 2017 after instituting a wealth tax
→ More replies54
u/10franc 23h ago
I know one personally. He moved to Switzerland. It was under Hollander.
→ More replies
141
19
u/lineasdedeseo 23h ago
Argentina's capital controls + wealth tax meant people are holding dollars either out of country or in their mattresses, Argentinians hold the most dollars behind the US and Russia.
576
u/veryfynnyname 1d ago
Ten years ago the Panama Papers came out and proved the ultra-rich were evading taxes and all that happened was the reporter got murdered.
The rich are above the law because they write the laws.
27
→ More replies104
u/DigitalApeManKing 20h ago edited 18h ago
The Panama Papers triggered protests worldwide, led to multiple heads of state resigning, and changed tax rules in certain countries. The only people who think that “nothing happened” from the Panama Papers are Internet doomers who act informed without actually reading the news.
Edit, here’s a source (there are many): https://publicintegrity.org/accountability/impact-of-panama-papers-rockets-around-the-world-u-s-officials-react-cautiously/
→ More replies49
110
u/Large-Assignment9320 23h ago
Norway, france, greece, and yes, non of these made any money from having the wealthy move.
71
u/bannedagainomg 20h ago
Its defintently not working here in norway.
Our goverment is actively fucking over the rich here.
You have to pay wealth tax if you are norwegian business owner however if the company is foregin owned the owner does not have to pay.
So if you and a swedish man for example had the exact same company with the same revenue you would have less money after taxes than the swede at the end of the year, simply because you are norwegian.
Sort of rewarding foregin investors instead of our own people.
→ More replies
28
u/Scared_Jello3998 20h ago
At least one that I'm personally aware of.
2 years ago, Norway introduced a wealth tax and a number of it's billionaires just relocated, resulting in Norway losing about 500 million dollars because of it.
→ More replies
50
u/yolocr8m8 1d ago
"Meager tax revenue" is not accurate.
→ More replies44
u/Royal_Scribblz 23h ago edited 15h ago
Yep, for example in the UK, the top 1% pays 30% of the total income tax revenue.
→ More replies
43
u/WVC_Least_Glamorous 23h ago
12
u/Shiirooo 19h ago
Never applied, because the Conseil constitutionnel censured it on the grounds that the tax was confiscatory. On the other hand, in the fight against tax evasion, the exit-tax has not been censured.
11
74
u/Chemical-Ebb6472 1d ago
The top individual marginal income tax rate increased over time in the US, through the early 1960s, with some additional bumps during war years. The top income tax rate reached above 90% from 1944 through 1963, peaking in 1944, when top taxpayers paid an income tax rate of 94% on their taxable income. Starting in 1964, a period of income tax rate decline began, ending in 1987. From 1987 to the present, the top income tax rate has been fluctuating in the 30% - 40% range.
The post-WW2 economic/baby boom also happened 1944-1963 so that high tax rate obviously failed to hurt the country as a whole.
One key issue though - income tax is not a wealth tax - wealthy people can just sit on their mounds of assets - not convert them into income - and therefore pay no income tax on their wealth.
53
u/msdos_kapital 23h ago
Also interesting to note that this was the only time in US history where the working classes had even a semblance of a power-sharing arrangement with the ruling capitalist class, coming off the heels of the New Deal. Capital always held the upper hand of course, but labor did have a seat at the table.
Wonder if they're related...
→ More replies6
u/SuddenXxdeathxx 18h ago
What? A person who owns things has power over those who don't? Nonsense.
Now back to work plebs, and remember your real enemy is [insert current media pushed group].
28
u/Karakawa549 23h ago
The post-WW2 economic boom happened because every other developed country of the world had just been bombed into oblivion. Can't have capital flight when there's nowhere for the capital to fly to. That allows policymakers a lot more leeway tax-wise that is not the case today.
→ More replies14
u/Chemical-Ebb6472 22h ago
?
An enormous amount of US capital was spent overseas to quickly rebuild Europe under the US Marshall plan.
The Allies also created the Japanese Keiretsu business conglomerate system to rebuild that country post WW2 and S Korea followed suit soon after with its Chaebol system.
One of the biggest complaints in US business back in the 80s was that the Japanese had better, newer factories and offices paid by US taxpayers.
→ More replies14
u/Karakawa549 22h ago
Right, so eventually we built the world back up, but in the late 40s and through the 50s (with those high tax rates) that rebuilding process was underway. Businesses were complaining about new Japanese factories in the 80s, not the 50s.
→ More replies→ More replies26
u/roboboom 22h ago
This is a favorite taking point, but those rates had massive deductions and loopholes compared to today. The effective rate, which is what matters a lot more than the marginal rate, was about 40% for the wealthiest. That’s higher than the 29-30% effective rate today. But not as massive a gap as it appears based on marginal.
Logic should make it obvious that effective tax rates well above 50% will just destroy economic activity and reduce tax revenue ultimately.
→ More replies
28
u/BensLight 1d ago
Not sure if they tried but in Spain it’s a pretty well known thing that when someone hits it big they move to Andorra.
It’s a tiny country between Spain and France but with pretty damn low income tax. 0% up to €24,000, 5% from €24,000 to €40,000 and a fixed 10% after that.
It’s also a freaking paradise if you ask me, if I lived in Spain or France and had a lot of money I’d move to Andorra for sure.
Same happens in the US but they just move to other states. Like Nevada, Florida or even Puerto Rico.
If they tried going after billionaires I’m pretty sure they’d find way to still not pay anything or, if they couldn’t find any loopholes, they’d just leave.
→ More replies
23
u/henchman171 1d ago
Lates 1960s early 1970s UK?
4
62
u/JCoelho 1d ago
Norway did a couple of years ago and had this exact outcome.
I wish billionaires would pay more, but it is very naive to believe this can be easily enforced. Many billionaires don't even pay income tax because their wealth is scattered in hundreds of Trusts, Offshore corporations and etc. Hiring a lawyer to hide your money well will always be cheaper than paying millions in tax every year
→ More replies41
u/bran_the_man93 23h ago
pay income tax
their wealth is scattered
Well, you don't pay income tax on wealth...
21
u/EastRoom8717 23h ago
States have tried it, and now those people live in other states.
For example: https://www.nytimes.com/2016/05/01/business/one-top-taxpayer-moved-and-new-jersey-shuddered.html
→ More replies4
u/AvonMustang 16h ago
Came to say this - you don't even have to look to other countries to see this happening. California is a great example of not only people but businesses leaving because they are taxed too high. Similar happening in Seattle where they have taxes that only apply to larger companies.
20
u/Euphoric-Mousse 20h ago
What should be done is taxing the businesses. If the business leaves then make sure it's just as much of a hit to sell as a foreign entity or let the free market replace them.
Taxing the rich directly will obviously cause them to flee. There's no incentive to stay. You need to go for the company itself because it can't just pick up and go. Make it hurt if they try.
→ More replies
6
u/Cirick1661 22h ago
TBH, they could easily include in legislation penalties for moving assets and transferring ownership so that the penalties would exceed the additional taxes. There is just too much money changing hands. Too many palms greased to actually get it done, while the working class is left blowing in the wind.
→ More replies
17
u/StuckInsideYourWalls 23h ago
I'm confused why prior to reagonomics we did tax the rich, at rates of like 40%, 55% etc - heck during WW2 weren't we up to like, 90% of their income? (income being direct income from pay, not that value they're otherwise worth off their assets etc). Why since reagonomics now trying to do so just see's capital flight from a country like everyone in this post is arguing?
Is it because now as a globe the majority of western countries are tax havens, where as before there'd be no where to really send your capital hiding, because it got taxed as hard?
If everyone just taxed the ultra rich again and gave them nowhere too run, would shit be different (y'kno, if they hadn't captured the very regulatory commissions creating these laws, I mean)?
It's like how they warned us life would get more expensive in Canada if we raised wages, so we have depressed wages for a good 20 years, and life still eclipsed wages in terms of affordability / cost of living, and this 'they'll just flee the country!!' just seems like the same kind of jig one spews to enable the status quo and keep the largest wealth transfer in human history moving ahead, lol.
→ More replies
16
u/Kflynn1337 21h ago
You know, if all of the G20 agreed to do it, where would the super wealthy go?
17
3
→ More replies6
19
14
u/1800twat 20h ago
The issue is pinning this problem on one single thing and assuming it cannot be loop-holed (almost anything can be loop-holed, there’s a reason lawyers exist).
This needs to be a multi-pronged approach: - Wealth tax. Implement it. - Residency tax. You want that beautiful home on Lake Cuomo in Italy? Live there for a continuous X months proven by utility bills, or pay a very high vacation home/real estate investment (REI) tax. - Property tax. Different from residency tax as it applies to multi-family and commercial/industrial properties. You want to have office real estate in the big labor market of NYC? You gotta pay for that. The oil refinery next to the port of Houston? Same thing. - Company residency. You want to set up your HQ in Ireland (considered a tax haven)? Great! Prove that corporate ownership lives in Ireland for 6+ continuous months of the year.
These billionaires can’t get where they are without the existence of company assets. Company assets that they are required to have to loan against banks to help provide business growth. Countries are failing to not tax these enough and tying these assets to their ownership’s residence is crucial.
If this was all followed with no breakdowns, it would work because the remaining tax havens would suddenly be places like Siberia in which no one wants to live. Just make it so their money making is tied to their residency and then implement it where people want to live which is a combination of beautiful places and large markets for either labor or some other resource (oil etc)
→ More replies
10
23h ago edited 12h ago
[deleted]
14
u/dreamincolor 22h ago
I don’t like the tax but let’s get the facts straight. It’s a capital gains tax on high earners not a wealth tax.
8
8
u/Ripoldo 20h ago
The governments are owned by the super wealthy of course they're going to say that, and a race to the bottom in taxes for the wealthy has been occurring. I guess we just continue until no rich people are taxed? A government can find out where and how everyone makes their money and tax them no matter where they go, they just don't want to because the polititians are owned by the wealthy.
If rich people want to flee the US they have to give up their citizenship. I'd also change it so foreigners can't own property in the US too. And if these people or their now foreign companies do business here, tax the hell of them. And they could go hard after tax havens in cyprus or panaman papers, but again the governments are owned by the wealthy.
Step one is taking back control of our governments and getting money out of politics. Until the governments work for us, they'll never do anything.
→ More replies
4
u/Drew149285 21h ago
The government needs to stop with the insanely wasteful spending, not tax people more.
7
u/squidbait 19h ago
Ya know, I'd be fine with the ultrarich leaving. Let them go infest somewhere else
→ More replies
5
u/yescakepls 17h ago
Yes, they came to America... European brain drain to America is a major problem.
→ More replies
5
u/HillBillThrills 9h ago
„We can’t remove this giant blood-sucking tick from our dog bcuz then the giant tick will latch onto some other dog.“
10
u/Mezmorizor 21h ago
Yes. They left the country. Norway had this happen very recently, and fears of this happening (along with Brexit) is also causing people to leave the UK too.
4
u/socal1959 21h ago
Yes back in the sixties and seventies the UK had a high tax rate of nearly 99% and most rich people moved check out the info regarding a lot of musicians like the stones, Beatles and Led Zep left. They had to stay out of the country for half the year and a day to avoid the taxes
6
4
u/Important_Antelope28 19h ago
you can see it in united states. companies have moved from one state to another just because of random tax hikes. heck companies have moved out of a state for laws that don't effect them as a manufacture but their consumer bases.
high taxes often lead to a company moving or not being started in that place.
3
u/Sherifftruman 16h ago
We tried it in the US (check old tax rates) for a long ass time and I don’t believe people left.
4
u/VintageLunatic 10h ago
US citizens get taxed no matter what part of the world they live in. They would have to renounce US citizenship, which—I suspect—many would not do, so moving is irrelevant. Doesn’t close existing loopholes though.
→ More replies
4
u/J_R_W_1980 6h ago
Add a type of tax based on net worth that is designed in a way to punish the uber rich for leaving the US. Also, if they leave the US, any business still here loses all tax breaks and is taxed more. If they remove all business from the US entirely, they are taxed heavily if they want to have business dealings within the US.
5.5k
u/literallyavillain 1d ago
Some startups have fled Norway due to their unrealised gains tax which is probably the closest to a “wealth tax”.