Should we worry about income inequality? Is life better for most people today or 100 years ago? Is Bruce Springsteen’s music any good? AEI economics scholar Michael Strain returns to The Remnant to answer these and other questions.

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There are 12 comments.

  1. Coolidge

    The USA spends about $1T/year on protecting property (counting military, courts, and all justice). It seems that since the owners of property are the beneficiaries of that spending, the owners should pay that much in taxes. Fee for service. A national property tax (wealth is simply a valuation of property) is thus natural and justified. About 1.5%/year about covers it. I’ve paid higher rates for managed mutual funds.

    • #1
    • April 4, 2019, at 12:27 PM PDT
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  2. Member

    DonG (View Comment):

    The USA spends about $1T/year on protecting property (counting military, courts, and all justice). It seems that since the owners of property are the beneficiaries of that spending, the owners should pay that much in taxes. Fee for service. A national property tax (wealth is simply a valuation of property) is thus natural and justified. About 1.5%/year about covers it. I’ve paid higher rates for managed mutual funds.

    The military mostly protects foreign property, though. So, that means Europe, Japan and South Korea should pay. . .?

    • #2
    • April 4, 2019, at 6:47 PM PDT
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  3. Member

    Adjusting incomes/wealth for inflation is, as Confuscious say, “Necessary but not sufficient.” You also can’t just count the number of millionaires/billionaires, without taking into account the total population and ITS “inflation.” Even if you have 50% or 100% more millionaires/billionaires now, adjusted for inflation, if the POPULATION has increased by MORE than 50% or 100% over the same interval, then the saying “wealth is more concentrated now than in the past” is not successfully refuted.

    • #3
    • April 4, 2019, at 9:42 PM PDT
    • 1 like
  4. Member

    Wow lots of “you knows” in this one. Sometimes even back to back: “you know, you know.”

    • #4
    • April 4, 2019, at 9:47 PM PDT
    • 1 like
  5. Member

    Also, so much of this kind of analysis confuses the causes with the effects. Or, correlation with causation. For one big example, it’s not “Getting Married” that CAUSES people/families to do better. It’s that the same things – attitudes, other behaviors, etc – that lead people to being successful, ALSO lead them towards WANTING to get married. If you just took two selfish millennial weaklings (dangit why can’t I think of that other word? help me @jameslileks !) and they got married, because they read somewhere – or heard on a podcast – that being married leads to success, that’s not going to somehow automatically turn them into responsible adults. But two responsible adults who then WANT TO get married, is a different story.


    p.s. The word I couldn’t think of was “snowflake.” But I’ll leave it as-is.

    • #5
    • April 4, 2019, at 10:24 PM PDT
    • 2 likes
  6. Member

    By the way, Jonah, your self-unaware snootiness may be showing. “Only” $150,00 a year? Please. At present I’m single, but I own a 3-bedroom townhome outright – no mortgage – and multiple computers etc, and I get by on less than $20k a year, net. (Which is the same income I had when making the mortgage payments.)

    • #6
    • April 4, 2019, at 10:43 PM PDT
    • 1 like
  7. Member

    DonG (View Comment):

    The USA spends about $1T/year on protecting property (counting military, courts, and all justice). It seems that since the owners of property are the beneficiaries of that spending, the owners should pay that much in taxes. Fee for service. A national property tax (wealth is simply a valuation of property) is thus natural and justified. About 1.5%/year about covers it. I’ve paid higher rates for managed mutual funds.

    The military is not primarily protecting property. They are protecting liberty, principally.

    The police and courts are not primarily protecting property. For the police, I would think that most of their activities relate to preventing violent crime, plus drug crime, plus enforcing regulations like traffic laws. For the courts, there are many types of crimes involved (the same list as police), plus a bunch of civil law having little or nothing to do with protecting property, such as tort law, divorce law, child support and custody issues, and the like.

    I also think that a national wealth tax would violate the Constitution, which requires that any direct tax be apportioned among the states in proportion to their population. The income tax is an exception, expressly exempted from this rule by the 16th Amendment.

    Finally, what “property” are you planning to tax? Just real property? Everything? Is it net worth, or just assets? So if you own a $400,000 house with a $400,000 mortgage, do you pay wealth tax on $400,000, or on zero?

    If you want to tax all property, valuation becomes very difficult. How do you value a family business? Art and collectibles? Even real estate is sometimes difficult to value properly, if it is unusual property.

    Also, if you tax gross assets and tax everything, you multiply the taxation due to debt. Say I own a $400,000 house with a $400,000 mortgage. If you’re taxing assets, I’d pay tax on $400,000. My lender also has an asset worth $400,000 — the mortgage. So does the lender pay tax on this, too? If so, then only $400,000 is taxed if I own my house free and clear, while $800,000 is taxed if there is a mortgage. It gets worse, because the lender may have borrowed money from someone else in order to fund the mortgage — this would add another $400,000.

    These are just a few of the complexities involved in a wealth or property tax.

    • #7
    • April 5, 2019, at 7:47 AM PDT
    • 1 like
  8. Lincoln

    DonG (View Comment):

    The USA spends about $1T/year on protecting property (counting military, courts, and all justice). It seems that since the owners of property are the beneficiaries of that spending, the owners should pay that much in taxes. Fee for service. A national property tax (wealth is simply a valuation of property) is thus natural and justified. About 1.5%/year about covers it. I’ve paid higher rates for managed mutual funds.

    You have, but you don’t additionally pay it on the same holdings every year – you pay it on dividends or capital gains. It seems insane that you would pay for unrealized gains (or just holdings) for 15 years on some asset and then have that assets valuation go down to almost nothing, sell it at a big loss while having paid taxes on the holding over the intervening years. Yes, I guess you do that for a house, but if you want to chase people into foreign assets and cash, this is a good way to do it.

    • #8
    • April 5, 2019, at 8:53 AM PDT
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  9. Lincoln

    Wait, so your not annoyed that the highest median incomes are in the D.C. area? Are you also not aware that we are running back to back to back trillion dollar deficits?

    • #9
    • April 5, 2019, at 8:55 AM PDT
    • 1 like
  10. Lincoln

    One exception: Unrealized capital gains for founders have never had that wealth taxed through income in any form. 

    • #10
    • April 5, 2019, at 9:04 AM PDT
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  11. Member

    Jerry Giordano (Arizona Patrio… (View Comment):

    I also think that a national wealth tax would violate the Constitution, which requires that any direct tax be apportioned among the states in proportion to their population. The income tax is an exception, expressly exempted from this rule by the 16th Amendment.

    Finally, what “property” are you planning to tax? Just real property? Everything? Is it net worth, or just assets? So if you own a $400,000 house with a $400,000 mortgage, do you pay wealth tax on $400,000, or on zero?

    If you want to tax all property, valuation becomes very difficult. How do you value a family business? Art and collectibles? Even real estate is sometimes difficult to value properly, if it is unusual property.

    These are just a few of the complexities involved in a wealth or property tax.

    https://www.dailymotion.com/video/x2ogsqu

    “To boost the British economy, I would tax all foreigners living abroad.”

    AOC is just mad that she’s too young to have thought of it first.

     

    • #11
    • April 5, 2019, at 11:09 PM PDT
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  12. Member

    And I’ve long thought that one way to deal with inflation of assessed values of properties etc, which is one game states and cities etc play in order to increase their tax revenue, would be to require that a valuation/assessment be a legally binding offer to purchase. So if the county says your house is worth $1 million and will tax you on it, you can say “Fine, it’s yours. Give me the $1 million.”

    • #12
    • April 8, 2019, at 3:09 PM PDT
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