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

[JohnT]

But when people "save" money at the bank, the bank "invests" it back in the economy.

Now if Keynes was talking about saving your money by totally withdrawing it from circulation (putting it under your mattress), he'd be spot on.

[DuncanK]

The economist that I was refering to is Henry George. The book is called "Progress and Poverty." It's on the internet http://americanhistory.about.com/gi/...org%2Fchp1.htm

These guys who supported a wealth tax were kept out of the university system by intellectuals who were against the wealth tax. That's why we have an income tax instead today.

[DuncanK]

Originally posted by JohnT
But when people "save" money at the bank, the bank "invests" it back in the economy.

Now if Keynes was talking about saving your money by totally withdrawing it from circulation (putting it under your mattress), he'd be spot on.

He was and that is what we call wealth. Only a potion of what people save is invested back into the economy the rest is used for speculation. This portion is a drain on the economy. A wealth tax would supposedly reduce this drain.

[JohnT]

"He was and that is what we call wealth. Only a potion of what people save is invested back into the economy the rest is used for speculation. This portion is a drain on the economy. A wealth tax would supposedly reduce this drain."

But speculation is investing too, albeit of a risky kind. If I, in 1859, decided to go to Pennsylvania and see if I could drill oil for sale (though there was very little market for it), that would be speculation. But it happened, and the world is a better place for the speculative interests of Edward Drake.

All a wealth tax would do in this instance is depress stock prices, further dampening investment. Imagine if every wealthy person in America had to sell 100% of their assets, every year, because of a silly, punitive "wealth tax." I think the effect on capital and investment could charitably be called "disasterous."

[DuncanK]

Originally posted by Japher
You can't have a society were everyone is paid what they are worth. That is the problem with all other economic systems but capitalism.

People are paid what they are worth with a capitalist society?! A ditch digger should be the richest man then. Well, maybe those nurses who have to help you with your bowel movement

The rich are always going to get out of their taxes even if we were to tax them more. There is no way to make it fair.

[DuncanK]

Originally posted by JohnT
"He was and that is what we call wealth. Only a potion of what people save is invested back into the economy the rest is used for speculation. This portion is a drain on the economy. A wealth tax would supposedly reduce this drain."

But speculation is investing too, albeit of a risky kind. If I, in 1859, decided to go to Pennsylvania and see if I could drill oil for sale (though there was very little market for it), that would be speculation. But it happened, and the world is a better place for the speculative interests of Edward Drake.

All a wealth tax would do in this instance is depress stock prices, further dampening investment. Imagine if every wealthy person in America had to sell 100% of their assets, every year, because of a silly, punitive "wealth tax." I think the effect on capital and investment could charitably be called "disasterous."

This is what seculation is. When you buy something at price A in the hopes that the price will increase. Their is a reoccuring problem in the stock market. That is that most of the wealth has only speculative value. It is not helping the economy at all. In fact, it is dragging it down. What is worse, when the bubble bursts you have big problems, because then peoples spending goes way down.

[DuncanK]

Originally posted by JohnT
All a wealth tax would do in this instance is depress stock prices, further dampening investment. Imagine if every wealthy person in America had to sell 100% of their assets, every year, because of a silly, punitive "wealth tax." I think the effect on capital and investment could charitably be called "disasterous."

Of course they aren't going to do that, but can you imagine how stimulative that would be to the economy? If you can, you are beginning to learn something here.

[Sirotnikov]

A ditch digger should be the richest man then. Well, maybe those nurses who have to help you with your bowel movement

while i agree that a nurse or a ditch digger are doing very difficult jobs - anyone can do that with little training.

people who invest their lives and intellect into society should rightly so get more.

i have to say though, that i disagree with the totally bloated salary company CEOs often give themselves. They could open a new factory with that sum.

[JohnT]

Originally posted by DuncanK


Of course they aren't going to do that, but can you imagine how stimulative that would be to the economy? If you can, you are beginning to learn something here.

Actually, it would be more likely that I'm just using your favorite analytical model to look at the same facts. Why not do the reverse, Duncan?

[DuncanK]

John T,

The thing that you are missing is the fact of diminishing returns. With each extra dollar that is invested in the economy that dollar earns less and less. At some point people with savings wont invest anymore until the return on their investments increase. Those returns only increase when peoples income increases.

[DuncanK]

Originally posted by JohnT


Actually, it would be more likely that I'm just using your favorite analytical model to look at the same facts. Why not do the reverse, Duncan?

The neo-calssical model is just a joke. It is just used for rhetoric. It simply can't hold up.

[Japher]

People are paid what they are worth with a capitalist society?! A ditch digger should be the richest man then. Well, maybe those nurses who have to help you with your bowel movement

The rich are always going to get out of their taxes even if we were to tax them more. There is no way to make it fair.

The comments I made were an attack at:

You can't have a fair tax system. That's one big reason that capitalism sucks

Mainly stating that one can have a fair tax system and that one can be paid within a capitalist society. I did not indicate that these two things existed. Yet, I do agree with

while i agree that a nurse or a ditch digger are doing very difficult jobs - anyone can do that with little training.

people who invest their lives and intellect into society should rightly so get more.

The argument I was trying to make was that in a non-capitalist society neither (equal pay, fair taxation) could exist.

[DuncanK]

Originally posted by Sirotnikov
people who invest their lives and intellect into society should rightly so get more.

Why, is college such hard work? Is it less desirable than work?

[DuncanK]

Originally posted by Japher
The argument I was trying to make was that in a non-capitalist society neither (equal pay, fair taxation) could exist.

No, I admit it would not be completely fair, but certainly much closer.

[Japher]

Why, is college such hard work? Is it less desirable than work?

Good questions.

College is like an investment of oneself. It show that one cares about their capacity to learn and to grow, something which is desireable within positions that yield greater control. Granted that some degrees may be pieces of cake, that some students can coast, yet just by attending one shows that they are disciplined, and understand that time leads to success, not instant gratification of current desires (merely getting a job).

College, in general, is not hard (though I found it to be). Yet, the discipline required to excel and achieve through and within academia is difficult and requires a progression of maturity to step into the real world, while keeping all of the knowledge one learned within the school.

Go to college get a good job for good pay - works and is fair, IMO
Don't go to school, work digging a ditch for lesser pay - works and is fair, IMO
Go to college and don't get a good job - happens, and to those it happens to, for the most part, is fair, IMO
Don't go to college, apply yourself and succeed - happens and is fair, IMO

So you know, a higher percentage of Millionares either did not go to college or admit to not using any of the schooling they receive to make them rich... where schooling is different then an education. -Source, Thomas J. Stanley, "The Millionare Mind"

No, I admit it would not be completely fair, but certainly much closer.

ok