And before everyone gets upset, tax serves two purposes; 1) control inflation (it in effect burns money that was issued when the govt previously paid for things), 2) disincentivises selected behaviours. and one side effect, when the govt runs a tax deficit it increases inflation, and of course the contrapositive is also true.
I think you are confusing cost inflation with an increase in the money supply. The way the US government funds deficit spending is not by increasing money supply (though it could) but by issuing debt in the form of US Treasury bonds. That is a transfer of money from bond investors to the government. No new money is made. This is distinct from the way that banks issue loans which is by creating new money in the form of credit (but that credit money gets "burned" as loan principal is paid back). So federal taxes do not actually control inflation in the way you are describing. Since federal deficit spending is not financed by increasing the money supply, it can only cause price inflation if it increases aggregate demand over the current productive capacity of the economy. An example would be paying more for healthcare subsidies when there's a shortage of doctors. Or subsidizing demand for housing with more mortgage subsidies when there's a housing shortage. Taxes could also increase inflation if they have the effect of reducing supply of some goods or services (like tariffs do).
Edit: I want to mention that the Federal Reserve can and does increase money supply by buying US Treasury Bonds from banks (converting the asset into cash reserves). There are various reasons why they do this but overall it's done with their dual mandate in mind: control inflation and minimize unemployment.
All forms of debt are money creation. All loans are money creation. Fractional reserve banking is money creation. It doesn't have to be "oh now we are making dollar bills" to count.
Fun small print. As though that's not the exact mechanism of the brutal inflation the US has suffered the past 5-6 years. The US money supply says it all. There are no other serious buyers for $20 trillion in new garbage paper debt every ten years. It's inflation by currency destruction plain and simple and there are no other paths. It's also why gold is $5,000 instead of $500.
1. No, it's not "easier" because it's hard-if-not-impossible to accurately and objectively judge the present-value of many types of assets. Even the case most-familiar to working-class folks, property taxes, nobody really likes/trusts the outcome.
2. We don't tax work, we tax income, because actual transactions between people with "skin in the game" are harder to fake. The extent to which wages are preferred as a subset of income is separate from the wealth-vs-income split.
You can easily get within 10% of the "real" value on most assets. And, in particular, assets like stock have a built in ticker to tell you their exact current value.
This sort of evaluation happens all the time privately. For example, car insurance companies have gotten extremely good at evaluating the value of a car to determine when to simply total it.
The only thing that really makes it tricky is hidden assets or assets with no market value.
The likes of the richest people, who I think most of the "tax wealth" people are thinking of, have the majority of their wealth in equity. It's easy to tax the majority of their wealth.
This does not need to be a perfect system to be very effective at generating revenue and redistributing wealth.
You buy 1 BTC at $60k in 2024. In 2025 it’s valued at $100k, so you pay taxes on $40k gain.
Now it’s 2026 and you finally decide to sell the BTC for the original price of $60k.
Except you’ve paid taxes on $40k in paper gains that disappeared before you sold the asset.
How do we solve that?
(Replace “bitcoin” with “startup stock option” if you really want to illustrate the problem - imagine having to pay taxes on stock options you decide to never exercise)
People advocating for a wealth tax aren't pushing for a tax on gains and losses but rather the total asset value. I've seen 1% and 2% bandied about.
So in 2024, you'd pay $1.2k in taxes (at 2%). In 2025, you'd pay $2k. And in 2026 you'd pay $1.2k
Though, usually, there's also a minimum wealth paired with the tax. Again, I usually only see it for things like individuals with over $100M in assets.
For options, it'd still be the same thing. If the strike price is $1 and the actual price is $60 and the option is vested then you'd be taxed on the $59 per option you hold.
This only gets difficult if you are talking about options in a privately held company. But, again, that's not really the case for a lot of the most wealthy who the wealth tax is targeting.
You hold Enron stock. You’ve been taxed 5% annually on the holdings for the past 5 years. To pay the tax, you decided to take out a loan instead of selling shares to pay the tax (you want to stay invested).
Someone discovers Enron is a fraud, the stock goes to $0 and you go bankrupt because you can’t repay the loans you took out to pay the tax on a (now worthless) asset.
But yeah, if you take out a loan against your home and the housing market collapses and you lose your job (ala 2008) you can end up destitute. The stock market is always a gamble and this doesn't make that better or worse.
Right, and at this point in the argument it’s also worth asking ”pay taxes with what?” which also quickly makes the idea of taxing valuations obviously absurd.
It would force any value creator to sell his creation, which basically destroys the mechanism from which all welfare for anyone in our societies currently originates.
How do you handle your neighbor who discovers he has a $2m Pokémon card in his closet? Is he forced to sell it to pay the 5% if he doesn’t have the cash on hand to pay the tax?
It’s a messy proposition. I’ve yet to hear a clear proposal that doesn’t have sticky edge cases.
Generally speaking, that's the point. The wealth tax is trying to combat wealth inequality and the only way for such a policy to be effective is if those with considerable assets wealth decreases with time.
> How do you handle your neighbor who discovers he has a $2m Pokémon card in his closet?
Usually that's handled by having a minimum asset requirement before the wealth tax kicks in. 100M is what I've seen. It'd be a pretty easy tax to make progressive.
> It’s a messy proposition. I’ve yet to hear a clear proposal that doesn’t have sticky edge cases.
I've given the proposal I've seen in a different comment. Perhaps you didn't see it? But in any case, taxes are always messy. It's not as if you can't refine them with more and more amendments to address different scenarios as they come up. I don't think the "messiness" should be what keeps us from adopting such a tax system. There will almost certainly be a game of cat and mouse between the regulators and the wealthy regardless the proposal.
Don't let perfect be the enemy of the good.
In From 1965 to 1995 the richest man in the world had about $30-40b in today's money. This was more than the 1945-1965 era, but way less than the mess pre-war thanks to aggressive action to limit wealth.
Today the richest man in the world has $300b, Rockefeller levels before the 1929 crash.
Also because taxing income (or other cash) is disinflationary. Taxing assets is inflationary because it forces sales.
I can see how taxing assets could result in more selling than would have occurred otherwise.
But all else being equal, an increase in selling tends to put downward pressure on prices. So I don't see why an asset tax would be expected to cause inflation.
The real solution though is for the legislative branch to not be beholden to those same people and be able to quickly and effectively close tax loopholes as they are discovered.
How does that work when a house is used as collateral on a loan? Or artwork?
The loans are just a symptom, the problem is in the Estate Tax, and those loans are being used as a tool to wait out the clock and then dodge dynastic taxes entirely.
Remove the final loophole, and they'll stop playing weird games to get there all on their own. Plus it'll be way less-disruptive to everyone involves in regular loans for regular reasons.
You're missing the loophole, it's the the "step-up basis" rule, which dramatically affects the amount of tax on that liquidate-to-repay event.
1. Repaying 1 day before the owner dies: Liquidate $X, of stock, which 90% of it are capital-gains, heavily taxed.
2. Repaying 1 day after the owner dies: Liquidate $X of stock, which is now considered ZERO gains, almost no tax.
This massive discontinuity also applies when it comes to the transfer of stock to inheritors, and any taxes they might pay for liquidating it. A day before, they get a stock that "has grown X% in Y years." A day later, they get a stock that "has grown 0% in 0 days."
> It could delay paying taxes until you die, but you can't escape it.
But they did escape the taxes, or at least the "gains" portion of them! For decades, the unrealized gains in growing assets were "eventually" going to happen someday... Until, poof, all gains have been forgotten.
Also the term "asset" exists and is used in accounting
How? What is the difference between "stock" and "inventory"?
We all know that 10 million Ys maybe not sold for $10 billion dollars but it gives you enough leverage to buy a social network and name it Y
This sounds like a 2-party government problem, not a tax problem. Plenty of countries do just fine spending that money to provide healthcare, unemployment, etc to their citizenry. Only really seems to be the US that views this as a negative
https://www.statista.com/statistics/283221/per-capita-health...
US $12k
Germany $8k
UK $6k
Medicaid + Medicare is 22% of all US federal spending. Defense is 13%.
Here is another link to the OECD numbers directly. Is is 12k public, 14.8k Public plus private.
https://www.oecd.org/en/publications/health-at-a-glance-2025...
Can we agree on the 12k and move on now?
The USA is very corrupt, true. But getting rid of the "huge administration" and burning tax receipts is not going to solve that. How could it?
One of the roles of the state in a modern society should be to ensure no one is left behind to starve, wither and freeze amongst the incredible resources we (as a society) have accumulated.
That takes administration. That takes resources. That is what your taxes should be used for.
I agree that far too much is used to give aid to the powerful, but the solution to that should not be to condemn the weak.
Burning taxes and de-funding the administration is exactly that: condemning the weak.
Except for the fact that, without first solving the problem you responded to, yours is impossible to solve
Taxes raise inflation as they increase the production costs. If you tax too much wealthy people, they will leave, and take their capital away to invest it elsewhere. This as a result will lead to inflation due to lack of available capital for production.
Are we not tired yet of the various versions of the Reaganomics boogieman? When are we going to grow out of trickle down economics mentality?
There are different kinds of wealthy people. Some built their wealth through talent and luck. Some inherited it. Some gained it through state cronyism and clientelism.
Some own scarce assets (like real estate). Others created new assets (e.g., startup founders).
You can dislike Elon Musk, but his owning a large stake in Tesla doesn’t make others poorer. That’s not true of a landlord who corners housing supply in a city.
Wealth taxes are essentially revenge taxes without a clear objective. France tried one for years. It was costly to administer, riddled with exemptions, encouraged avoidance instead of productivity, and sustained an industry of tax specialists. The revenue was largely recycled into clientelist spending, sometimes increasing the wealth of the same elites (e.g., via housing subsidies).
If the goal is to curb land hoarding, implement a land value tax. If it’s to reduce dynastic concentration, tax large single-heir inheritances more heavily and lower the rate when estates are widely divided. If it’s to reduce cronyism, cut state spending, simplify regulation, and strengthen competition.
You say this like it’s a bad thing.
Hard disagree.
I fully believe that we are collectively responsible for all of our problems because we are a shitfuck tragically tribal species who, in a world of ever expanding tribe sizes, desperately cling onto tribe sizes that our tiny brains can handle, hence becoming tribal about a myriad of trivial and pointless things like sports, racism, which bathroom someone uses or which policy on immigrants one supports. Dunbar's number.
And we're so tied up in these micro tribal problems that we completely ignore the macro tribal problems that affect every single one of us. We're shit out of luck we literally evolved to act like this and there's nothing we can do to stop the behaviour; it's innate.
Global temperatures are still rising and will continue to do so. We can try to stop it but we won't be able to.
If this causes the extinction of the political lobbyist, I'm fine with that.
PACs are just groups that do advocacy of some sort. Some do things like advise congress people on legislation they'd like passed, some run ads to campaign for positions or candidates, some advocate for movements.
What they're not supposed to be doing is directly coordinating with a candidate, or running ads just for a candidate. But that's a line that has been continually fuzzed.
An example of a good PAC might be something like the HRC (human rights commission) that campaigns for LGBTQ rights.
The supreme court is majority activist judges. Why cant new judges undo the old activist judges wrongly decided law? Why are the other new judges suddenly activists?
who could have seen this coming.. twice.
If there is no justice system enforcing the law and its requisite consequences, then there is no justice. I don't think those in power understand the anarchy that their intentional dismantling of the justice system has and will cause, and how the blowback from that anarchy will be visited upon them.
Most people don't care that much about the economy, they make up their minds based on other issues, then find a way to rationalize the state of the economy with that choice after the fact.
Don't worry - it's still there under the orange makeup. jk; I think you may have misspelled "collar"
To me they have the classic problem as with non-profits: “If we solve the problem we cease to have a cause to exist.”
Taking a look at what’s been accomplished this past year, it’s a lot of token Executive Orders on renaming things, a token deportation effort, no material change on mass legal immigration, nothing happening on the voter ID front.
It’s just theater until they lose out in the midterms and they to rally their base again in 2028 to “Save America” or “Keep It Great” or whatever hokum.
Democrats will undo it all when the pendulum shifts.
> Democrats will undo it all when the pendulum shifts.
It is impossible. Will they give reparations to blue cities? From what money?
Likewise institutions - it is easier to corrupt and destroy them then to build them anew.
Amd crutially, the right wing supreme court needs ro be enlarged or new constitution written for the bad precedents to be changed.
> token deportation effort,
The whole thing is bigger size then most militaries.
> no material change on mass legal immigration,
The whole classes of legal immigrants were suddenly ruled illegal and are violently mistreated.
> nothing happening on the voter ID front.
Republicans are trying to make voting for blie places harder.
* Jan 6 was a fedsurrection, and also simultaneously all innocent people that needed pardoning (Pardoning the feds?)
* World Liberty Financial receiving billions selling out American interests worldwide? Never heard of this but Burisma was worse!
* The Raffensperger call was no big deal there were attorneys on that call. Trump's personal (now disbarred) attorneys, of course, not there to represent America's interests but how's that the big deal?
* Also who's Raffensperger? But did you see those boxes under the table! What do you mean the clip is longer than 6 seconds that's all I saw on the infinity scrolling apps.
https://rooseveltinstitute.org/publications/15-years-after-c...
No analysis if the politician was acting against their constituents interests... Pretty embarrassing paper to put their name on. I can see why there's no coauthors.
Also they conflate political ad spending with issue awareness ad spending, which is a borderline malicious.
https://en.wikipedia.org/wiki/Trump%E2%80%93Raffensperger_ph...
This is the infamous call where Trump, according to the recorded tapes, tried to overturn the 2020 presidential election results by demanding that Raffensperger "find 11,780 votes".
We the people actually have a relatively high amount of power in our states and communities. We just don't use it. The real solution is to convince the masses to pay attention, which is harder today than it ever was.
People ever rule through direct decisions or are enslaved into alien agendas on which they have no agency.
(although in a UK context, it's looking highly likely that we'll have a "changing of the guard" in the next election with both Reform and Green party making significant inroads at the expense of the more established Conservative and Labour parties)
Personally I think ideal set up is a system which grants quite a of power to a small handful of people, but makes it very easy for those people to be removed. This is typically the model that works best in business and other cooperative pursuits anyway.
Throwing more people in the room with different opinions will ensure significant decisions can almost never made. Any policy too far to the right or too far to left will be watered down. The result is that you'll be led by centrists who can't really change anything and anything they do change will be disliked by everyone.
I think ideally you want a CEO type leader of a country who has a lot of executive power, but that leader has a board who provides oversight, then ultimately the public are all shareholders who collectively hold the company and it's leaders to account.
I'd argue generally speaking we want to grant more power to our leaders than we do today, but make them much easier to remove and have a well design constitution so certain things are legally impossible in the same way a CEO can't just decide they now have 100% voting rights and no longer need to listen to share holders.
The solution to a bad CEO isn't to have 10 CEOs. The solution is for the shareholders to boot them for a better CEO.
Because congress and senate in America are soooo active ...
Instead general elections are theaters were all that is voted is which clown is going to have a blank check.
It ’s nigh impossible to invent a system that truly formalizes collective will with the goal of optimizing for everyone’s best long-term interests, minimizing unhappiness.
For example in the US, the executive order is a massive problem. Citizens united as well. And for all democracies the natural appeal of strongman politics is a huge problem.
Every attempt at government overreach really needs to be questioned. I don't say rejected, just questioned. How will it be used by future powers? Is the tradeoff worth it? Can it be temporary? Do we even have a way to claw it back if it turns out to be detrimental? Is it too subtle and nuanced that the majority will miss seeing it? etc.
I think this is an inherent human problem that prevents us from overcoming it... history has proven that the more equal everyone is, and the less individual ownership they have, the lazier and more bored they get.
Look at the previous attempts at socialism... people stop caring when there's no goal to work towards, they can't all be doing the same thing and just be happy, because humans are naturally competitive. We desire things other people don't have, like possessions, money, or power.
But of course success is relative to some cultural values. We could just as well wonder about success and failure in implementation of any political system.
The most remarkable trait of humans is cognitive plasticity, so determining any natural tendency that would be more inate than acquired is just a game of pretending there are hypothetical humans living out of any cultural influence that would still exhibit predominent behavioral traits.
Competition is a social construct. There are people out there whose biggest concern is keeping focus on enjoying what they are, freeing their attention from the illusion of possession, avoiding any financial/material bounds they can and staying away of contingent hierarchical servitudes.
They are also many people who holds desires for both of these perspectives, or any interpolation/extrapolation that they can suggest.
Like a pragmatic meritocracy. We accept that there will be cheaters, and we won't catch or stop them all, but we have some hard limits. Do we care if you stop working so hard once you hit $1b? Maybe we'd even prefer that you did stop working (against societies interest!)?
This wouldn't even remotely resemble the communism bugaboo. It's basically saying, yes greed can be good, but at some point it gets ridiculous.
Imagining better systems before doing that is just a form of xkcd’s nerd sniping.
And the biggest challenge to representative government might well be that most people are terrible at engaging it productively. Voting is the bare minimum and most people don’t vote (let alone organize and lobby effectively). Some significant portion of those that do vote can’t correctly draw a line between policies they’d like and candidates who intend to work on delivering, and that’s before we get to the portion of the population that may not correctly anticipate policy outcomes or even really understand policy as a concept.
The system has actually been functioning surprisingly well considering, and as catastrophic as recent elections could be seen as, the outcome arguably represents a reasonable degree of fidelity to the input from the electorate.
If we still hold free and fair elections, the task of those who want representative government is to change enough of the electorate first.
China’s qualifications for influencers thing is interesting by fundamentally doesn't address the power of social media publishers.
And the corrupt, bought politicians are the ones who would need to ratify it.
It costs money to run for office. Before Citizens United, it was hard, limited, traceable donations, from individuals. No corporations, no soft money, no legal dark money. Now money has flooded in, with far less accountability.
Most - maybe all - hot button issues have much more moderate takes than any party national committee positions, in the bluest of blue states and reddest of red states the actual individuals have much more consensus on every issue
Whatever the founder’s initial reasoning or lack of inspiration for national referendums for federal law passage doesn’t seem to be relevant today
It is apparently not much of a risk to your seat if you don't represent the interests of your people because the people have become tribal and it is only their tribe they vote for with very little effective criticism of the leaders in their tribe. (it's not that complaints are nonexistent, they just don't result in anything)
The hard part is this has been true going all the way back to the stone age ever since we elevated the first person arbitrarily to chief. There has been no model of government developed since that is immune to this. I really don't know how to get around this and it depresses me that we will always be held back by the slimiest who abuse systems.
Corruption is happening out in the open and there's still so many people shrugging in response. One good push back from everyone all at once would fix a lot of things quickly. But that implies the people are united and not instead driven into manufactured conflict by said interested parties. It's basically enough that we're in a post truth era as of now. I don't know how we come back from that
Anyways, repealing Citizens United would be a good first step.
That, and the fact winning a senate seat costs on average $26.53 million [1]
You can't self-fund, that's 152 years of your $174,000 salary.
Where do you suppose the money comes from, and what do you suppose motivates the donors?
[1] https://en.wikipedia.org/wiki/Campaign_finance_in_the_United...
Our media landscape has people focusing on basically everything except what we need to be. I am not sure that liberal democracy will survive the information age. So much effort goes into the process of argument, we aren't as a whole really thinking about how to solve our very real problems.
China's technocratic rule, after some, shall we say, growing pains (hunger pains? Is it fair to say that when millions of people starved to death?), seems a lot better at creating a coherent strategy for economic growth and international soft power.
One of my great fears is that democracy was the right model in the past decades and centuries, but that it won't keep up with the laser focused technocratic rule that a competent bureaucracy can potentially muster.
But I take and am a bit heartened by your main point - while the best case authoritarian regime can plan and execute more quickly and with greater efficiency than representative government, the worst case authoritarian govt is much much worse than the worst case possible with a functional democracy.
This requires that those in/with the power actually have altruistic, or at least not solely selfish, concerns. How rampant is government/bureaucratic corruption in China?
I elided the population starving part in order to not distract from the possibility of truly selfless governance strategy. It may very well be the case that millions starving is considered "acceptable losses" ("the needs of the billions outweigh the needs of the millions") in executing on that strategy. Which, make no mistake, would be truly tragic and should be undesirable. But that not everyone sees it that way is really what we're fighting against.
"I have a machine that feeds everyone, no one shall go hungry."
"But mah profits!"
"You only need profits so you yourself can eat, but that's now a solved problem"
"But mah profits. How will we know who's winning?"
Millions starving during the Great Leap forward was very much NOT part of the plan, it was the result of some very misguided agricultural practices.
My point is that in the same period, China has gone from "oops we accidentally caused the 2nd largest mass starvation event in history" to "we have the largest high speed rail network and manufacturing base in the world and nobody is even close."
While the US went from "what's a postwar superpower to do? How bout some megaprojects?" To "I'm drowning in entitlements and houses now cost the same as the average lifetime GDP per capita".
Also, China has its own real estate bubble, so it is not immune to those issues. At least in the US people have some recourse at the individual level.
The US elected a convicted fellon, the corruption is a feature.
There is no such thing as (truly) representative government. To the limited extent that groups of people can at all be represented (which is a whole other questions) - governments are generally not about doing that. Yes, many world states have electoral systems where people can vote for one of several (lists of) candidates or parties, but the claim that in the normal and uncorrupted scenario, the elected properly represent the populace/citizenry - does not, I believe, stand scrutiny.
Which is to say, don't try to "find a way in which candidates aren't corrupt and bought off"; that is in the core of democracies in money/capital-based economies. At best, the elected will act according to some balance of influences by different social forces, some being more popular and some being powerful and moneyed elites or individuals. If you want that to change, the change needs to be structural and quite deep, undermining state sovereignty and exchange-based economy.