I'd guess about half of those over 50 and under 70. It is all locked in IRA, 401k, and pensions where they can't get at it, but that is where most middle class and upper middle class keep their wealth.
Half of those under 50 are on track to have the majority of their wealth be in a retirement fund by the time they are 50 as well.
Most people get their income from wages and then pay the taxes with that. The people who are the target of a wealth tax get most of their income from investments and then to get money to pay a new tax would have to sell that proportion of the investments.
It also doesn't really change anything if they invest in the sort of things that give returns through dividends instead of share price increases, because they reinvest the dividends, and having fewer people buy the stock so they can use the money to pay the tax has the same negative effect on the share price as having more people sell the stock to use the money to pay the tax.
> Property tax has the positive effect of encouraging efficient land usage and discouraging speculation and rent seeking.
Property tax to the extent that it's a tax on buildings/construction does precisely the opposite. Where land is more scarce the most efficient use is to build a high rise to maximize the amount of indoor living space per unit land, which is exactly the thing property tax taxes and thereby disincentivizes.
Asset taxes in general create major perverse incentives because it causes underinvestment in the thing being taxed and overinvestment in any alternative that can act as a tax shelter, whether because the law exempts the alternative for some reason (e.g. lobbying), or it's hard to accurately value and therefore allows for chicanery, or it's in another jurisdiction.
Property tax breaks in my locale lead to empty lots and empty buildings, which is the least efficient use of land imaginable. Property value seems to play a significant enough role in convincing land owners to sell their underutilized land if property taxes provide the activation energy to force them to sell. Otherwise they sit and speculate. So, your argument is convincing in theory, but appears to fall apart in practice. Aside, I’m a fan of Georgism in theory.
> Asset taxes in general create major perverse incentives because it causes underinvestment in the thing being taxed and overinvestment in any alternative that can act as a tax shelter, whether because the law exempts the alternative for some reason (e.g. lobbying), or it's hard to accurately value and therefore allows for chicanery, or it's in another jurisdiction.
I’m sure wealth managers are already devising strategies for reducing taxable wealth based on speculative laws and regulations. This shouldn’t be a reason not to proceed, but instead to put more resources to effective design.
Could you clarify what your locales property taxes are exactly? I'm trying to figure out whether you and Mouse are using the term the same way, in particular, tax on land or tax on buildings or both. (FWIW Wikipedia defines it as both.) It would also be very important to clarify how the tax break is defined, whether it applies to land and buildings equally, for example.
I don’t own a home (and can’t afford to own a home) but I have close to $1M in various retirement accounts. If you’re a first time homebuyer in my area, you need an income of like $150k to afford it and not cut retirement savings to zero.
I’ll be able to retire some day but may never be able to afford a home. It’s an odd situation to be in, nearly a millionaire and only able to afford a meager apartment.