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/gastro_psychic 1d 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.

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u/TurnDown4WattGaming 1d ago

That’s what the people in favor of it want to happen though. To them, that’s a feature and not a bug. Jealousy makes people quite vindictive.

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u/Goredema 1d ago

That's the risk of investing in stocks. They should stop buying avocado toast and lattes so they can afford the tax.

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u/Admirable-Word-8964 1d ago

Better than investing in property and making real estate ridiculously hard to obtain for regular people.

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u/gastro_psychic 1d ago

Investing in companies is probably a good thing in a capitalist society…

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u/Candid-Mycologist539 1d ago

Investing in companies is probably a good thing in a capitalist society…

Wealth hoarding and extreme income inequality is definitely NOT a good thing for society.

What if we spread the wealth out through taxation and opportunity?

Instead of one guy investing $1B, we could have 1000 people each investing $1M in businesses.

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u/gastro_psychic 1d ago

I have invested in startups. I would be mortified if I had to pay tax on illiquid shares for a startup that will probably go bankrupt.

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u/Candid-Mycologist539 1d ago

Are you worth more than $50M?

Then the tax doesn't apply to you. "You get the first $50M for free.*"

*Tax free when it comes to the proposed wealth tax.

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u/gastro_psychic 1d ago

Where is the $50M number coming from?

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u/Candid-Mycologist539 1d ago

This was the proposed wealth tax bill by Elizabeth Warren in the U.S. The Wealth Tax wouldn't kick in until the $50M mark. At that point, the rate is 2% for everything above $50M. 3% for everything above $1B.

"You get the first $50M for free."

Of course, taxing the wealthy in the U.S. is a no-no.

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u/chmarti 1d ago

FYI though that in the Netherlands the number is not 50 million, it's 50,000 eur. So the issue mentioned about needing to sell stock to pay the tax is a real thing, even for middle class investors. Interestingly, the Netherlands allows a wealth tax exemption for a house you're currently living in. This prevents people from needing to sell their house to pay a wealth tax, but drives up housing prices too as everyone pours money into their tax exempt home.

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u/Candid-Mycologist539 22h ago

OTOH, a lot is provided by the society of the Netherlands.

Do people go into debt for college?

Do people lose their houses over medical debt?

Do parents pay one parent's income to the daycare for one child?

Is one forced to own a car, or is public transportation available?

As for housing, it's ridiculously unaffordable in the U.S. because the multi-billion dollar corporations (owned and run by guess who) are price fixing rents upward (no competition among them); and private equity firms (owned and run by guess who) are buying up every house they can, and regular people can't compete with their deep pockets.

The U.S. has the worst homeless crisis I've seen in my 5+ decades. 40-60% of our homeless have jobs...but can't afford housing. Meanwhile, we have 28 vacant homes for every homeless person.

But the "good" news is that homelessness is more and more likely to be criminalized, so the homeless will now just be arrested. /s

As for the Netherlands, what number would you feel is a good baseline of "free before the wealth tax kicks in"? It's fair that when the number was set, the cost of living was probably much less.

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u/gastro_psychic 1d ago

Ah, gotcha.

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u/CryptoNoob546 1d ago

You assume our government will take that money and actually help people….

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u/Candid-Mycologist539 22h ago

You assume our government will take that money and actually help people….

Other countries and societies do it. America has done it in the past.

I know this much for certain: the wealth is NOT helping people where it is right now -- being hoarded by billionaires.

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u/Minimus-Maximus-69 21h ago

Economically speaking, the government almost HAS to help people. The worst thing the government could do is take that tax money and give it to rich people, which is just the status quo. If they wanted to use it to persecute people, they'd just do that anyway without the tax. If they spend the money inefficiently, they're still spending it which is providing stimulus to the economy. Government jobs are jobs and help the economy.

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u/presentation-chaude 1d ago

You won't get people to have that $1bn unless you incentivize innovation and wealth building. That's literally why our Western societies are so wealthy. This is not a zero sum game. Larry Page or Bill Gates didn't make billions by stealing from others. They made billions by building companies that create wealth. The gains in efficiency from Google, Windows and Office are HUGE.

Wealth building definitely IS a good thing for society.

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u/Candid-Mycologist539 21h ago

You won't get people to have that $1bn unless you incentivize innovation and wealth building.

Not true. A lot of people are motivated to improve society.

Larry Page or Bill Gates didn't make billions by stealing from others.

Hahahahahahahaha!!! TY for the laugh!

Wealth building definitely IS a good thing for society.

Yes. But wealth hoarding is not. Find me a society where wealth hoarding exists in a healthy society.

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u/presentation-chaude 20h ago

Not true. A lot of people are motivated to improve society.

Yeah, obviously works so well for countries like France. Where soooo much innovation takes place nowadays and a lot of high paying jobs are create... wait.

Hahahahahahahaha!!! TY for the laugh!

K.

Yes. But wealth hoarding is not. Find me a society where wealth hoarding exists in a healthy society.

The fucking western world.

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u/Carvj94 1d ago

Not if some people are allowed to escape all the risks. That just screws over everyone else. If the worry is that retirement accounts might be affected then they can simply be made an exception. If the worry is your average gambler losing some extra money them fuck em. They should be avoiding risky companies and high stakes bets.

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u/si329dsa9j329dj 1d ago

This is a delusional take even by reddit standards.

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u/Carvj94 1d ago

It's delusional to say investments shouldn't be a guarantee for rich people?

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u/si329dsa9j329dj 1d ago

Investments aren’t a guarantee for rich people, what are you talking about? Also, guess what stocks tend to be risky? Start ups. Guess who needs capital the most? Start ups.

Economies famously grow when you decide to encourage people to avoid “risky companies” (start ups) and therefore divert investment away from your country for the sole reason of “fuck them, i’m mad they have more than me and need to cry about it on Reddit to feel better”

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u/Carvj94 1d ago

Investments aren’t a guarantee for rich people, what are you talking about?

I was obviously exaggerating, but you're naive to think they don't legally have the deck stacked in their favor on top of having the raw money necessary to manipulate the market. The privilege of having investment firms give them special attention is a gigantic advantage by itself. You and I can only dabble in investing while the rich have people who can watch prices and headlines 24/7. They're "guaranteed" to make a profit investing like a casino is guaranteed to turn a profit.

Economies famously grow when you decide to encourage people to avoid “risky companies” (start ups) and therefore divert investment away from your country for the sole reason of “fuck them, i’m mad they have more than me and need to cry about it on Reddit to feel better”

Yea capitalism naturally ends in the destruction of small business for various reasons. That's why they should get tax incentives and grants paid for by big businesses that get an overwhelming majority of investments. Encouraging investment into small businesses doesn't help.

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u/planetaryabundance 1d ago

Is the idea here that only boomers own stock or something? lol…

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u/Own-Weakness-2247 1d ago

And do what? Park their money under their bed?

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u/Minimus-Maximus-69 21h ago

But they'll also owe less, because their wealth decreased.

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u/gastro_psychic 16h ago

They lost wealth because they had to sell some of their shares. And the government took money on top of that.

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u/rws247 1d ago

True, but most years the assumed rate of return was lower than your actual gains. And it helps discourage people from making overtly risky investments.

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u/Candid-Mycologist539 1d ago

If someone owns $100M in stocks and has to pay 2% on the top $50M in a losing year, I'm not gonna feel bad for them. I'm pretty sure they're still gonna be more okay than me or anyone I've ever met in my life.

This is the wealth tax proposed by Elizabeth Warren.

Oh, darn! You lost half your wealth, and now you're only worth $50M? Well, at least you don't have to pay the wealth tax!

Anywho...

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u/gastro_psychic 1d ago

What percentage of Dutch does this apply to?

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u/chmarti 1d ago

In the Netherlandsyou are taxed on amounts over 50,000 eur, not including the value of your primary residence. So it affects a much larger percentage of people here than Warren's proposed tax would in the US. I agree that when you have 50 million, a 2% or so wealth tax feels really reasonable.

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u/Candid-Mycologist539 1d ago

The original premise was that countries in general cannot tax the super wealthy because they will leave.

In the prior comment, everyone seemed all sad panda because sometimes the value of the stocks that the superwealthy own goes down.

I'm not gonna feel sad for someone who is still worth $50M.

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u/gastro_psychic 1d ago

I own ASML stock and I am sure a lot of folks in /r/netherlands do too. Owning stocks doesn’t make you super wealthy.

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u/Candid-Mycologist539 1d ago

I own ASML stock and I am sure a lot of folks in /r/netherlands do too. Owning stocks doesn’t make you super wealthy.

Agreed.

The tax I am talking about was a wealth tax proposed by American Senator Elizabeth Warren.

Under her plan, "You get the first $50M (in assets) for free," before the 2% tax kicks in.

So, if you are a multimillionaire worth $50,000,010, your tax burden for the wealth tax would be 20 cents.

But in America, it is wrong to tax the wealthy, so, of course, this bill has gone nowhere.

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u/gastro_psychic 1d ago

Ah okay. Sorry.

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u/SpeciousSophist 1d ago

Sure, because in a court of law “i just dont care how this effects other people” is a totally reasonable take

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u/Candid-Mycologist539 22h ago

Sure, because in a court of law “i just dont care how this effects other people” is a totally reasonable take

This is your opinion on my comment about my lack of compassion for a multimillionaire who has to pay taxes...but is still worth $50M+. I'm pretty sure the multimillionaire will be fine.

However, is it an acceptable take to say, "I just don't care how this affects other people," when poor people are affected by the law? Because we got a whole lotta that going on right now in American society...and the poor are NOT fine.

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u/[deleted] 1d ago

[deleted]

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u/presentation-chaude 23h ago

Sell to whom, exactly? People who could afford to buy would be... selling theirs.

Jealousy is no basis for lawmaking. It runs countries to the ground.