The Tax Justice Network said trillions could be raised with a ‘featherlight’ tax on the 0.5% of richest households, copying a current Spanish tax
Governments around the world copying Spain’s wealth tax on the super-rich could raise more than $2tn (£1.5tn), according to campaigners calling for the money to help finance the climate transition.
As a growing numbers of countries consider raising taxes on the ultra-wealthy, the Tax Justice Network campaign group said in a report that evidence from a “featherlight” tax on the 0.5% richest households in Spain could help raise trillions of dollars globally each year.
The Spanish government, under the socialist prime minister, Pedro Sánchez, introduced a temporary “solidarity” wealth tax in late 2022, which is collected in 2023 and 2024, on the net wealth of individuals exceeding €3m (£2.6m). It is estimated to apply to the richest 0.5% of households.
The rich are going to get to the “find out” stage one way or the other. Do I generally like a wealth tax? No. Do I think it’s needed now because Republicans fucked up our country with repeated tax cuts for the rich over 60 years that we would never otherwise recover from? Yes.
I also read they started doing this in some American state and it raised 1.8 billion dollars. If this idea appeals to you, try to find out if there are any petitions in your country that suggest something like this. If you’re from the Netherlands, the SP has a petition like this.
Wealth taxes are rarely efficient and create all sorts of weird and counter productive effects. Better to properly tax income and capital gains.
Examples?
Of the counter-productive effects? I have a bunch of shares in a private company that I was given for good performance and retention. At the latest share price from the latest funding round they’re worth more than enough to put me in the 0.5%. However, they’re not liquid - I can’t sell them unless the company floats or is bought. Under a simple wealth tax I’d have to pay many thousands of pounds of tax on them every year despite them having no realisable value. Just because something is an asset with a nominal value doesn’t mean it’s liquid or generating income. Obviously when (if) I sell the shares I’ll pay capital gains, or if they generate a dividend, income tax.
That is indeed counter productive for rich people like yourself yes.
That seems painfully simple to make an exception for: assets you are not legally allowed to sell, transfer, convert, use as collateral would be excluded.
And that creates a loophole that is trivially easy to exploit, which is the problem. I simply wrap up any asset I want to hold onto into a fund or trust that stops me doing the above…
If the asset was ever legally liquid while in your possession, it qualifies for the tax.
Something can be legally liquid, but not practically liquid. Like a house. For example the Board of the company could give me permission to sell, but why would they?
I’m sure you’re also aware of tax brackets? The same concept can be applied to wealth tax: legally liquid assets above a certain threshold would be taxable. Owner-occupied homes would be exempt.
This is a lot easier than you think.
You know that people pay taxes on the wealth embodied in their house, every year, right? Not even their equity in the house, but the full value - both the piece they own and the piece the bank still owns. Their primary residence is most of the wealth for most of the middle class, so we already have a wealth tax for everyone but the ultra-wealthy.
Good for you. You are making a great deal of profit from your partial ownership of the company, and you need to pay a fair tax on it. I’m sure you’re aware that you can use those shares as collateral for low interest personal loans, and you can afford to pay a few thousands of pounds in tax extra. The economy works the best when everyone contributes to it, and when a wealthy minority isnt sitting on wealth, preventing others from participating.
That’s my point - I’m not making any profit from my ownership of the shares. If I were I’d pay tax on it. All I have a bit of paper which might be worth some real cash in the future. It would become a liability if I had to pay a simple wealth tax on it.
If I use the shares as collateral on a loan and they come good then I have to sell the shares to repay the loan (and pay tax on the sale). If they don’t then I suppose the loan company takes a loss, they’ll have factored that in on to the interest I pay. So probably won’t be so low interest
I completely agree on the economy but and happily pay all the tax I should. But ‘wealth’ is not a simple concept- it comes in many forms, it’s not just a pile of bags of cash with a fat bloke in a top hat sitting on. Even measuring it is hard. So taxing it is really hard and inefficient, which is completely glossed over in these kinds of campaigns
That’s my point - I’m not making any profit from my ownership of the shares
We aren’t taxing your profits. We are taxing you. That is the entire point of a wealth tax.
Personally, I wouldn’t tax all forms of wealth. I would ignore personal property, intellectual property, real property. I would only tax securities. I would drive the wealthiest among us to pull their excess wealth out of the securities markets.
I don’t have a problem with the richest among us acquiring all the luxury goods they could imagine. Want a mansion? Have 10. A yacht for every week of the year? Go nuts. Go put a bunch of carpenters and boatwrights to work.
The problem isn’t their consumption. The problem is their frugality: they aren’t buying those mansions, those yachts. They aren’t employing those carpenters and boatwrights. They are using their wealth only to purchase the means of acquiring more wealth.
Instead of buying the products produced by a factory, they are buying the factory itself, and taking a larger and larger share of its revenue.
The fact that we have nothing to systematically disincentivize this behavior is the root cause of economic disparity today. A wealth tax is a first real step in solving this problem.
Valuing your incentive shares is not hard. It’s done every day. The bank that would give you a loan does it to know how much money they can loan you.
Your illiquid private shares would just have the value discounted by some percentage to account for this: say, 30%. So you could be taxed on the remaining 70%.
I understand that you don’t want this to be true, but it is. You are not the first person with an illiquid asset, and It’s relatively easy to value it for tax purposes. Property tax is paid based on the assessed value of real estate, which is also illiquid. Every year billions of people manage to pay their property taxes without having to sell their homes.
So you’re wrong.
Not the same - a bank needs it to be roughly right across a portfolio of loans, I need it to be exactly right for me.
Property tax etc is an understood part of owing a property- an intrinsically valuable thing. I’m strongly in favour of land tax - it encourages the productive use of land. I can’t live in shares, and I can’t eat them. At some point I may make some actual money from them and at that point I should pay tax. I should not be taxed now on possible future gains, anymore than I should be taxed now on a possible pay raise if I get a promotion.
Fairer and more effective tax is essential- and to advocate for it effectively a grasp of the basics is essential. Otherwise you’re counter productive. I feel I’ve made my points and shall withdraw
It is the same. Property tax valuation isn’t “exactly correct”, nor does it need to be. It’s just roughly consistent across similar properties. If anything, it’s easier to value the private shares you own because they are exactly the same as the shares someone else in your company owns. Properties are all unique.
I don’t mean to insult you, but you are clearly not an expert in finance. Like I said, I understand why you don’t want to pay a valuation tax on your shares but it would be technically simple to implement.
Honestly though, you don’t have to worry about it. No wealth tax is being proposed on any amount under $100 million. And no tax is proposed above 2%. If you have $100 million in private shares, your tax burden will not negatively affect your life. Get an expert.
If the company is worth that much, it is likely that it will pay out. Having that amount of wealth gives you a lot of leverage, you have a large wealth under management, and banks can be sure you won’t default on your personal loans.
With regard to the murky value of speculative assets like real estate and private equity, there likely should be some tax-based disincentives to help prevent sky-high speculative valuations, like a land tax and/or a wealth tax. If the economy has too many speculative assets with inflated value, it allows banks to effectively dodge loan regulations, creates a self-fulfilling inflationary loop, and is destabilizing for the economy.
Furthermore, capital gains tax is taxed significantly less than labor in order to make assets more liquid, so a wealth tax would make up that difference.
A wealth tax prevents these loopholes where income is taken as capital gains or as security for loans and taxed less.
I think it makes more sense to tax the shares at the time they are received (as income). Then they can be taxed again at the time of sale if they have increased in value.
The shares aren’t being taxed. The ultra-wealthy individual is being taxed on their “excess” wealth, which is held in the form of these shares.
Personally, I wouldn’t tax “all” wealth. It does us no economic harm for them to own a billion dollar mansion or yacht or other tangible asset.
I would only tax registered securities: the vehicles by which these individuals gain wealth. Every year they are worth more than 99.5% of the population, I would transfer a small percentage of their wealth-generating assets out of their hands, to be resold at government auction.
The net effect of this will be that the 99.5% of us will come to own a greater percentage of these wealth-generating assets.
deleted by creator
Tax on hoarded wealth is pressure to make that wealth do something productive. If you can’t get enough return on your invested millions to pay the tax, then you will slowly lose that wealth. Property tax works similarly for farmers and landlords.
The ultra wealthy are exactly the people who should be making big, bold, high-risk bets with their money, because they’ll be just fine if they lose a few million. Yet these are the same people who can live a comfortable, even lavish life off the lowest risk, lowest return investments, like government bonds. The rich say social safety nets discourage poor people from working, and I say that tax-free capital discourage it from working.
Also, very important to remember that wealth tax proposals generally target only wealth over a very high threshold. US proposals have been $10-50M, which seems pretty equivalent to the Spanish implementation.
Tax on hoarded wealth is pressure to make that wealth do something productive.
To be sure, that wealth is doing something productive. Billionaires aren’t sitting on piles of gold bars or packing their mattresses full of cash. But the “something productive” that wealth is doing is being done for other wealthy people.
A wealth tax makes it so that a teeny weeny part of the “something productive” is for the public good instead of being for rich fuckers to pass around amongst themselves, empowering them to take advantage of everyone else.
I’m not really seeing the problem here.
I’m sure you’ll understand if the rest of us are skeptical of a guy worth $20M arguing against a wealth tax.
I mean, you’re right that restricted shares are a special problem in assessing “wealth,” but that’s why tax laws are complicated and full of loopholes.
I’m in favour of tax and rich folk paying more, but a naive imagining that a simple wealth tax is the answer just isn’t helpful. I’m against wealth taxes because they’re crap taxes - they’re easy to avoid, easy to get caught in by accident if you’re not employing an expensive accountant, and therefore a rubbish way of raising money
If the shares can be owned by you, they can be owned by someone who is not you. You don’t have to worry about liquidating them. We’ll go ahead and do that for you.
If your “private” company wants to stay “private”, they won’t secure funding from the ultra wealthy, or they will be ready to buy back your tax-shares at auction.
The rich usually ensure that there are enough gigantic exceptions. And these exceptions often aren’t reported upon.
And maybe he believes the trickle down economy bs.
Trickle down is complete BS and the many ways to avoid wealth taxes are part of the problem with them. You need to properly tax income and capital gains and close as many of the loopholes around each as possible. Then add a proper estate tax as well to reduce inter generational wealth
Also require greater transparency around money movement and proper auditing. Governments need to spend more on auditing.
the rich are ruining every country, every economy except for their own, and the environment. let’s make the rich extinct before they make all of us extinct.
They’re also destroying the entire biosphere
Nah man it’s the bioflat, wake up sheeple!
It would be a good start but then new rich would emerge to take their place. Maybe we should just put “re-enact French revolution” on a 100 year calendar reminder.
No, that is what regulations are for. Monopolies used to be regulated more after they caused the great depression. Been done before can be done again.
The Guardian - News Source Context (Click to view Full Report)
Information for The Guardian:
MBFC: Left-Center - Credibility: Medium - Factual Reporting: Mixed - United Kingdom
Wikipedia about this sourceDave Van Zandt’s site, Media Bias Fact Check puts The Guardian and Breitbart in the same (Factual Reporting: MIXED) category of credibility. Apparently this is because they both have articles where the facts are contested. This ignores the difference in size of the two news sources’ publication rate, the number of articles contested, and the seriousness and type of errors. Van Zandt is not a social scientist, and should not be running a credibility gatekeeper when he doesn’t understand statistics, science, or bias.
MBFC uses a fundamentally flawed methodology for categorizing bias. Lemmy.World loses credibility every day this bot continues to operate.
It’s also worth pointing out that from memory more than half the Guardian articles cited by MBFC as having failed fact checks were corrected or removed.
Also there is currently a pinned feedback thread on the news community asking for feedback on the bot so please post your thoughts in there if you haven’t already.
I’ve posted twice in the thread in !politics@lemmy.world, as well as reached out to @Rooki@lemmy.world, and his responses reek of bad faith. I’ve posted in the pinned thread, but if it has come this far, then politely containing our discontent to the sanctioned channels is not enough.
It’s pretty hard to ignore the overwhelming downvotes the bot posts have attracted, and if someone sees that and still thinks MBFC is a good idea, I question their judgement. It’s likely they will ignore our well-thought out concerns as well.
My suggestion is to respond directly to the bot so that people observing the spectacle of downvotes have a better understanding of what is going on. We downvote MBFC because we are on the side of fact-checking and media literacy - not against it.
Well said, it’s definitely a frustrating situation. I’ve also done my best through the proper channels, I don’t think much in the way of constructive action is likely to come from it but hopefully I’m wrong. At least from the many downvotes it seems like we’re far from alone but that also makes it more frustrating in a way.
We are collecting all the feedback here: https://lemmy.world/post/18775630
We are trying to come to a better solution ( except removing fully the bot ).
Thanks for fighting for accuracy, desperately needed in the modern era.
Can you make a change today so that The Guardian & Breitbart would never appear to be similarly [un]credible at first glance?
If not, a small pause could make sense. Better than damaging credibility not much of established news agencies perhaps but certainly the bot, limiting its impact in the future even if the problem’s corrected (think insta-downvotes from older users once burned by it). Folks respect pauses for refactoring!
Maybe MBFC isn’t tops and there’s some attractive alternative btw!
PS: thanks @Five@slrpnk.net for the alarm
Why is removal of the bot totally off the table? I agree it’s not necessarily the only path forward but why would any particular course be off limits?
Having nothing and being a “trust me bro, this source is lit and unbiased” is better?
- source: Trust me bro
By having the bot you’re not solving the problem, you’re simply moving the “trust me bro” down one level and distracting from the actual discussion.
Granted I’m not a mod so I’m sure I’m missing some perspective here but I don’t think the bot is helping at all personally.
Also this is not an answer to the question. I simply asked why the option should be off the table completely. I didn’t say there are no better solutions. It just makes it sound like you already made your decision and are not open to feedback which is why I wanted to ask.
The MBFC is not any part of any solution, and failing to acknowledge how the bot is harming media literacy on Lemmy undermines any future solution you might implement.
Having nothing and being a “trust me bro, this source is lit and unbiased” is better?
- source: Trust me bro
Yes.
One of the basics of media literacy is that no source is unbiased. This is one of the flaws with MBFC - rating biased news corporations at the center of its spectrum as ‘least-biased’ sources. This is not a credible position for an organization that wants to be considered something other than a propaganda mill.
Many of your readers are interpreting political bias to mean credibility, and are rejecting sources that might expand their political horizons. MBFC conflates these two things as well, exacerbating the problem. Dave M Van Zandt rates left-leaning publications as less factual than alt-right outlets with even higher and more egregious problems with factual reporting.
If a reader is curious of the bias of a publication, it’s better they do their own research rather than poisoning the well before they see the article. Giving them bad information is worse than leaving them to their own devices and letting them develop media literacy on their own.
And it may not be hard to develop something better. But it’s difficult to focus attention on that when we’re distracted trying to quell the bleeding wound that is MBFC.
Thank you for this public service. This bot is a fucking joke. We use The Guardian all the time as a reliable source on Wikipedia, and rightfully so. Breitbart, on the other hand, is so comically unreliable that it was deprecated (the same exact measure as the Daily Mail), and then on top of that it was added to the spam blacklist due to “persistent abuse”.
Because this is a tax on assets and not income it seems to me that there could be some unfair situations, for example you inherit a property that is not so easy to sell and are now taxed on it, or you have shares/stocks in your startup company and are now taxed on it even though you haven’t sold them (and quite possibly can’t sell them).
I believe it would be better to tax income while closing some of the loopholes like allowing borrowing money against stocks and properties.
Unfortunately finding a realistic way on how to do it is close to impossible
Why, just tax based on value at a given date. In the Netherlands they tax bank value based on december 31st amounts over a specific value. And your house. They can also do that with portfolios of shares, bonds and other things people can use as collateral.
If you can borrow against a portfolio of shares, we can tax it too.
Make taxes too high and instead of people paying it, they will just move to another country where they don’t have to.
That’s HORRIBLE! We should INSTEAD be Taxing Homeless Mothers to raise that Money INSTEAD!
Here is an idea, how about the US uses its military to enforce a minimum wealth tax worldwide to end tax competition, instead of to enable its proxies to commit war crimes.
The US used its Military for the past 80 years to prevent anything like this from happening and to “protect” the assets of rich white people
So you’re proposing that the US tries to go conquer the world. Are you insane?
I’m not in favor of gunboat diplomacy, but if the US is doing it anyway (to enable genocide) I would rather have them do something useful with it.
And using a military to enforce policy does not equal conquering the world, it’s at the end of the escalation ladder, diplomatic pressure then sanctions, embargoes, support regime change, militarily blockades, limiting military operations, and finally full on invasion. These are all things the US is already doing but then for nefarious reasons.
