RT @doctorow
This summer started with a bang, with @propublica's #SecretIRSFiles leaks - a massive data-set detailing the tax-evasion strategies of the rich, confirming F Scott Fitzgerald's maxim that "they are different from you and me" (We pay tax. They don't).

https://pluralistic.net/2021/06/08/leona-helmsley-was-a-pioneer/#eat-the-rich

1/

RT @doctorow
The biggest news story of the moment @propublica's reporting on the #SecretIRSFiles, a trove of leaked tax data on the wealthiest people in America that show that they pay effectively no tax, through perfectly legal means.

https://pluralistic.net/2021/06/15/guillotines-and-taxes/#carried-interest

1/

I see a few possible options here:

• Time-average asset value. If there's uncertainty in the present-year value of assets, use a rolling average (e.g., 2, 3, 5, .. , years) to asses value, and tax based on that. Future-weighting asset inflation might be discouraged by progressively taxing higher rates or quantities of appreciation --- better to realise tax on five years of 10% gains rather than a single year of 62% gains.
• Yes, asset deflation could then be applied toward tax credits. Similar logic would apply.
• Where a range of values is given, the tax basis is assessed at the high end of the range.
• Liquidity events trigger tax settlement, including arrearages, again at progressive rates. Keeping current and accurate is encouraged.
• Costs in computing taxable value and tax amount are assessed to the specific taxpayer in question, or institutions holding or facilitating such asset holding or transfers.
• A crude and old mechanism was for stamp taxes on assets of value. Implementing this in a modern age might prove difficult, but as an example , ancient Chinese paper money required stamp taxes to be recognised as legitimate, effectively a tax on holding paper wealth.
• There are a reasonably finite number of attractive asset shelters: real estate, stocks, bonds, derivatives, collectibles, and the like. Taxation of these, either in holding or transfer, increases carrying and exchange costs. Ultimately this should reduce the asset value of these investments, and return wealth to the common weal.

@pluralistic

#inequality #WealthTax #SecretIRSFiles #IRSFiles #TheSecretIRSFiles

6/end/

The "but it's difficult to measure" argument has also been applied, for the record, to other forms of wealth accumulation common to high-net-worth (HNW) individuals, notably stock options. The response has been to note that such options clearly have some value, though the precise valuation may not be presently knowable. Because that value has a risk component.

The ... risk ... noted by the person raising this objection was that taxation of more assessible assets might result in a flight to even less readily assessed assets further compounding the problem.

@pluralistic

#TheSecretIRSFiles #IRSFiles #SecretIRSFiles #WealthTax #inequality

5/

For some time, I've come to view the "FIRE" sector of the economy, finance, real estate, and insurance, as having the common thread of risk. That is, each is based on the premise of assessing both the current market value and the associated uncertainty regarding that, of a portfolio --- debt and assets, real estate property holdings, insurance policies, in each specific case. Whilst all economic activity embodies some degree of risk, it's in the FIRE sector that risk seems to be the principle, possibly only manageable component. Actors within the sector attempt risk management through diversification, information, modeling, prediction, outcomes management, expectations management, legislated liability or immunity, and direct management of both activities and entities engaged in the sector.

Notions of economic value are then inherently notions of risk. (Among numerous other confounding factors.)

@pluralistic

#inequality #WealthTax #SecretIRSFiles #IRSFiles #TheSecretIRSFiles

4/

Where income is at least in theory precisely denominated wealth appreciation is not transational, but is based on assumptions, notably:

• Of asset holdings themselves.
• Of the market value of those holdings.

Both are subject to uncertainty.

@pluralistic

#TheSecretIRSFiles #IRSFiles #SecretIRSFiles #WealthTax #inequality

3/

A tax basis should be:

• Equitable, assessed according to ability to pay.
• Certain, rather than arbitrary
• Convenien to pay
• Efficient to enact

I'm not just making these up, Adam Smith has discussion in Book V, Chapter 2, of his Wealth of Nations: https://en.wikisource.org/wiki/The_Wealth_of_Nations/Book_V/Chapter_2

@pluralistic

#inequality #WealthTax #SecretIRSFiles #IRSFiles #TheSecretIRSFiles

2/

Sticking with Cory's "The Secret IRS Files" thread for a bit...

I've seen a lot of discussion, little of it elucidating, and that from both supporters and negators of this work.

Among the few interesting observations is that unrealised wealth gains are difficult to assess (https://joindiaspora.com/posts/20937383#df8c1800ab2701399f60005056264835). This has objection has some merits, and I'd like to draw attention to it.

#TheSecretIRSFiles #IRSFiles #SecretIRSFiles #WealthTax #inequality

@pluralistic

1/