Investment gains
Consider a billionaire with a $1,000 investment who earns a 6% return, or $60, received as a capital gain, dividend or interest. If all of Ms. Warren’s taxes are implemented, he could owe 58.2% of that, or $35 in federal tax. Plus, his entire investment would incur a 6% wealth tax, i.e., at least $60. The result: taxes as high as $95 on income of $60 for a combined tax rate of 158%.
A wealth tax is not a tax on investment gains. Why would the percent relative to investment gains be relevant?
If I own enough property that my property taxes are greater then my total income, would you say I'm paying over 100% taxes?
I'm not in favor of Warren's plan and I have reservations about a wealth tax in general, but I don't understand this argument. Or rather, I do understand that the point of this argument is to provide a headline that people can grab onto and be outraged by, but I don't think it's a sound argument.
The bolded part and the sentiment behind it is a pretty good encapsulation of why although I have become much more liberal over the years, I doubt I will ever fully be able to drink the Kool-aid.
What sentiment? My point is that >100% taxation is already possible through property taxes... if you think the Wall Street Journal's argument is logical. If I own property worth $10 million and pay a property tax of 1% then I owe $100,000 in taxes. If my income is less than $100,000, would you say I'm paying >100% taxes? I wouldn't because property tax is unrelated to income. Just like a wealth tax would be unrelated to income.
How on earth can anyone not see any issues or have any problems with the government literally saying you have too much so I'm going to take it from you. The government has to get taxes to exist and everyone wants at least something from the government, I get it. Sales taxes, income taxes - these are transactional and by definition you have the money (if you didn't spend it at least) because you earned it. So I'm on the opposite side of this spectrum. I honestly can't comprehend how taxing at greater than a 100% tax rate of what you actually earned in liquid money is not a huge deal. And yet in this thread and the other thread about Warren's tax raises for small businesses, liberals seem to either be at least totally fine with it, all the way to the extreme of being gleeful to do it. I'm not saying I could never support a wealth tax. In certain situations, and some could say ours right now is one, people have so much stuff because of a biased system that it has to be rectified somehow. I could see myself holding my nose and saying it had to be done. Having it become common place where you can take more from someone than they gained in liquid money in a year...sheesh it's a bridge I doubt I could ever cross and is one of the few issues I have a hard time seeing the other side on...
I'm confused as to why you chose my comment to respond to, it makes me think you've missed my point. The only sentiment I gave was that I disagree with Warrens plan. The rest was just an explanation of why this is a bad argument. Maybe I should give another example to help elucidate my point.
Let's look at the example given by KBecks. It was tailor made to make the point that the author wanted to make. Let's try it with some different numbers:
Consider a billionaire with a $1,000 investment who earns a 6%-9% return, or $60-90, received as a capital gain, dividend or interest. If all of Ms. Warren’s taxes are implemented, he could owe 58.2% of that, or $350 in federal tax. Plus, his entire investment would incur a 6% wealth tax, i.e., at least $6054.60. The result: taxes as high as $9554.60 on income of $60-90 for a combined tax rate of 158infinity%?.
Oh noes, infinity % taxes!!!
If the example breaks when you start filling in different values, that's a sign of a bad argument. The only reason an “infinite%” tax is possible is because the tax is not on income, it’s on wealth. It just doesn’t make sense to express it as a % of income.
Again, none of this has anything to do with my personal opinion of a wealth tax. I think there are good arguments against a wealth tax. I do not think expressing wealth tax owed as a % of income is one of them.