[seanhly]

> It's clear that politicians don't get this from the way they talk about a "mere 1%" wealth tax. None of them would speak of adding a "mere 20%" to the income tax rate, even though that's mathematically the same thing. [2]

But it's not "mathematically the same thing". Taking the 100 dollars allegory Paul raises, for that allegory to be based in reality, someone would need to have 20x their annual salary in wealth. The median salary in the US is 59K per annum. For the 100 dollars allegory to work out to a 20% income tax equivalence, people would need to have just over a million dollars sitting in their bank account. The average American net worth is more like 48K (being generous), which is under a year's salary, with a tonne of people also just living permanently in debt (negative wealth). Interestingly, would a wealth tax mean negative tax (free money) for those many in America living in debt?

[munch117]

The fatal flaw in PG's argument is that is doesn't mention spending at all.

If you're spending your entire income on things like food and rent, then a 1% wealth tax corresponds to 0% income tax.

If you're spending your entire income on investment, then there's a calculation like PG's to be made to compute an equivalent income tax rate. But then we're talking about someone who doesn't need the money. This isn't even about rich vs. poor - you can have a high income and spend it all as you make it, like if you throw a huge party every week, or make a yearly trip into space. But if not, then it's just an ever growing number on your bank statement, and the only reason you care about it being 20% higher is because you're comparing it to other people's bank statements.