Average Americans Pay Tax on Half of Their Wealth, Shouldn’t Rich Americans?
Cold Mountain TrailParticipant
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Might the United States, home to the world’s wealthiest people, sometime soon sport a tax on wealth? Media outlets the nation over have begunspeculating on just that question. But many of these reflections are missing the point: The United States already has a wealth tax.
We call this already existing levy the “property tax,” and almost all Americans feel its pinch — with one exception. The rich. America’s current “wealth tax” only taxes the category of wealth that makes up the bulk of the net worth of average Americans. The financial assets that make up the bulk of wealthy people’s net worth — stocks and bonds, for instance — face no wealth tax…
The richer the rich person, the smaller the share of net worth that comes from owning real estate. Case in point: Larry Ellison, the high-tech billionaire the Wall Street Journal has tagged the “nation’s most avid trophy-home buyer….” But even Ellison, the ultimate billionaire real estate junkie, faces property tax on only a small share of his overall fortune. Researchers at Bloomberg estimate the total Ellison fortune at just under $81 billion, with the vast bulk of that coming from his shareholdings in Oracle and Tesla. If we put the current value of his real estate holdings at a generous $6 billion — Ellison’s empire hasn’t released any exact figures — less than 8 percent of Ellison’s overall wealth would face an annual wealth tax…
Now let’s shift to the other end of the American wealth spectrum, to the poorest 50 percent of Americans. Taken as a group, the Federal Reserve calculates, these Americans own less real estate than America’s richest 1 percent, $3.85 trillion of taxable property compared to the $4.48 trillion-worth that the ultra-rich hold. But this $3.85 trillion in taxable property makes up most of the assets — 52 percent — that America’s poorer half holds. So we have a situation where America’s bottom half pays an annual wealth tax on over half its wealth and America’s top 1 percent pays no annual tax on almost 90 percent of its wealth…and property-less poorer Americans (renters) are, in effect, paying annual wealth tax on property other people hold the title on…
Americans between the lofty top 1 percent and the struggling bottom 50 percent? These Americans also face much more tax on their wealth than America’s rich….
March 3, 2021 at 6:21 AM #407846snotParticipant
- Total Posts: 1,179
that real property taxes are a terrible way to finance public schools.
In general, we don’t tax the rich nearly enough; but/and there are also a lot of ways in which the current taxation structure is irrational.
Destruction is easy; creation is hard, but more interesting.
March 3, 2021 at 2:28 PM #407880GZeusHParticipant
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And if they did, so many useful programs would be possible, like UBI. Why, we might even be able to afford programs that actually save money, like Medicare4All.
Corporate America consists of totalitarian entities laser-focused on short-term greed.
March 3, 2021 at 2:50 PM #407887
March 3, 2021 at 4:02 PM #407897zookaParticipant
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…paid by everyone, even renters, so they fall even more disproportionately on the poor, as the article emphasizes. And as I’ve said for years, funding schools through regressive taxes on poor people makes for shitty schools and poorer people.
I don’t think a wealth tax of any significance is going to pass (but it at least needs to be discussed). Because the super-wealthy don’t want it and they have too much wealth for us to counter them! Illinois couldn’t pass a progressive income tax, because rich people paid to convince everyone else that their taxes would go up too. Even very educated people I talk to don’t have a real grasp of just how much even half a billion is. Historically, we had a “maximum wage” in the US, enforced with 70-90% marginal tax rate. Regardless of how the money was made (something real or financial shenanigans), the gains were shared with all. Not any more, despite the financial shenanigans becoming a tsunami of theft from the rest of us.
Wealth concentration leads to bloody, violent revolution, after which most of the same bastards will still be wealthy! We’ll have one global government, digital currency, taxation under threat of “cancellation” for us and the “digital” tax havens for them.
March 3, 2021 at 4:16 PM #407902salemcourtParticipant
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Will reduce the property tax burden on the rich even more. Currently, they cannot deduct their property taxes from the Federal taxes. Primary reason why most of the big businesses with lots of high-value property (particularly the big tech in Silicon valley) went against Trump in the last election.
March 3, 2021 at 4:28 PM #407905Babel 17Participant
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We might need to just assess it every year, and after allowing for inflation take a big chunk of how much it grew. Let them maintain their incentive to invest, but keep the taxing as simple as possible.
Congress loves to tinker with the tax laws though, and thousands of jobs depend on their continuing to do so every year. And of course that power to amend tax regulations is a cause of political donations. So we’d need some pretty special legislation in order for a wealth tax to stick, and then last.
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