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?

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u/Zombiesus 1d ago

They simply forgot to tax the exportation of money.

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u/Medical-Response-142 1d ago

As if the super rich just have money on a local bank account. Don't be naive.

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u/Elkenrod Neutrality and Understanding 1d 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.

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u/hutch2522 1d ago edited 1d 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.

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u/ElectricalAlfalfa841 1d 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

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u/jgzman 1d 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.

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u/TurbulentFee7995 1d 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.

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u/taxinomics 1d 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.

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u/basedlandchad27 1d ago

Before all that -> Tax revenue was 17% of GDP

After all that -> Tax revenue was 17% of GDP, but the accountants and lawyers got paid

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u/jgzman 1d ago

That's a different scenario, with a similar outcome.

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u/IDigRollinRockBeer 8h ago

So like how do we elect people who don’t give a Fuck about money

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u/jgzman 1d ago

That can be bypassed with an NDA, enforced with jail time, and lots of it.

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u/basedlandchad27 1d ago

All you're doing is stopping one firm from getting a head start. As soon as the text of the law is public every single accounting firm in the country will start decoding it and long before taxes are due the next year 100% of them will be exactly where the one with the head start ended up.

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u/jgzman 1d ago

Yea, that's the way the ball bounces. But there's a difference between "we found a way to do what we want," which is the right of every citizen, and "here's the loopholes we wrote into the law, and we will tell you what they are for money."

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u/Karmaisthedevil 1d ago

Are the UK stupid?

I live here no need to answer that

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u/Substantial_System66 1d 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.

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u/kkjdroid 1d ago

The experts tend to have a vested interest in giving unhelpful advice in these instances.

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u/AdjunctFunktopus 1d ago

Best I can do is wealthy donors and pseudo-celebrities who have my interests at heart.

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u/XihuanNi-6784 20h ago

Thank you! I'm so tired of this ridiculous narrative that you must understand every detail of something in order to criticise it.

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u/runthepoint1 1d ago

Yeah but their pride though

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u/JaktheAce 1d ago

Yes, and now that you’ve unlocked understanding of collateralization rather than liquidation, you think you know it much better, but it’s still a completely surface level understanding like you’re only seeing the reflection on the glass. Having collateralization trigger taxation would also backfire in multiple ways. More sensible to have collateralized securities realize a small portion of gain automatically annually, but it would have to be fractional to actually raise revenue.

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u/MagicCookiee 1d ago

How does money work?

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u/ElectricalAlfalfa841 1d ago

How it makes more money for the rich in the bank, and you lose every day to natural inflation

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u/bertch313 1d ago

And that's why that system should be eliminated beginning with every corporate bank with a global presence

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u/IDigRollinRockBeer 8h ago

What country? Are we still talking about Norway?

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u/Scrum_Bag 1d 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.

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u/mediumunicorn 1d ago

I got news for you then, because only one party is talking about fixing these kinds of problems and it’s not the “conservative” one.

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u/fixmyaccountplease 1d ago

They're too in bed with their corporate donors to do shit let's be real

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u/unassumingdink 1d ago

talking

Yeah, that's kind of the key word here. Talking about it. For a few months during election years. And then taking some more money from billionaires and stonewalling their base until the next election cycle. Sometimes they'll support some comedically low effort/low result legislation for show. And sadly the base can't understand the difference between being stonewalled and being fought for. Or they don't care about the difference. Either way.

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u/SuperScorned 1d ago

Do you want me to link you all of the bills that people like Bernie have introduced that have gotten shot down before they made it to the floor by people like Mitch McConnell? Because we can play that game.

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u/unassumingdink 1d ago

It's really telling that you have to use a guy who's not a Democrat to defend the progressive credentials of the Democrats.

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u/Zombiesus 23h ago

Then vote for AOC in 4 years. She will champion the will of the people. Just like Bernie would have.

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u/loheiman 1d ago

Just get rid of the stepping up of cost basis on inheritance. Make them realize the gains then.

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u/bowlinggreener 1d ago

This is wrong. You don’t make them realize the gains at the point of inheritance, only when they actually sell. But the cost basis should not be stepped up to the price at the time of transfer.

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u/Sauerkrauttme 1d ago

If you don't support oligarchy then you aren't conservative. To be conservative means you uncritically support the wealthy's right to own and control everything

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u/Yung_Oldfag 1d ago

Boy that's a one dimensional political analysis if I've ever read one

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u/Old_Palpitation_6535 1d ago

I suppose it might have meant something different in the past.

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u/cpg215 1d 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.

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u/hutch2522 1d 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.

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u/JimmyB3am5 1d ago

The only lones I have ever heard of the interest being tax deductible were on a primary home and that capped out at $750,000 and student loans capped at $2500. What do you think would happen to the economy if you pretty much blocked the ability for a company to expand without giving up ownership in the business?

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u/Old_Acanthaceae5198 1d ago

Interest on home loans being deductible to 750 is also worthless for the majority of home owners. In practice they'll be taking the standard deduction.

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u/JimmyB3am5 1d ago

Exactly.

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u/l2ukuz 1d ago

More small business would be able to compete

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u/RaidenMonster 1d ago

The best chance for the person that started off in the shitter is not through accumulating wealth and becoming Buffet, it’s getting a high paying job like doctor, lawyer, pilot, engineer.

Unfortunately, those high earners get hammered with income taxes and get very little of the benefit for being “rich.”

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u/Pristine-Frosting-20 1d ago

Would this affect my 401k

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u/hutch2522 1d 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.

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u/steelhouse1 1d 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.

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u/cwood92 1d ago

I was about to say. A lot of middle class people do these things to leverage the little equity they actually have

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u/FreeDarkChocolate 1d ago

home equity loan.

A lot of farmers would get hit hard.

I think common sense exemption thresholds would handle these cases easily, like how the estate and gift tax exemptions work.

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u/steelhouse1 1d ago

Oh I realize it could be dealt with. But an exemption is a loophole. Set a limit on a dollar value amount, or a specific item/asset, and there is a work around. It’s just a hurdle and billionaires have people to throw at those hurdles.

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u/Trevor775 1d ago

Car loans? Second car loans?...

Almost all loans require a Personal Financial Statement and a personal guarantee.

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u/steelhouse1 1d ago

Well per the complaint on getting loans on assets, a title loan would qualify as a taxable loan by what these discussions are inquiring about.

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u/Old_Palpitation_6535 1d ago

No. Not as described.

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u/DoduOW 1d ago

This is genuinely the first wealth tax style thing I've seen that is coming from someone with more than 3 braincells, one question tho. How do you stop it hitting poor people too with things like taking payday loans/credit cards?

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u/hutch2522 1d ago

Neither are collateral that would be subject to capital gains. This isn’t all loans. It’s just loans against assets that may increase in value. The loop hole for the rich is they can hold assets (like stocks) for a long time which triggers long term capital gains taxing rather than short term. Huge saves. And, they access this capital by taking loans. So they get to enjoy the wealth while their assets move into a more favorable tax category AND appreciate in value. That tax savings and potential gains from holding far outweighs the cost of any interest on a loan. Your average person can’t access that advantage.

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u/UnoStufato 1d ago

That's why we need to make using collateral a taxable event.

Just to play the devil's advocate here - should this also apply to taking out a mortgage on your house? If not, why not?

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u/loheiman 1d ago

Why not take away the incentive to borrow instead of sell? What is the argument for stepping up the cost basis for inherited assets? The person inheriting did absolutely nothing to earn those assets, why shouldn't they pay tax on them?

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u/Claill1a 19h ago

The exemption for primary residences to avoid affecting regular people with their mortgages makes sense, but it would be important to establish clear rules to ensure that this type of strategy is not abused.

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u/Chief_Kief 5h ago

Love me a good ProPublica article. Thanks for sharing that link and for the explanation.

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u/Wesker405 1d ago

The super rich don't care about have liquid assets because they can just take loans to live off of based on their wealth.

In order to pay back the loan, they need to liquidate assets and pay taxes on that. These loans are already taxed.

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u/hutch2522 1d ago

Or, just take more loans.

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u/Wesker405 1d ago

And banks will just let them do that indefinitely? No. They'll eventually need to pay back the loan and the entire time, they are paying interest. The money they use for those payments is taxed

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u/JimmyB3am5 1d ago

You are the guy who takes cash advances on a credit card to pay off other credit cards aren't you?

Only a person like that would think that taking out loans to pay off other loans is a good idea.

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u/Piechti 1d ago

I give it at least four days before private banks will begin uncollateralized loans in exchange for some unspecified asset pledge to be given at a later date, removing the tax base.

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u/reality72 1d ago

Close one loophole and they will find another loophole and exploit it. It’s an endless game of cat and mouse.

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u/hutch2522 1d ago

Sure. Let’s not try then. Great solution.

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u/GravyMcBiscuits 1d ago

If the proposal involves making the tax code more complex and/or invasive, then you're going the wrong direction.

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u/petiejoe83 1d ago edited 1d ago

There's no reason to exempt primary residences. Normal people getting normal-sized loans aren't putting their stock up for collateral. They have to sell that stock for their down payment. If anyone has an example of a bank that allows stock as collateral for less than, say, $1 million, I'm very interested to see that.

Edit - I think my comment was ambiguous. I'm not talking about the current law exempting the capital gains from selling a primary residence. I'm only talking about the proposal involving using stock as collateral to purchase a home. I see no reason to carve out exemptions for a theoretical law that only impacts wealthy people using a loophole to avoid paying capital gains.

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u/hutch2522 1d ago

You’re mixing two things here. When this is proposed, it’s around capital gains. You owe capital gains on anything you sell for a profit, stocks being one of those things. Property is one of those things as well. One of the arguments against taxing gains on collateral is a refinance of a primary residence could fall into this. Say your primary residence has gained 100k in value and you have to refinance for whatever reason. That gain would be taxed. However, as I said, we already have exclusions for capital gains on primary residences so no reason they couldn’t be protected in this hypothetical future where collateral gains get taxed.

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u/petiejoe83 1d ago

I added an edit which hopefully clarifies my statement. I'm not talking about taxing the gain of your house when doing a refinance. Just keep the new law simple - any time you use collateral for a loan, treat the capital gains of that collateral the same as if you sold it and immediately purchased it back. Any collateral that is exempted for capital gains (e.g. a primary residence) would be similarly exempted as part of using the capital as collateral. There are already rules around stepping up basis so this doesn't need to add much complexity.

Anyway, I just did a bit of digging to learn the smallest loan you can get by using stock as a collateral. Some banks will make a "Securities-based line of credit" for as little as $75k. So we would need some research into the kinds of people and transactions impacted. I've never seen discussion of a typical person doing this, but my impression that it was only a tool for the wealthy to avoid paying capital gains may not be correct.

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u/AureliasTenant 1d ago

I mean you could allow single family residences below a certain multiple to the median income or something, or threshold the size of the loan, or others

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u/kemitche 1d 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.

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u/roboboom 1d ago

Putting aside the practicalities, In the US, a federal wealth tax is unconstitutional.

State and local property taxes are ok.

So all this talk in the US is political theater. There is precisely a 0% chance of the current Court upholding a wealth tax.

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u/jamck1977 1d ago

I didn’t know a federal wealth tax is unconstitutional - can you point me to some sources or explanations? I figured we didn’t do it because it fails so frequently.

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u/roboboom 1d ago

Here’s one article. https://klehr.com/naghoods/2023/04/Insight-The-Proposed-Federal-Wealth-Tax-Would-Be-Unconstitutional.pdf

It boils down to a few simple points. 1. The structure of the Constitution is that the Federal Government only has powers enumerated in the Constitution. Anything not listed is reserved for states.

  1. This is why income taxes were ruled unconstitutional in 1895. We passed the 16th Amendment in 1913 to allow income taxes.

  2. Property taxes are allowed as a “direct tax” under the Constitution but it must be proportional to population. I’ve never seen anyone propose a way this could actually work in practice.

  3. There are of course people who argue wealth taxes could be constitutional. You have to either come up with a tortured definition of “income” that includes wealth, or charge an “excise tax” on the privilege of being wealthy. Pretty flimsy in my view.

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u/tobotic 1d ago

The constitution also doesn't allow the federal government to age restrict the sale of alcohol, but the federal government still did: it basically just blackmailed all fifty states to do so using the powers it does have.

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u/roboboom 1d ago

That’s true.

I think the conversation around these proposals would be much better if the constitutional hurdle were acknowledged. I very rarely see that.

There are some potential workarounds, including yours, but they are all pretty complex.

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u/JimmyB3am5 1d ago

It is still a state law though. Why would a state send the money it collected under a state imposed tax to the federal government?

Any state that would resist the feds in implementing the tax would see a boom in businesses relocating to the state and the investments being made would most likely offset whatever money the government would threaten to withhold from the state in federal aid.

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u/RequiemAA 1d ago

Why would a state send the money it collected under a state imposed tax to the federal government?

This is where the issue lies. Why would the federal government provide things like infrastructure maintenance or public works? The fed can leverage a lot against individual states, it just chooses not to.

One path to a wealth tax, single-payer healthcare, any of these big ticket items would be to start leveraging these types of things against States implementing these laws. 'Red' states by and large rely on the federal government to provide a lot of services that the fed does not currently hold hostage. They could.

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u/round-earth-theory 1d ago

The way to do it wouldn't be the Fed getting the money. It would work best in a system like Medicare. Force the states to reach a certain level of funding to receive any federal funding and encourage the method by which they raise those funds. That way the taxes still reside within the State, the benefits go to the State, and they're encouraged to keep/improve the system for themselves/their constituents. It would also be more robust than trying to get the Fed to coordinate and manage.

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u/jamck1977 1d ago

Thank you for that!

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u/PoolQueasy7388 1d ago

Flimsy? Have you read any of the current Supreme Court decisions. They just make it up out of whole cloth.

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u/Trevor775 1d ago

If your house doesn't perform as an asset most people still want to live in it. I don't think most people have sentimental attachments to Vanguard index funds.

You need a car to travel in. You can't keep your car in the caymen islands.

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u/Claill1a 19h ago

The key is to design a fair and balanced system that doesn’t discourage investment or create distortions in the economy.

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u/loopyspoopy 1d 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. 

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u/JimmyB3am5 1d ago

Property tax is a rent. It goes to offset the services you get from your local or state government which in theory help provide you with things you utilize on a daily basis. Water, Fire protection, police, schools.

The "tax" should in theory be based off of the size of the property you own, not the value, but this would be really hard to calculate because every time you subdivided a property the taxes would have to change.

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u/loopyspoopy 1d ago

And this means that corporate holdings can't be taxed for similar reasons, why? 

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u/JimmyB3am5 1d ago

In the United States? Because the Constitution doesn't allow it.

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u/hows_the_h2o 1d ago

You get taxed on it by the state, not the feds. A fed tax on unrealized gains is unconstitutional.

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u/loopyspoopy 1d ago edited 1d ago

Uh no, your property tax does not go to the state, it goes to local governments - municipalities, counties, school districts, etc. 

However, this thread is not America specific, so even if what you said was true, it is not unconstitutional in many countries.

The constitution has also changed many times over, that's what an amendment is.

Further, America does a lot that's "unconstitutional" and what is considered "unconstitutional" shifts as the supreme court, their ideals, and their whims shift.

Finally, a tax doesn't have to be based on gains, my property tax certainly isnt. So taxing the ultra rich on something like their stock holdings would not have to be based on unrealized gains. E.G. A flat tax on people who own more than a certain percentage of a corporation's public shares would not be a tax on unrealized gains.

None of these things changes my point that a non-liquid asset are still, very much, taxable.

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u/hows_the_h2o 1d ago edited 1d ago

lol, no.

Until the 16th amendment is changed or repealed, a federal tax on unrealized gains is very much currently unconstitutional and would be bitch slapped by the Supreme Court.

If you want the feds to tax stock holdings, sorry that isn’t income either until the stocks are sold, so no dice.

As far as other countries go, sure go ahead and let them try it there are plenty of examples of countries that tried it and failed already ITT

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u/loopyspoopy 1d ago

And like I said, you would not have to be taxing on "unrealized gains". 

A flat tax is not necessarily based on gains, it is not based on income, it is based on ownership of assets. It would not have anything to do with "capital gains" it would be based on having a certain level of capital in the first place.

And I'm not talking about whether it would succeed or not, you said something wasn't constitutional, and not only does that not apply to most of the world, but it also isn't true. It would only be a federal tax on unrealized gains which would be unconstitutional, and that is not the only way to tax someone.

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u/hows_the_h2o 1d ago

If you are taxing assets like stock holdings and real estate etc (that hasn’t been sold) that also is not income.

The 16th amendment prevents the feds from issuing a direct tax on anything that isn’t income.

It flat out unconstitutional for the feds to be like “you have $10m in assets, therefore you owe us $300k”

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u/loopyspoopy 1d ago

The 16th amendment just gives the feds the power to tax income, it doesn't say the only thing they're allowed to tax is income.

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u/Aethyssus0913 1d ago

The 16th amendment doesn’t define income. There are ways that unrealized gains can be counted as income, such as any time they are used as collateral.

Also, the 16th amendment doesn’t prevent the federal government from doing anything. Rather, it gives the permission to do something, specifically levy taxes on all forms of income. The 10th amendment is what prohibits the government from other forms of taxation.

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u/[deleted] 1d ago

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u/loopyspoopy 1d ago

Lol, sure bud.

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u/null640 1d ago

Yes, but you are not rich.

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u/loopyspoopy 1d ago

Okay? I'm just pointing out that an asset being liquid or not has no bearing on whether it can be taxed.

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u/c0ry_trev0r 1d ago

Man if I couldn’t have a pool of gold coins I could go diving into (and shatter my skull and spine in the process) then I have zero interest in being ultra wealthy. It’s like why even bother at that point.

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u/xGsGt 1d ago

Bc ppl that are moving this narrative have no idea how the world of finance works they just know big rich man is bad

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u/RBJII 1d ago

Wait so everything I watched as a kid was a lie? You can’t swim in a vault of gold coins once you became a thousandaire?

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u/Redditusero4334950 1d ago

Stock is considered liquid unless it's stock in a closely held corporation.

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u/Binkusu 1d ago

You sure can tax the loan they use their stocks as collateral for. Sure sounds like they realized something.

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u/DinosaurDied 1d ago

Stocks are by definition, liquid. 

I can liquidate my entire portfolio to cash in an instant.

Now for somebody like Jeff, he can’t sell everything at once without major issues. 

However we saw after his divorce Mckenzie took a large portion and has been selling it off aggressively to no ill effects. 

The rich certainly can be made to liquidate their stocks to pay a bill 

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u/PeopleCallMeSimon 1d ago

It's definitely possible to tax peoples ownership of stocks.

The question isn't whether it's possible or not (it is). The question is whether it would help reduce economic inequality.

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u/Think-Explanation-75 1d ago

And yet they can take tax-free loans against it and transform it into a liquid asset. Can't have it both ways. If they want to claim its not liquid they shouldn't be able to use that wealth without incurring capital gains tax. If they get to via asset-backed loans then it should be taxed at capital gains.

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u/MooseBoys 1d ago

Stock in publicly-traded companies is definitely considered a liquid asset, but you're right that it's difficult to tax its value.

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u/Zombiesus 1d ago

Who brain washed you? Did it hurt? You can literally tax anything. It’s just a matter of how much and when. Stop acting like rich people wealth is rocket science. It’s not.

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u/slabradask 22h ago

A stock in the market is liquid as fuck. That is (a big part) of the point of the stockmarket... Dont just belive their statements.

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u/Former_Star1081 21h ago

You can tax wealth and of course stocks... most countries just choose not to do it.

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u/razorirr 1d ago

"Bullshit"

-property taxes. 

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u/Royal_Annek 1d ago

My house is not a liquid asset... And yet it gets taxed all the fucking time

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u/Jujumofu 1d ago

Thats why you gotta tax collaterals.

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u/sharpshooter999 1d ago

What if we taxed a percentage of the value of each stock owned?

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u/trevor32192 1d ago

No one acts like that. You just interpret their position that way. People just don't see a reason why income is massively disadvantaged compared to capital. A stock is nearly as liquid as cash. The only difference is our own arbitrary definition of income.

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u/Elkenrod Neutrality and Understanding 1d ago

No one acts like that

You'd be surprised how many people act like that. Lots of people on this website who make the "eat the rich" argument believe that they have their entire net worth in raw money in their bank account.

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u/trevor32192 1d ago

No thats your own strawman argument you attribute to them. Everyone knows that their net worth isn't in cash. They just disagree with the arbitrary difference between income and capital gains.

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u/Elkenrod Neutrality and Understanding 1d ago

I have seen far too many people say what I claimed for it to be a "strawman argument". People on this website are very dumb and easily swayed by post titles they see on subreddits like FluentInFinance and WhitePeopleTwitter.

They just disagree with the arbitrary difference between income and capital gains.

Capital gains are income. They are taxed as income. You are confusing realized gains with non-realized gains. Something is not subjective to capital gains tax until it is sold.

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u/noggin-scratcher 18h ago

I've heard the term "weak man argument" for cases where it's not a "straw man" because there really is someone who holds the position you're arguing against, but where you've still chosen one of the weakest opposing positions as the thing you're going to argue about—rather than addressing any of the better, stronger, more sophisticated arguments for the opposition. Which can create a false impression of that weak argument being representative of the other side of the debate.

It's not factually wrong to say "there exist some people who believe this ridiculous thing", it's just not really relevant to a policy debate to bring up what your dumbest available opponents are saying. We should be putting the strongest arguments against each other, not getting distracted by making fun of weak arguments.

If someone tried to argue back at you by saying "people act like wealth held in stocks is completely illiquid, and impossible to access without tanking the value of the underlying company; they act like billionaires are actually not really all that rich, because they don't have it in cash"—that's an unsophisticated and weak version of that position, but it's also a viewpoint I really have seen some people hold.

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u/trevor32192 1d ago

I'm not confusing anything. You just keep making up strawman to beat up because ypu can't argue against the rest.

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u/Elkenrod Neutrality and Understanding 1d ago

I'm not confusing anything.

cough

You just keep making up strawman to beat up because ypu can't argue against the rest.

As opposed to you, who just keeps making strawman arguments of accusing everyone of making strawman arguments? If you're just going to keep going around in circles and making baseless accusations, I think we're done here.

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u/numbersthen0987431 1d 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.

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u/Randomn355 1d ago

Imagine if there was a way to focus where they moved that money to...

Hmm...

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u/Cheap-Cauliflower-51 1d ago

Isn't naive - other countries already have an exit tax like france

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u/Jimmyking4ever 1d ago

As if the super rich would sell off their local assets and move internationally instead of just filing paperwork in a different country

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u/AvatarOfMomus 1d ago

It's not local bank accounts. These people get their money from people spending on their companies. Those companies have local subsidiaries. That movement of money can be taxed, especially if it's not for a legitimate business purpose.

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u/kakihara123 1d ago

The thing is, who cares where there money is? Ideally there would be a tax on the amount of total wealth when they leave the country (as in move, not travel). They can sell shit until they have enough to pay the taxes.

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u/BirdLawyer50 1d ago

A an existing workaround to a proposed solution doesn’t mean that no solution should be sought. 

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u/TrueNefariousness358 1d ago

Just detain them, and they either prove their net worth or pay an export tax on the governments estimate of their net worth. If they refuse stick em in a hole.

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u/pieter1234569 1d ago

That's the way the US does it. You will forever be a citizen of the united states, and he will forever pay taxes to the united states. This ensures that people don't leave, as there isn't any point. The tax man still gets its due.

If you just do that, the problem is solved entirely, and there is no massive outflow of money. As they have nowhere to go in the world, where they would be better off. They can move sure, but pay they will, for the rest of their lives.

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u/SomeRandomSomeWhere 1d ago

As I understand, if you officially give up your US citizenship, you don't pay any more taxes.

If you have dual citizenship, with US citizenship being one, you will still pay taxes to the US.

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u/aceshighdw 1d ago

You have to pay an exit tax. I believe it's close to 30%

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u/TylerTheTerible 1d ago

You are correct. I can confirm as a tax accountant. This is why Golden Passports are so popular. But no matter what, if you are a US citizen, they are taxing you anywhere you are in the world.

FYI, the book or website Nomad Capitalist goes over using various citizenships for different purposes (business, taxes, where you live), if you wanted some more info. Really good read.

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u/ohlookahipster 1d ago

There’s a federal exit tax for US citizens ex-patriating. It’s something like 30%. But as long as you haven’t been a CA resident, or do business within CA (which is extremely arbitrary as the CAFTB will garnish overseas accounts at random without due process), you won’t ever pay a cent back to the States once you emigrate.

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u/Sanguinor-Exemplar 1d ago

Wait and see how much the value of your money drops if people can't freely pull out their money

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u/IShouldBeInCharge 1d ago

We don't have any money that's the problem. So logically, more and more "horrible" solutions you don't like are likely to be suggested because we're all so fucking desperate. And yes, sometimes they make things worse. But if you're trying to be a smart person the smart thing is realizing when things have gone so far that people are losing their fucking minds and adjust accordingly ... not continue to lecture them like it's 1986.

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u/Pressed_Thumb 6h ago

You are simply advocating for irrationality. The fact is you guys have to be lectured because you don't see that billionaires are not the cause of your misery. The cause is governments destroying the value of currency and over regulating markets. But blaming billionaires is just a better rationalisation for your envy and frustration, so you'll keep insisting on it even when it's clear that's a stupid idea.

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u/Zombiesus 23h ago

It’s not “people” it’s a couple of billionaires. Taxing billionaires has never dropped the value of a country or its currency. Ever.

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u/taxinomics 1d ago

The U.S. dollar seems to be doing just fine despite the expatriation tax.

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u/FellowTraveler69 1d ago

You mean the fee for no longer being a us citizen? That is a far cry from seizing half a billionaire's wealth arbitrarily.

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u/taxinomics 1d ago

Nobody said anything about seizing wealth arbitrarily. The parent comment suggested you need to tax expatriation if you want to tax wealth otherwise the wealthy will simply expatriate to avoid the wealth tax. The response suggested taxing expatriation will cause the value of currency to collapse.

The U.S. taxes expatriation, and the value of its currency is doing just fine.

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u/FellowTraveler69 1d ago

But the scale of it and rarity of it happening are completely different to not be comparable. Another redditor posted here you often don't even have to pay it if you already paying taxes in a foreign country. So yeah, having a few people pay a few thousand every year to give up their citizenship is way different from seizing billions in real estate, equity, etc.

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u/taxinomics 1d ago

What? The commenter suggested taxing expatriation will cause the value of a country’s currency to collapse. The U.S. has taxed expatriation for decades, and the value of its currency has not collapsed. There is no “comparison” being made. It is simply a fact that taxing expatriation does not cause the value of a country’s currency to collapse.

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u/FellowTraveler69 1d ago

There is thing called nuance. Taxing someone a few throunsad for leaving is not the same as seizing billions of dollars in assets. I don't know how many more ways I can say it.

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u/taxinomics 1d ago

That commenter suggested “If a country does A, then B will happen.” The U.S. does A, and B has not happened. This should not be so difficult to understand.

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u/FellowTraveler69 1d ago

Only Sith deal in absolutes. You wouldn't happen to be wearing black robes and have a thing for red lightsabers?

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u/Zombiesus 23h ago

You are losing this debate. Just admit you are out of your league and move on.

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u/The_ApolloAffair 1d ago

That sounds like a great way to kill foreign investment in your country.

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u/MistryMachine3 1d ago

Do you really think you know more about tax law than people that literally write tax law? This is peak Reddit hubris.

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u/IShouldBeInCharge 1d ago

OMG you can't truly be this fucking stupid. If the people who wrote tax law were completely honest people then yes, this would be absurd. When they are the tools of capital ... then yes we CAN do better. YOU can do better ... by not being so fucking stupid.

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u/ClovenGambler 1d ago

Lmao they weren’t saying Norway misinterpreted their own laws

He was tongue in cheek saying they should make a law that taxes the wealth of those leaving the country

Your comment is peak Reddit “ACKSHUALLY”

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u/TheLibertarianTurtle 1d ago

Norway literally has an exit tax on unrealized gains

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u/Ereaser 15h ago

Wasn't that one implemented later though?

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u/bothunter 1d ago

You're right, we should leave it up to the experts who are paid by the billionaires.

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u/lemonjuice707 1d ago

They should, when you operate on feelings instead of reality you end up in a 500 million dollar hole

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u/Dioscouri 1d ago

And said laws are written by the wealthy.

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u/MistryMachine3 1d ago

Obviously not a law to tax the wealthy that had all of the wealth flee.

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u/spankymacgruder 1d ago

Do you think that the super wealthy have cash?

They own assets that help compound thier wealth.

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u/Pstoned_ 1d ago

lol, even if that was possible, imagine thinking, “let’s just steal money” as a legitimate policy.

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u/Zombiesus 23h ago

Taxing money is not stealing.

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u/YucatronVen 1d ago

So you want to confiscate.

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u/reality72 1d ago

They should’ve just built a wall to keep people from leaving, like the Berlin Wall

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u/grammar_fixer_2 1d ago

That’s what we do in the US. Expatriation Tax is very much a thing here.

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u/ILikeToDisagreeDude 1d ago

Semi correct only. One of the reasons they left is because they are pissed that they are taxed on something foreign business owners in Norway isn’t taxed on… not fair at all. Aaaand the government that caused them to flee basically threatened them and acted childish. I would have left too.

The tax doesn’t work and only hurts the businesses - and the normal guy.

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u/Moist-Army1707 1d ago

That’s kind of what they did. Their wealth tax is an exit tax, but you can only do it once.

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u/FakePhillyCheezStake 1d ago

Bruh at what point does this just become making it illegal for people to leave the country

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u/Zombiesus 23h ago

I know you don’t have any money but try and take 50k dollars across the border.. see what happens. You guys can’t be this brain washed…..

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u/Trevor775 1d ago

Capital controls are a bad idea. No new cash coming in and people with find ways around it and not look back.

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u/AntiqueCheesecake503 1d ago

Ooh, capital controls. We know all the best performing economies use those to steal property at will.

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u/StephenHunterUK 1d ago

Currency controls have been a thing in the past to stop capital flight, but it was in the days where cash was more widely used and electronic banking wasn't a thing. The British implemented them as a wartime measure to stop a flight of sterling and kept it after the war. It merely ended up causing more hassle to tourists than the actual rich.

https://en.wikipedia.org/wiki/Exchange_controls_in_the_United_Kingdom

The Germans implemented a "Reich Flight Tax" in 1931 during the Great Depression to stop wealth fleeing their country. The Nazis then used it to grab the assets of Jews and others fleeing Germany... with the result that some no longer had the resources needed to satisfy other countries they could finance themselves.

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u/Zombiesus 23h ago

It’s 2024. Taxing the ultra wealthy in an equitable and fair way is not as difficult as they want you to believe.

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u/demonicneon 1d ago

America has it sort of right in regards to this. You American? You pay tax on income. Doesn’t matter where you live you pay America. 

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u/newprofile15 1d ago

Yea they should have built a wall around the country too to make sure that people can’t escape.  Honestly they should just go ahead and confiscate everyone’s assets because they might spend them on something other than the government.

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u/Zombiesus 23h ago

You’ve never had money before.

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u/CandusManus 1d ago

Oh yes, because when a rich person moves they just load train cars with cash. That’s totally how that works. 

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u/Zombiesus 23h ago

Moving wealth from one country to another country is actually more like that than you realize. In fact what you described is easier.

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u/grifxdonut 1d ago

China won't be happy if the US does that. Nor will the immigrants who send money to their families in their home countries

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u/Zombiesus 23h ago

And?

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u/grifxdonut 17h ago

Well a lot of people seem to think that if we can't fund immigrant families living in other countries, we're racist. And a lot of people would be upset if they can't get their Amazon products from China for $2

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u/Greedy_Camp_5561 1d ago

Lol, how to kill your economy in one simple step... I don't know what would be more destructive: the stampede out of the country before this law takes effect or the complete inability to attract foreign investment afterwards.

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u/sealcon 1d ago

You think that would have made things any better?

That's how you guarantee that your country will never be anybody's first choice to build something valuable in, ever.

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u/ldn-ldn 22h ago

Wealth is not money.

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u/Minimus-Maximus-69 21h ago

iirc they are now proposing a law to do just that.

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u/notbadhbu 1d ago

There's a lot more you can do here too, but I actually dont think it's that big of a deal. Capital is less important than actual resources and labour. And they can't take those with them.

I'm all for seizing assets if this is tried though still, the ultra wealthy do not need to exist in a world where people still lack services.

Capital flight is a nearly completely preventable problem, and in the end it isn't even that much of a problem as capital itself (like magnets) can do no work.

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u/Easy-Sector2501 1d ago

A lot of people don't understand that, tho, as evidenced by your downvotes...

It's pretty difficult to uproot a factory and take it with them. There's also no reason why the super-rich fleeing the country should still be entitled to do business with their former home. Sell the corporate assets to those who will continue to produce domestically.

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u/fob4fobulous 1d ago

Which you get to do all of one time. You cannot tax your way in to prosperity

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u/Zombiesus 23h ago

The billionaires you boot lick for don’t need your help. No billionaire leaves the country their wealth is in if they lose half. The prosperity of a country only comes from taxing..

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u/rolandpapi 1d ago

Do you not realize how shortsighted that is

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