| > This is an appealing idea, but it comes at the expense of even further reducing taxes that are typically paid by wealthy people. It is in theory, but in practice it's already avoided in a thousand ways. The first is, of course, by just not selling the shares in whatever you hold right now, which is the perverse incentive we're trying to fix. Then there are the outright avoidance strategies, like foreign holding companies in jurisdictions with different tax laws, and even the fully intentional ones, like tax-deferred retirement accounts. > I think we'd need to bundle it with a serious revision of estate taxes and the various schemes people use to get around them. Combining this with the removal of the step up in basis on inheritance would basically do it, and would remove a major justification for keeping that -- it exists in large part to allow the heirs to sell the asset instead of being coerced by tax incentives into investing into whatever their parents did, i.e. the same thing we're trying to fix here. This way the heirs could sell the asset and buy another one without a taxable event, but don't get a basis reset. So if they want to spend the money, they have to pay the tax. Of course, the even simpler version of this is to just eliminate income taxes in general and use a consumption tax, then make it progressive by adding a UBI. But maybe one step at a time. |