Posted on 08/01/2018 12:06:00 PM PDT by Brian Griffin
To pay off the ~$21 trillion dollar federal debt, which amounts to about $60,000 per American, it is probably necessary to have annual federal wealth taxation.
It is best to introduce the federal wealth tax when asset values are high, so a smaller percentage of rich people's assets have to get taxed to pay off the national debt.
The tax might be levied upon the total of net personal property financial holdings and the equity in real property.
The rates might be:
1% on the equity in real property habitually resided in by the filer(s),
2% on the equity in agricultural land, less .05% for each year owned & habitually worked personally, up to 20,
2% on the equity in other real property not habitually resided in by the filer(s),
2% on the net worth in personal property financial holdings, other than common stock, and
4% on the net worth in common stock.
The rate is higher on common stock because most of modern great wealth is in the form of common stock.
Joint returns might be permitted that include children, parents, and the spouse/domestic partner of one specified filer. Joint returns would reduce the artificial shuffling of assets between related persons to reduce taxation.
There might be exemptions, from the tax due, of $100 for each year of a filer's age up to age 65, less $100 for each year of a filer's age above age 65, as of January 1 of the tax year. Age-based exemption amounts adjust moderately well for adult wealth accumulation and old age spending.
Example 1:
Mary, age 62, and Bob, age 63, own a $700,000 personal residence outright and $100,000 in common stock.
The tax on the residence would be $7,000 and the tax on their common stock $4,000,
with an exemption of $6,200 for Mary and $6,300 for Bob,
so they would not owe any federal wealth tax.
Example 2:
Jean, age 56, and Jim, age 58, own a $450,000 personal residence and a $150,000 rental apartment outright.
The tax on the residence would be $4,500 and the tax on the rental apartment $3,000,
with an exemption of $5,600 for Jean and $5,800 for Jim,
so they would not owe any federal wealth tax.
Example 3:
Anne, age 42, and Peter, age 45, own a $1,000,000 personal residence outright and $200,000 in common stock.
They had no children and Peter's parents are dead.
Anne's mother, age 63, and father, age 69, own a $300,000 house outright and $150,000 in common stock.
Anne and Peter would file a joint return with her parents.
The tax on the residences would be $13,000 and the tax on the common stock $14,000,
and after their exemptions of $4,200, $4,500, $6,300, and $6,100 for a total exemption of $20,100,
they would owe a federal wealth tax of $6,900.
Example 4:
Terry, age 50, and Paul, age 49, own $300,000 personal residence together with a $100,000 mortgage.
Terry has a teacher pension right worth $700,000.
Paul has a city police pension right worth $800,000.
Terry and Paul would file separate returns, with their respective parents.
Terry's mother, age 73, and father, age 75, own their $200,000 house outright and $20,000 in Treasury bonds.
Paul's mother, age 70, and father, age 71, own their $250,000 house outright and $50,000 in common stock.
Terry and Paul have two children, Patty, aged 26, and Debbie, age 28, each with $2,000 saving accounts.
Paul's return would take the children since his side is better off financially.
Terry's and her parents' return would have a tax on her housing equity of $1,000, on her pension right of $14,000, on her parent's house of $2,000, on her parents' Treasury bonds of $400, for a total of $17,400,
with exemptions for Terry and her parents of $5,000, $5,700 and $5,500 for a total exemption of $16,200,
so Terry and her parents would owe a federal wealth tax of $1,200.
Paul's and his parents' and children's return would have a tax on his housing equity of $1,000, on his pension right of $16,000, on his parent's house of $2,500, on his parents' common stock of $400, on his children’s saving accounts of $80, for a total of $19,980,
with exemptions for Paul and his parents and his children of $4,900, $6,000, $5,900, $2,600 and $2,800 for a total exemption of $21,200,
so Paul and his parents and children would not owe a federal wealth tax.
Example 5:
Mark Sugarhill, age 38, owns $10 billion in common stock and a $16 million mansion outright. He bought and gave multi-million mansions to all his direct relatives years ago.
The tax on Mark's stock would be $400,000,000 and the tax on his mansion would be $160,000,
and after his exemption of $3,800, Mark would owe a federal wealth tax of $400,156,200.
End the Fed and stop paying them interest on our own money.
All taxes are bad however the income tax is both bad and evil.
Don't property taxes go towards school maintenance, road repair, street and traffic lights, police/fire/EMT, pest control, community landscaping, and such?
-PJ
Wealth Tax?
In before the zot.
mostly to teacher retirements.
There is already a wealth tax (on some wealth). It’s called “deficit spending”.
The way deficit spending works is the government gives the government a T-bill in return for printing money. This makes the value of all US Dollars worth less.
In short, it is a tax. The government takes value from people who have dollars (or a flow of dollars, like a retirement) and spends it.
Interestingly, it’s a flat tax. Anyone who has dollars is taxed at the same amount (said amount being the amount of deficit spending (i.e., new dollars) over the total amount of dollars outstanding.
Due to the power of the USA, we get to export part of this tax burden onto any country that holds dollars (or holds T-bills).
So China pays a pretty damn fair amount of the deficit tax.
That’s way better than taxing people in the USA.
(And why I oppose deficit spending, but am less opposed to it than new taxes.)
“So frugal people will be taxed more.”
Almost no frugal person would get taxed. If you are subject to the tax, being frugal would be stupid.
“Does this happen every year?”
It’s “annual federal wealth taxation”.
“Does [real] property get taxed as property and as wealth?”
Yes, that’s why owner-occupied homes get a federal rate of wealth tax rate of 1% instead of 2%.
“Seriously, this is the dumbest thing every written.”
The spending bills of Congress are the dumbest things ever written.
Please remember 3% interest on $21 trillion comes to $630 billion a year, about 40% of federal individual income tax revenue.
A wealth tax is way superior to the income tax, flat or otherwise.
It’s a tax on your past income. And it could be imposed as often as a gov’t wished.
We have had a Funded Public Debt ever since Alexander Hamilton was the first Treasury Secretary- he set up the system, which stabilized the shaky finances of the United States and saved the dollar from the oblivion it suffered under the Articles of Confederation gov’t .
As long as the debt service is a manageable percent of the GDP there is no good reason to pay it off. There was a sinking fund for paying it off in early administrations but when it was paid off the country went into recession.
Investors like the guaranteed return on Treasury paper, which is what the national debt is composed of. Insurance companies and retirement guarantors own a very large amount of Treasury paper in order to fund their operations.
Why should anyone that did not cause the issue (debt) be forced to fix it?
You aren’t serious are you? Aren’t you just a talking dog with horrible taste in women?
The government was almost entirely funded by tariffs which is the best choice out of a field of bad choices.
Monstrous, even.
He was eating hair.
“End the Fed and stop paying them interest on our own money.”
There is no such thing unless you are writing a personal check to the Fed. Are you doing that?
The only interest you pay goes to the Treasury via the IRS.
This has to be a troll job.
Anybody proposing a solution to a problem he is at least three orders of magnitude off in describing deserves not to be taken seriously.
It’s worthy of a discussion because the income tax(16th amendment) is driving us to socialism just like early 20th century progs knew it would eventually. The 17th amendment was its companion legislation.
NO.
It is best to introduce the federal wealth tax when asset values are high, so a smaller percentage of rich people's assets have to get taxed to pay off the national debt.
NO.
The tax might be levied upon the total of net personal property financial holdings and the equity in real property.
NO.
The rates might be: 1% on the equity in real property habitually resided in by the filer(s),
NO.
2% on the equity in agricultural land, less .05% for each year owned & habitually worked personally, up to 20,
NO.
2% on the equity in other real property not habitually resided in by the filer(s),
NO.
2% on the net worth in personal property financial holdings, other than common stock, and
NO.
4% on the net worth in common stock.
NO.
You do realize this is a CONSERVATIVE site.
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