Wealth Tax

[baggieal]

The problem with taxing wealth instead of income is that the two do not necessarily go hand in hand, For example, a farmer may have millions of dollars of wealth tied up in the land and equipment but very little income due to a bad harvest etc. So it's not a very efficient way of taxing people, which is why governments have traditionally shied away from taxing wealth as such. It may seem like a great idea to tax the Bill Gates of the world 1% of his wealth especially when you compare his wealth to the average person who owns a modest house and has a modest job. But to put it into perspective, in the United States if you did of 100% wealth tax on the top 1%, in other words you literally confiscated all of their wealth, the US government would not collect enough money to pay the interest on the national debt. The way our modern democracies are run, by far the biggest billionaire is the government and the debt that the government inevitably runs up trying to be all things to all people. Ultimately, governments have to reduce spending if they want to stay afloat because you cannot keep borrowing and taxing forever especially when they overspend during a crisis such as a war or a pandemic. If you remember the financial crisis in Britain in the 1970s, that was directly related to the debt arising out of World War II which successive governments tried to tax out of existence but which slowed the economy down so much that unemployment started rising, government outlays started rising but government revenues actually declined. Whatever you may think of Margaret Thatcher and her method of governing, you cannot but help notice the fact that when she dramatically cut income taxes, the economy picked up and the government actually collected way more revenue. So wealth taxes are one of those ideas that may seem like a no-brainer but may not actually work in practice, you may not collect as much as you think you're going to collect and even if you can collect it, there will be almost certainly a corresponding reduction in the amount of investment because those wealthy people will have to liquidate investments in order to pay the tax thereby slowing down the economy and reducing the income tax revenues. It's not a simple fix by any means and may backfire badly. Just sayin!

Good points there! It would be very easy too so assets are tied up in property/companies etc to get around any tax of this type!