8 votes

Taxing consumption progressively is a better way to tax the wealthy

7 comments

  1. [6]
    vord
    (edited )
    Link
    I feel like this premise is flawed. Having the wealthy sell off excess assets leaves room for less-wealthy individuals to purchase it, and prevent this perpetual accumulation of wealth by one...

    Further, some taxpayers may not have the cash on hand to pay the tax without liquidating (selling off) certain assets. Taxpayers with a high net worth would be encouraged to consume their wealth instead of using it productively, depriving the federal government of revenue and reducing economic growth.

    I feel like this premise is flawed. Having the wealthy sell off excess assets leaves room for less-wealthy individuals to purchase it, and prevent this perpetual accumulation of wealth by one individual/family.

    Consuming the wealth means the money will be redistributed to the rest of the economy instead of sitting in bank accounts and assets. Some of that will go to workers, which as Propublica noted, get taxed at 100x the wealthy currently.

    If every dollar represents a fraction of humanity's resources, hoarding it while others have none is immoral. The best currency is one being rapidly circulated.

    13 votes
    1. [5]
      skybrian
      Link Parent
      Yes, I’m also skeptical, though for different reasons. Don’t let macroeconomic abstraction fool you, we have to look at what’s going on materially. Money is universally useful but that’s...

      Yes, I’m also skeptical, though for different reasons.

      Don’t let macroeconomic abstraction fool you, we have to look at what’s going on materially. Money is universally useful but that’s misleading if you’re looking at supply bottlenecks, which are about specific things like lumber and computer chips that aren’t interchangeable. Similarly, many forms of labor require specialized training so you can have a shortage of nurses and unemployment for others, as we saw during the pandemic.

      So the argument is that if there are more workers building mansions or yachts then that’s less labor (and similarly for other inputs like wood) available for other purposes., but I’m skeptical of this because I’m not sure how much they compete.

      On the other hand, gentrification is all about wealthier people outspending others on real estate, and where does the lumber shortage come from if not relatively affluent people deciding to spend money on various projects, instead of holding off?

      One thing we have learned repeatedly in the couple of years is that supply chains aren’t as flexible as we previously assumed, in the short term anyway.

      6 votes
      1. [3]
        Comment deleted by author
        Link Parent
        1. [2]
          skybrian
          Link Parent
          Yes, I largely agree, adjusting to the pandemic was a lot of work by a lot of people and we should celebrate the successes. And I'm doing fine as well. But we have been repeatedly informed of...

          Yes, I largely agree, adjusting to the pandemic was a lot of work by a lot of people and we should celebrate the successes. And I'm doing fine as well. But we have been repeatedly informed of other people suffering due to business closures, unemployment and the like during the pandemic (not to mention inadequate production and distribution of vaccines, etc) and I'm not sure that "we're doing fine" is an adequate response to the scale of necessary adjustment and disaster response. Even if it's true that most of us got through it on average, averages hide a lot, and there is also survivor bias.

          5 votes
          1. Micycle_the_Bichael
            Link Parent
            Anecdotal support of this: the groupchat for my mutual aid usually had 4-5 emergency "I need help now" texts a month (help affording food, major housing issues like paying rent or damaged roof,...

            Anecdotal support of this: the groupchat for my mutual aid usually had 4-5 emergency "I need help now" texts a month (help affording food, major housing issues like paying rent or damaged roof, etc) that we would share the burden across all of us and/or donations. I'm now running to stores for food and hardware supplies (we've had some really bad storms as of late causing lots of damage) 1-2 times a week rather than once a month and for people who have never asked us for help before. It is still really rough out there.

            2 votes
      2. [2]
        vord
        Link Parent
        What's to say that wealth must be consumed selfishly? According to the pro-charity folks, they could just abandon all that money, dumping into charitable causes. Ideally ones not managed by...

        What's to say that wealth must be consumed selfishly?

        According to the pro-charity folks, they could just abandon all that money, dumping into charitable causes. Ideally ones not managed by themselves. Why they don't do so at the same rate now is an excersize left to the reader,

        There's an endless supply of money sinks. Motivation to unload wealth into them is a good thing.

        4 votes
        1. skybrian
          Link Parent
          I think that depends on what they spend it on, which can't be judged in the abstract, and may be controversial even with specific examples. Is Blue Origin a good or bad thing? How about owning the...

          I think that depends on what they spend it on, which can't be judged in the abstract, and may be controversial even with specific examples. Is Blue Origin a good or bad thing? How about owning the Washington Post or a sports team?

          You could say, well, sports teams exist and some entity needs to own them.

          2 votes