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income inequality debate

06deacon said:
This is not correct.

The things you’re mentioning like rich folks “hiding their shit” or whatever and beefing up the IRS is about hiding and discovering INCOME. No disagreement there.

Valuing WEALTH is entirely different. HNW folks won’t just have like piles of cash somewhere or even piles of stocks which are easy to value. I feel like folks are assuming it’ll just be as easy as ferreting out all these “hidden accounts” of cash to tax it. They will have ownership interests in private businesses or companies. To tax wealth you need to value these. To do this you need, among other things:
1. Timely audited financial statements whose numbers you can trust (which take lots of time and money to prepare). This would require an overnight transformation and beefing up of the public accounting industry.
2. Competently prepared valuations based on those financial statements and tons of unauditable assumptions such as growth projections, real estate valuations, etc. This will require an even larger overhaul of the valuation industry as well as the expertise needed at the IRS to challenge these valuations.

Not to mention all of the other types of assets that folks own. And the debt they hold. All of which need to be compiled into a personal financial statement...prepared by who? Gotta be able to trust the numbers so it can’t be self prepared. So you have another accountant who is like a general contractor to farm out all these valuations and compile a personal financial statement...by when? And as of what date, 12/31? By the time all this work gets done ten months from then you have tons of subsequent events that mhb mocked that are better information on those valuations you prepared that are now obsolete.

The best information on valuing any asset is when it’s transacted. Bought or sold. So jack up the taxes on the income or gain realized on those sales. That erases the need for pretty much all of that complication. And which is coincidentally the system we have now.

If it’s the system you want, you need to design something workable and acknowledge the challenges. You can’t just count your money and lash out when folks question the details and accuse them of being republicans or whatever.
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Yep
 
06deacon said:
This is not correct.

The things you’re mentioning like rich folks “hiding their shit” or whatever and beefing up the IRS is about hiding and discovering INCOME. No disagreement there.

Valuing WEALTH is entirely different. HNW folks won’t just have like piles of cash somewhere or even piles of stocks which are easy to value. I feel like folks are assuming it’ll just be as easy as ferreting out all these “hidden accounts” of cash to tax it. They will have ownership interests in private businesses or companies. To tax wealth you need to value these. To do this you need, among other things:
1. Timely audited financial statements whose numbers you can trust (which take lots of time and money to prepare). This would require an overnight transformation and beefing up of the public accounting industry.
2. Competently prepared valuations based on those financial statements and tons of unauditable assumptions such as growth projections, real estate valuations, etc. This will require an even larger overhaul of the valuation industry as well as the expertise needed at the IRS to challenge these valuations.

Not to mention all of the other types of assets that folks own. And the debt they hold. All of which need to be compiled into a personal financial statement...prepared by who? Gotta be able to trust the numbers so it can’t be self prepared. So you have another accountant who is like a general contractor to farm out all these valuations and compile a personal financial statement...by when? And as of what date, 12/31? By the time all this work gets done ten months from then you have tons of subsequent events that mhb mocked that are better information on those valuations you prepared that are now obsolete.

The best information on valuing any asset is when it’s transacted. Bought or sold. So jack up the taxes on the income or gain realized on those sales. That erases the need for pretty much all of that complication. And which is coincidentally the system we have now.

If it’s the system you want, you need to design something workable and acknowledge the challenges. You can’t just count your money and lash out when folks question the details and accuse them of being republicans or whatever.
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Who is not acknowledging the challenges? But you're not talking about a lot of people. As I said. You'd have to create regulations and beef up the IRS. You're not saying anything other people haven't already said, and it's not compelling at all. And the idea that people hide income but not wealth is asinine.

This started with a comment that a wealth tax is impossible. It's clearly not.
 
None of you have explained why we need to know wealth down to the cent at a given point in time as opposed to an estimate of wealth agreed upon by the IRS and the individual.
 
this started with Sig saying it would be insane to try to implement. That is true. That doesn't mean impossible.

All of what 06 described as to get to a wealth estimate. FMV of businesses are based on future expected cash flows which are estimates with some discount rate applied which is an estimate.
 
ChrisL68 said:
this started with Sig saying it would be insane to try to implement. That is true. That doesn't mean impossible.

All of what 06 described as to get to a wealth estimate. FMV of businesses are based on future expected cash flows which are estimates with some discount rate applied which is an estimate.
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That's a pretty detailed estimate. I'm saying that's not necessary unless someone really wants to do that.
 
Shooshmoo said:
Nothing any of you have said here makes the idea seem anywhere near insane.
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Yes, we have gathered that you don't appreciate the complexity and administrative burden of what is being discussed.
 
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If we tried this, Bermuda, the Bahamas, the Kaymans and Monaco, would get trillions of US wealth transferred there. You can't tax money that isn't here.
 
RJKarl said:
If we tried this, Bermuda, the Bahamas, the Kaymans and Monaco, would get trillions of US wealth transferred there. You can't tax money that isn't here.
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It’s what happened every time a wealth tax has tried to of been implemented in the past. I think like 14 countries have tried, all have been complete failures.

But yeah I’m sure this time it’ll work.
 
We've already been over why Warren's plan is different than the European plans and used their failures as a model for her plan. But, yeah, hard so why try to fix anything.
 
If you want to know the practical implications of implementing tax policy, ask a group of academic theorists.
 
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PhDeac said:
None of you have explained why we need to know wealth down to the cent at a given point in time as opposed to an estimate of wealth agreed upon by the IRS and the individual.
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Gives the government too much power. Vagueness leads to abuse.
 
To be clear I’m not arguing against the idea of a wealth tax, just a vague one. Whether it’s possible to come up with objective, measurable criteria that could roughly but fairly estimate a person’s wealth, I don’t know. Doesn’t seem like anyone has suggested such criteria yet.
 
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