Is it feasible to switch from an income-based tax system to a wealth-based tax system

[DuncanK]

Let me try another post to make things clearer. The definition in economics for investment is a purchase of goods and services which is used by a business to produce more goods and\or services. The definition for investment that you use when you talk to your stock broker is money used to purchase stocks or something that you will get a return on (hopefully). They are not the same thing.

The total financial wealth in the country increases every year. That is called the savings rate (you also have some wealth either coming in or out of the country). The savings rate is the money, taken out of total income that is not spent in the economy on either consumption, investment, government spending, and imports. It's a little bit more complicated than this but I don't want to type out a textbook. This money that is saved is a drain on the economy and it is also the increase of the financial wealth in the country.

[Flubber]

Originally posted by DuncanK


Scarcity..... Why?

Simple -- because certain professions were not paid enough

There have been a scarcity of nurses in many places in North America for instance as nurses migrate to higher paying jurisdictions. This is also true of other health care professionals--

I see now Duncan that I have been debating a person that is talking of their idealized society-- you know free training for everyone, all people will work hard without financial incentives-- its sounds a lot like " from each according to their ability and to each according to their needs "

[Ozz]

Originally posted by Flubber
The employer was an economic development association that needed someone to run around in the office, photocopy stuff, answer the phone etc . It paid around 30,000

But the workers could earn their wages at the plant for 14 weeks and then go on unemployment

So thats the bastard employer

I'm still right, in both cases the employer is the government.

They're the only ones who pay 30 grand for a girl friday. They are setting the 14 week minimum for UIC there, it's 52 everywhere else unless adjusted.

The whole area sounds like an economic basketcase.

[Ozz]

Originally posted by Goingonit
And it's impossible to convert fur coats and diamond rings to income-producing investments

Rentals, just like renting out a Prom Tux.

Anything of value to another person can generate income.

[Zkribbler]

Originally posted by Imran Siddiqui

any who own miles and miles of undeveloped land.

Land isn't an investment? That's news to me.

Glad I could educate you.

Income property such as apartment buildings, minimalls, office buildings, are of course investments. But I was talking about undeveloped land. Sure you can "invest" your money in raw land, speculating that someone someday will pay you more than you originally paid, but you could make the same "investment" with tulip bulbs or a pile of dog poo.

[TCO]

How do I remove the black circle from this thread? It bores me and I don't want to check on it.

[MRT144]

tax estates 75-80% over 10 million dollars and create a sloping curve till you get to 1 million dollars. go inheritence taxes!

[Flubber]

Inheritence taxes are the only types of wealth taxes I have seen. The problem is that the truly wealthy will set up a series of trusts to hold assets such those assets are not part of the estate of any individual when they die.

[DuncanK]

Originally posted by Flubber


Simple -- because certain professions were not paid enough

There have been a scarcity of nurses in many places in North America for instance as nurses migrate to higher paying jurisdictions. This is also true of other health care professionals--

I see now Duncan that I have been debating a person that is talking of their idealized society-- you know free training for everyone, all people will work hard without financial incentives-- its sounds a lot like " from each according to their ability and to each according to their needs "

Of course, paying nurses minimum wage would be even worse than it is right now. Of course, nurses (in this country too) are not paid what they are worth to society. That's why there is a shortage, agree?

[MRT144]

start taxing trusts

[DuncanK]

Originally posted by MRT144
start taxing trusts

Hey, I'm a beneficiary of one of those!

I would still support a tax on them if it were part of a good overall wealth tax that helped increase investment. Investment comes out of national income you know

[Flubber]

Originally posted by MRT144
start taxing trusts

Trusts do pay income tax but my comment was that you could easily avoid "inheritence" taxes with this type of instrument.

The other simple method is to gift assets to your family during your lifetime. You could tax these transfers with some form of wealth transfer tax but this would run into the same problems as any wealth tax

[DuncanK]

Originally posted by Goingonit
First of all, I hope nobody's saying that wealth produces anything - only one specific kind of wealth does that, and it's capital.

I was thinking of saying this too. But I was going to say that, in macroeconomic terms, wealth comes from income. Income does not come from wealth like it does in your savings account. The payment that you get from your bonds is a transfer payment. This is calculated seperately than GDP (the production of goods and services).

Originally posted by Goingonit

And this applies to the wealth tax argument too. Not only are investments still wealth, but no amount of asset-dumping by the rich will increase available capital.

I'm not sure what kind of wealth you are talking about here.

If you are taxing their luxury goods than the price would drop I guess and that would discourage the production of these goods, true. One could also say that that would divert resources to more neccessary production.

If you are talking about financial wealth, like stocks and bonds I disagree. If a wealth tax convinced the owners to dump these it would both stimulate consumption and investment a great deal. The thing you would really have to worry about is inflation.

[DuncanK]

Originally posted by Goingonit
Imran, aristocrats who owned large tracts of undeveloped land were the reason why such a large percentage of capital was not being used in the 19th century. One of the only successful uses of a wealth tax was by the British, who managed to take the land out of aristocrats' hands, and thus open to public use many lands which were not developed, and never were going to be.

I knew that someone would bring up this point. I wanted to give an example of how wealth tax would encourage capitalist to increase the productivity of capital.

[Ozz]

Originally posted by DuncanK


Of course, paying nurses minimum wage would be even worse than it is right now. Of course, nurses (in this country too) are not paid what they are worth to society. That's why there is a shortage, agree?

It's more than that, it's lousy hours and being screwed
around by politically appointed (In Canada) hospital administrators, (like being "on call" but not getting pay, trying to part- time everything but management), a crappy union that if you don't pay your dues to, You LOSE your creditation.

Nurses are intelligent people, they can make just as much doing something else. Alot of them are doing
something else, and will never go back to nursing.