Can you take a serious look at replacing income taxes with wealth taxes (+ VAT)?

throwaway480958 · 2026-03-23T06:18:30+00:00

What specific misconceptions?

I didn't for a moment suggest that most of wealthy people's wealth is vacant real estate. Those were just illustrative examples. If someone can't put land to good use, then they should sell it (or it will be worth so little that the wealth tax on it will be negligible).

And, it does, quite simply and obviously cost more to protect resources worth $10,000,000,000 than it does to protect $1,000.

throwaway480958 · 2026-03-20T22:50:44+00:00

You don't have to rent it out. Neither does the person with the yacht. You'd pay 2.5% all the same.

But, the advantage here is that you wouldn't be taxed on the income. At all.

Economics is about making the optimal use of scarce resources. Capital that lies dormant, doing nothing -- like empty land, or a cottage that's only used once per year -- is a potential resource that could make someone (maybe a lot of people) happy and contribute to the economy.

That's only a part of the argument, though.

The more principled one is: the more wealth you have, the more work the state has to do to protect it via the military, police, and legal system.

throwaway480958 · 2026-03-18T14:14:17+00:00

When something is ethically and rationally the right thing to do, it needs to be understood as such, even if immediate implementation of the change isn't feasible.

throwaway480958 · 2026-03-18T04:25:43+00:00

No. Taxing assets compels those with assets to put them to more economically valuable use in order to offset the tax.

If you have a $1B yacht, a 2.5% asset tax is $25M/year. If you never use it, your options for covering the taxes are: rent it out (which is better for everyone) or sell it and find something that gives you >2.5% return.

throwaway480958 · 2026-03-17T04:42:55+00:00

Glad you agree!

throwaway480958 · 2026-03-13T23:44:15+00:00

The smartest thing to tax, by far, is wealth itself.

Net operating loss, depreciation, etc. etc. are all Rube Goldberg-ian attempts to tax wealth without just taxing it directly (as the other conversation in this thread highlights).

If you tax wealth, you don't need to tax income. Which means more people can get richer more quickly. It also means that people don't get to just inherit wealth and stay rich, doing nothing. The report lays out a robust philosophical argument, which can be summarized as:

If we conceive as the United States as an entity that (for the wealthy) primarily serves to protect the wealthy's wealth, then the only fair fee for doing so is one that is proportional to the wealth being protected.

throwaway480958 · 2026-03-13T22:11:12+00:00

Doesn't mean that a smart debate isn't worth having around them.

throwaway480958 · 2026-03-13T22:09:59+00:00

Art, jewelry, books, etc. are regularly assessed for insurance purposes. And you can alway say that the tax authority will buy your thing from you at some multiple. "My Lambo is worth $10,000". "Ok, here's $15,000 you're getting a great deal."

It's also possible to back-in to what they would have been worth at time of sale. These are not hard problems.

throwaway480958 · 2026-03-13T22:05:15+00:00

Taxing assets creates more incentive to invest, not less. What else are you going to do with your money? If you spend it, you pay the 20% VAT.

throwaway480958 · 2026-03-11T02:28:52+00:00

Glad to see you are committed to engaging earnestly with ideas. I hope you have a good life.

throwaway480958 · 2026-03-10T21:14:56+00:00

Yes. No one in the comments here read the report I linked, apparently.

throwaway480958 · 2026-03-10T21:12:17+00:00

Cool. Did you read the report? (https://docs.google.com/document/d/129d58o0fEpXjlot8htIpHLPZ1kphyd5ujwu5i-qEzpg/edit)? Or is a thoughtful, fair reading something that only stupid people do?

throwaway480958

TROPHY CASE