[dijit]

Enormously popular doesn’t mean right.

You should tax behaviours you want to disincentivise.

Taxing smoking, cars and sugar are great (but not always popular) ideas.

Taxing second homes, property ownership for companies, foreign owned property, and so on is much more important than taxing unrealised wealth, inheritance or capital gains and income.

Wealthy people find loopholes, and so you end up taxing the middle class and limiting social mobility with those initiatives.

We should figure out what they do with their wealth that makes it worthwhile amassing so much, then tax that.

EDIT: sorry, I should have echo’d the chamber instead of thinking about a situation critically.

[scoofy]

The wealthy find loopholes because they are often the people having the legislation drafted. It’s actually not hard to pass clear solid tax laws. It’s only hard to get it passed.

[SimianSci]

I want to disincentivise people with wealth using it to corrupt systems of power into doing what they want.

> Wealthy people find loopholes, and so you end up taxing the middle class and limiting social mobility with those initiatives.

Sounds like we should get rid of these wealthy people then...

[dijit]

Let me know when you find a way that makes sense.

I’m a socialist, but I have a brain.

Anything you can think of to make wealthy people cease to exist is easily bypassed, so the best way is to find ways to tax behaviour instead.

The point of money is how you use it, if you have a 50,000x tax on super yacts and private aircraft, then the ultra rich are forced to pay your tax or try skirting around it by using smaller boats or coalescing their private jets into a private airline.

But if you tax stocks, then people will invest in other ways. If you tax individuals owning large property then they’ll move their property ownership into a company, if you tax inheritance then they’ll put the money into a fund instead which has debts that will be written off in time. All kinds of fancy tricky accounting.

The other solution is to tax everyone on unrealised gains, which makes every home owner (including pensioners) suddenly liable for huge ongoing bills.

Elon himself for example is pretty cash poor, but owns a lot of stock in a “high value” company meaning his wealth on paper is pretty extreme. He takes on debt (which has no income tax) and then pays it off with stocks, where it also avoids being taxed as its never realised.

I think its a harder problem than you give it credit.

[eszed]

How would it work if we treated money obtained by borrowing against stock holdings as "realized gains"? That seems like a loophole that could be closed.

[dijit]

whats the difference with a mortgage then, a securities backed loan.

[heisenzombie]

Well nothing, I think what is being proposed is to trigger existing capital gains taxes when an asset is borrowed against, the same as if it were sold. Most places exempt personal homes from capital gains taxes already, so it wouldn’t affect them. It would affect

- someone who bought an investment property, which then appreciated, and then they wanted to take out a larger mortgage against the appreciated value to leverage it into buying another property.

- Someone borrowing against stock to avoid realising gains by selling it

That seems… reasonable to me?

[eszed]

Thank you. Yes, that's precisely what I mean. I've floated the same idea a few times on this forum and others. I've asked, but have yet to see someone point out a systemic downside. (I'm not any kind of financial sophisticate, so I'm well aware that I might be missing something!) In fact, it seems to me that having people finance their lifestyles by borrowing against assets adds a degree of leverage risk to the system, and ought to be discouraged just on that basis.

[throwawaysleep]

I think we should want to disincentivize any person from having too much power and wealth is power.