Reddittors vs Wall Street

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Herainestold
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Re: Reddittors vs Wall Street

Post by Herainestold » Fri Feb 05, 2021 2:11 pm

You could only tax financial assets or houses above a certain value or size.

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Woodchopper
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Re: Reddittors vs Wall Street

Post by Woodchopper » Fri Feb 05, 2021 2:25 pm

jimbob wrote:
Fri Feb 05, 2021 8:53 am
Woodchopper wrote:
Thu Feb 04, 2021 12:36 pm
lpm wrote:
Thu Feb 04, 2021 12:26 pm
In the US personal insolvency rates are even higher due to medical debts.
Yes, big difference there as people who aren't insured and are unlucky can very quickly end up with tens or hundreds of thousands of dollars in medical debt.

That said personal bankruptcy is even easier in the US. So its not like people are saddled with the debt for a lifetime. Though their credit rating gets f.cked.
I don't have up to date information, but did get into an email correspondence with Dr Deborah Thorne who was a coauthor on one paper that estimated that 75% of medical bankruptcies in the US were for people who had had insurance at the start of their illness.
Fair enough, so people become bankrupt because they're unlucky.

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discovolante
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Re: Reddittors vs Wall Street

Post by discovolante » Fri Feb 05, 2021 2:47 pm

dyqik wrote:
Fri Feb 05, 2021 1:41 pm
Martin Y wrote:
Fri Feb 05, 2021 1:13 pm
Ah. I seem to have had a wildly wrong notion of what "wealth" might mean in this context.
You could impose an n% tax on the net assets of the entire population, but that would get really messy around mortgages and people having to give up houses to pay the tax. Not to mention that it could crash house prices, leaving vast swathes of the population in net debt and so not paying the tax anyway, and you having to spend money to sort out who owes taxes now.

Which is why a threshold is sensible.

The other net asset that has to be considered are retirement investments, btw, which are probably the biggest non-property assets for big lump of the population.
They do contemplate a fairly low threshold (more for the purposes of discussing how it would work rather than as a recommendation), and in particular - I think.in the q and a - make some reference to a fairly-but-not-too-low threshold biting more in the south east of England than anywhere else. As I mentioned above, they suggested strategies e.g. payment over a period of time to cover the tax. I can't actually remember what they said about things like payment upon death and sale of the estate, I might be wrong but I think they were a touch vague on this point and perhaps suggested it could be considered but fairly strictly limited to avoid people tax dodging. Same with full deferral of payment for a specific period in general I think.

The actual website of the commission is here: https://www.ukwealth.tax/ which I confess to not having looked at. It has an FAQ though.
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plodder
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Re: Reddittors vs Wall Street

Post by plodder » Fri Feb 05, 2021 2:59 pm

Woodchopper wrote:
Fri Feb 05, 2021 2:25 pm
jimbob wrote:
Fri Feb 05, 2021 8:53 am


I don't have up to date information, but did get into an email correspondence with Dr Deborah Thorne who was a coauthor on one paper that estimated that 75% of medical bankruptcies in the US were for people who had had insurance at the start of their illness.
Fair enough, so people become bankrupt because they're unlucky.
Would need wider context, but it could also be because medical insurance is stingy.

Also, ill people are by definition unlucky.

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Re: Reddittors vs Wall Street

Post by jimbob » Fri Feb 05, 2021 3:01 pm

Woodchopper wrote:
Fri Feb 05, 2021 2:25 pm
jimbob wrote:
Fri Feb 05, 2021 8:53 am
Woodchopper wrote:
Thu Feb 04, 2021 12:36 pm


Yes, big difference there as people who aren't insured and are unlucky can very quickly end up with tens or hundreds of thousands of dollars in medical debt.

That said personal bankruptcy is even easier in the US. So its not like people are saddled with the debt for a lifetime. Though their credit rating gets f.cked.
I don't have up to date information, but did get into an email correspondence with Dr Deborah Thorne who was a coauthor on one paper that estimated that 75% of medical bankruptcies in the US were for people who had had insurance at the start of their illness.
Fair enough, so people become bankrupt because they're unlucky.
See also the US DoJ report into use of fines in Fergusson
PDF https://www.justice.gov/sites/default/f ... report.pdf

The revenue-collection approaches were eye-watering.

I have previously tried quoting bits, but gave up as I'd be quoating about 90 pages of utterly shocking practices - and Fergusson's disparity index d=for vehicle stops was actually *better* than the Missouri average. So there's nothing to suggest it was a outlier amongst the several thousand police forces with fewer than a hundred officers.
Have you considered stupidity as an explanation

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Martin Y
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Re: Reddittors vs Wall Street

Post by Martin Y » Fri Feb 05, 2021 3:20 pm

Herainestold wrote:
Fri Feb 05, 2021 2:11 pm
You could only tax financial assets or houses above a certain value or size.
That doesn't solve the conundrum, it just limits the pain to people most of us don't know and don't sympathise with because they have nicer houses than us.

Reminiscent of what happened to "the stately homes of England" with astronomical death duties which meant you basically had little chance of inheriting the big house unless you still had lots of other stuff to sell. I don't know the politics behind how that came about but it struck me as odd that the people I think of as the ruling classes allowed the death of their own way of life through parliament.

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Re: Reddittors vs Wall Street

Post by jdc » Fri Feb 05, 2021 5:24 pm

discovolante wrote:
Fri Feb 05, 2021 2:47 pm
dyqik wrote:
Fri Feb 05, 2021 1:41 pm
Martin Y wrote:
Fri Feb 05, 2021 1:13 pm
Ah. I seem to have had a wildly wrong notion of what "wealth" might mean in this context.
You could impose an n% tax on the net assets of the entire population, but that would get really messy around mortgages and people having to give up houses to pay the tax. Not to mention that it could crash house prices, leaving vast swathes of the population in net debt and so not paying the tax anyway, and you having to spend money to sort out who owes taxes now.

Which is why a threshold is sensible.

The other net asset that has to be considered are retirement investments, btw, which are probably the biggest non-property assets for big lump of the population.
They do contemplate a fairly low threshold (more for the purposes of discussing how it would work rather than as a recommendation), and in particular - I think.in the q and a - make some reference to a fairly-but-not-too-low threshold biting more in the south east of England than anywhere else. As I mentioned above, they suggested strategies e.g. payment over a period of time to cover the tax. I can't actually remember what they said about things like payment upon death and sale of the estate, I might be wrong but I think they were a touch vague on this point and perhaps suggested it could be considered but fairly strictly limited to avoid people tax dodging. Same with full deferral of payment for a specific period in general I think.

The actual website of the commission is here: https://www.ukwealth.tax/ which I confess to not having looked at. It has an FAQ though.
From that FAQ:
It would only apply to the wealth that an individual owns above the threshold.

‘Wealth’ would be defined to cover all assets (including homes and pensions) but minus any debts such as mortgages.

Our report does not make any recommendations on thresholds or rates because these issues must be decided by politicians. Our own preferences on these issues carry no special weight, and since we don’t agree amongst ourselves it would not be possible for us to offer a collective view on this anyway!
Their illustrative examples appear on p8 (250k to 10m). Figures I've seen proposed elsewhere seem to be for a kind of 'super wealth tax', with discussion of higher thresholds and higher tax rates e.g.
...Piketty’s proposed 90 per cent tax on wealth over $1 billion. Even Sanders, who favours a wealth tax on the US’s top 0.1 per cent (meaning every married couple with $32 million and up) only suggests a top rate of eight per cent on wealth over $10 billion.

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Re: Reddittors vs Wall Street

Post by jdc » Fri Feb 05, 2021 5:31 pm

Martin Y wrote:
Fri Feb 05, 2021 3:20 pm
Herainestold wrote:
Fri Feb 05, 2021 2:11 pm
You could only tax financial assets or houses above a certain value or size.
That doesn't solve the conundrum, it just limits the pain to people most of us don't know and don't sympathise with because they have nicer houses than us.

Reminiscent of what happened to "the stately homes of England" with astronomical death duties which meant you basically had little chance of inheriting the big house unless you still had lots of other stuff to sell. I don't know the politics behind how that came about but it struck me as odd that the people I think of as the ruling classes allowed the death of their own way of life through parliament.
Might not have been their way of life so much as their sibling's?
the one significant legacy of the government was the introduction of a high uniform rate of death duties in Harcourt's 1894 budget. Harcourt himself was a second son, and thus unlikely to ever have to pay such duties himself, so it was often quipped that this introduction was a "second son's revenge".
[Harcourt actually inherited the estate when his brother died so if it was meant to be a second son's revenge he f.cked it.]

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Re: Reddittors vs Wall Street

Post by dyqik » Fri Feb 05, 2021 5:44 pm

Martin Y wrote:
Fri Feb 05, 2021 3:20 pm
Herainestold wrote:
Fri Feb 05, 2021 2:11 pm
You could only tax financial assets or houses above a certain value or size.
That doesn't solve the conundrum, it just limits the pain to people most of us don't know and don't sympathise with because they have nicer houses than us.
That's the point of a wealth tax. To tax accrued wealth of the wealthy and use it to provide for the country as a whole. Of course, even after the tax, the rich people paying it will still have more than the people not paying it. So, yes, I do want the "pain" of still being richer than poor people to fall on them.

If you object to rich people paying more than poor people, then you're against most taxes except poll tax type things
Last edited by dyqik on Fri Feb 05, 2021 5:47 pm, edited 1 time in total.

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discovolante
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Re: Reddittors vs Wall Street

Post by discovolante » Fri Feb 05, 2021 5:47 pm

jdc wrote:
Fri Feb 05, 2021 5:24 pm
discovolante wrote:
Fri Feb 05, 2021 2:47 pm
dyqik wrote:
Fri Feb 05, 2021 1:41 pm

You could impose an n% tax on the net assets of the entire population, but that would get really messy around mortgages and people having to give up houses to pay the tax. Not to mention that it could crash house prices, leaving vast swathes of the population in net debt and so not paying the tax anyway, and you having to spend money to sort out who owes taxes now.

Which is why a threshold is sensible.

The other net asset that has to be considered are retirement investments, btw, which are probably the biggest non-property assets for big lump of the population.
They do contemplate a fairly low threshold (more for the purposes of discussing how it would work rather than as a recommendation), and in particular - I think.in the q and a - make some reference to a fairly-but-not-too-low threshold biting more in the south east of England than anywhere else. As I mentioned above, they suggested strategies e.g. payment over a period of time to cover the tax. I can't actually remember what they said about things like payment upon death and sale of the estate, I might be wrong but I think they were a touch vague on this point and perhaps suggested it could be considered but fairly strictly limited to avoid people tax dodging. Same with full deferral of payment for a specific period in general I think.

The actual website of the commission is here: https://www.ukwealth.tax/ which I confess to not having looked at. It has an FAQ though.
From that FAQ:
It would only apply to the wealth that an individual owns above the threshold.

‘Wealth’ would be defined to cover all assets (including homes and pensions) but minus any debts such as mortgages.

Our report does not make any recommendations on thresholds or rates because these issues must be decided by politicians. Our own preferences on these issues carry no special weight, and since we don’t agree amongst ourselves it would not be possible for us to offer a collective view on this anyway!
Their illustrative examples appear on p8 (250k to 10m). Figures I've seen proposed elsewhere seem to be for a kind of 'super wealth tax', with discussion of higher thresholds and higher tax rates e.g.
...Piketty’s proposed 90 per cent tax on wealth over $1 billion. Even Sanders, who favours a wealth tax on the US’s top 0.1 per cent (meaning every married couple with $32 million and up) only suggests a top rate of eight per cent on wealth over $10 billion.
Thanks. Yes, I didn't expect everyone to listen to a 90 minute long podcast, but it was a bit naive of me to assume people wouldn't speculate about its content without doing so.

I don't think all of the suggestions they make address all of the possible drawbacks fully, but they claim to have acted within their remit. I don't think it's claimed to be a perfect solution, just a better one than the others, which is probably a reasonable way to assess it, and it would be good to hear any reasoned arguments that disagree with that. I'm not entirely sure of the viability of managing to get the details of everyone's wealth, although they do account for that by factoring a c. 10% loss and argue that it's easier to do it just once rather than every year.
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Herainestold
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Re: Reddittors vs Wall Street

Post by Herainestold » Fri Feb 05, 2021 6:44 pm

dyqik wrote:
Fri Feb 05, 2021 5:44 pm
Martin Y wrote:
Fri Feb 05, 2021 3:20 pm
Herainestold wrote:
Fri Feb 05, 2021 2:11 pm
You could only tax financial assets or houses above a certain value or size.
That doesn't solve the conundrum, it just limits the pain to people most of us don't know and don't sympathise with because they have nicer houses than us.
That's the point of a wealth tax. To tax accrued wealth of the wealthy and use it to provide for the country as a whole. Of course, even after the tax, the rich people paying it will still have more than the people not paying it. So, yes, I do want the "pain" of still being richer than poor people to fall on them.

If you object to rich people paying more than poor people, then you're against most taxes except poll tax type things
If you taxed Jeff Bezos' $200 billion at 90 %, he'd still have $20 billion, which is more than the GDP of many poor countries.

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Martin Y
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Re: Reddittors vs Wall Street

Post by Martin Y » Fri Feb 05, 2021 6:53 pm

So all we need is a regular supply of Jeff Bezoses to tax.

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Re: Reddittors vs Wall Street

Post by jdc » Fri Feb 05, 2021 6:59 pm

Martin Y wrote:
Fri Feb 05, 2021 6:53 pm
So all we need is a regular supply of Jeff Bezoses to tax.
Bit surprised you're proposing an annual wealth tax. Even Bernie only proposed a one-off 60% tax on wealth gains made by billionaires between March 18, 2020, and Jan. 1, 2021. (We've seen $731 billion in wealth accumulated by 467 billionaires since March 18, apparently.)

You're pretty radical Martin.

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Re: Reddittors vs Wall Street

Post by Herainestold » Fri Feb 05, 2021 7:00 pm

Martin Y wrote:
Fri Feb 05, 2021 6:53 pm
So all we need is a regular supply of Jeff Bezoses to tax.
We really need to get hold of Putin's cash.

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Martin Y
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Re: Reddittors vs Wall Street

Post by Martin Y » Fri Feb 05, 2021 7:00 pm

I don't have any problem with progressive taxation, I just think that a one-off wealth tax, wherever you set its threshold, is going to raise fairness conundrums like how to compare an old couple who bought a house that eventually quadrupled in value with another couple whose house only doubled in value and yet another couple who spent their money on foreign holidays instead.

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Martin Y
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Re: Reddittors vs Wall Street

Post by Martin Y » Fri Feb 05, 2021 7:01 pm

jdc wrote:
Fri Feb 05, 2021 6:59 pm
Bit surprised you're proposing an annual wealth tax.
It's not, it's a one-off tax applied to a different Jeff Bezos each year.

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discovolante
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Re: Reddittors vs Wall Street

Post by discovolante » Fri Feb 05, 2021 7:05 pm

What other ways of raising tax are fairer?
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Re: Reddittors vs Wall Street

Post by Herainestold » Fri Feb 05, 2021 7:49 pm

Martin Y wrote:
Fri Feb 05, 2021 7:01 pm
jdc wrote:
Fri Feb 05, 2021 6:59 pm
Bit surprised you're proposing an annual wealth tax.
It's not, it's a one-off tax applied to a different Jeff Bezos each year.
You do Jeff Bezos, you do Elon Musk, Bill Gates, the Kochs, Bloomberg, et. al.
Eventually there will be a disincentive to hoarding huge wealth, and money will stay in the economy of ordinary people who toil for a living.

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Re: Reddittors vs Wall Street

Post by dyqik » Fri Feb 05, 2021 8:02 pm

Martin Y wrote:
Fri Feb 05, 2021 7:00 pm
I don't have any problem with progressive taxation, I just think that a one-off wealth tax, wherever you set its threshold, is going to raise fairness conundrums like how to compare an old couple who bought a house that eventually quadrupled in value with another couple whose house only doubled in value and yet another couple who spent their money on foreign holidays instead.
No one has proposed a wealth tax that would make that a problem that needs to be solved.

For the last part, one reason for a wealth tax is to encourage people to spend money, so that's the intended outcome. The idea is that money spent goes to people providing the services being provided.

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Re: Reddittors vs Wall Street

Post by Bird on a Fire » Fri Feb 05, 2021 9:16 pm

An old couple with a £100 million pound house and not enough savings to pay the tax would have to move out if it into, say, a £10 million house.

Excuse me while I look for my teeny-tiny violin.
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Re: Reddittors vs Wall Street

Post by dyqik » Fri Feb 05, 2021 9:21 pm

Bird on a Fire wrote:
Fri Feb 05, 2021 9:16 pm
An old couple with a £100 million pound house and not enough savings to pay the tax would have to move out if it into, say, a £10 million house.

Excuse me while I look for my teeny-tiny violin.
And even if it kicked in at £100k, it's overwhelmingly likely that primary residences would be exempted or otherwise treated differently - as is done with capital gains taxes and inheritance taxes.

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Re: Reddittors vs Wall Street

Post by Bird on a Fire » Fri Feb 05, 2021 9:27 pm

dyqik wrote:
Fri Feb 05, 2021 9:21 pm
Bird on a Fire wrote:
Fri Feb 05, 2021 9:16 pm
An old couple with a £100 million pound house and not enough savings to pay the tax would have to move out if it into, say, a £10 million house.

Excuse me while I look for my teeny-tiny violin.
And even if it kicked in at £100k, it's overwhelmingly likely that primary residences would be exempted or otherwise treated differently - as is done with capital gains taxes and inheritance taxes.
Yes, it's not a particularly difficult problem to solve and of course the people who've already been thinking about it have also already solved it.
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Re: Reddittors vs Wall Street

Post by jdc » Fri Feb 05, 2021 10:26 pm

Martin Y wrote:
Fri Feb 05, 2021 7:00 pm
I don't have any problem with progressive taxation, I just think that a one-off wealth tax, wherever you set its threshold, is going to raise fairness conundrums like how to compare an old couple who bought a house that eventually quadrupled in value with another couple whose house only doubled in value and yet another couple who spent their money on foreign holidays instead.
Couple A got very lucky with the housing market, couple B got lucky. Why should people get to keep all the money they've made through luck? We take a big slice of the money people have earned through hard work so why not take a tiny sliver of the money people have made by simply sitting in a house watching its value increase?

Couple C don't have to pay the wealth tax because instead of hoarding it, they've recirculated their cash already. It's gone to travel agents, shopkeepers, restaurants, and HM Gov (in the form of VAT - though I believe that's only the case for the dinners, baubles, and EU holidays as non-EU hols are zero-rated). VAT rates are higher than any proposed wealth tax rates I've seen and there's no threshold so we've hit C good and hard already. Why should C be taxed both on the money they earn and the money they spend while A & B were only taxed on the money they earned and not on the money they've hoarded?

Unless A & B's houses are worth millions, I'm guessing they didn't pay stamp duty on the original purchase price before the value doubled or trebled.

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Re: Reddittors vs Wall Street

Post by Millennie Al » Sat Feb 06, 2021 4:43 am

plodder wrote:
Fri Feb 05, 2021 7:47 am
Millennie Al wrote:
Fri Feb 05, 2021 4:17 am
discovolante wrote:
Thu Feb 04, 2021 4:27 pm
Specifically, the speakers recommend a one off wealth tax
The speakers sound like they're a bit lacking in knowledge of human nature. There's no such thing as a successful one-off tax as if it is successful it gets repeated. A good example of this is income tax which was introduced as an exceptional measure to finance war and quickly got the government addicted so that despite attempts to get rid of it, it kept returning and we're now stuck with it.
A bad example is Gordon Brown’s windfall tax on private utilities, which happened once.
It's a bit soon to make that judgement, but it certainly has been proposed to to something similar again and one proposal was in the Labour manifesto in 2019 so it seems highly likely that it will get repeated eventually.
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Re: Reddittors vs Wall Street

Post by Millennie Al » Sat Feb 06, 2021 4:50 am

Herainestold wrote:
Fri Feb 05, 2021 7:49 pm
You do Jeff Bezos, you do Elon Musk, Bill Gates, the Kochs, Bloomberg, et. al.
Eventually there will be a disincentive to hoarding huge wealth, and money will stay in the economy of ordinary people who toil for a living.
Where do you think the wealth of these people currently is? Do they each have a huge pit at home filled with gold coins that they sleep on?
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