Taxing wealth is ideal because it ensures that wealth is being dedicated to the most productive use....
Who decides what is "most productive"?
Simple: the highest yield the investor is willing to accept for the risk they take. The effect of a wealth tax as I understand it is to encourage money to be pushed towards higher risk, higher yield ventures to compensate for the erosion of the value of that wealth through inflation and the tax. It's not a philosophical or authoritarian decision - "I shall decide what is most productive!" - but an economic and pragmatic one. Would you be willing to sit tons of cash in a term deposit earning 4% if inflation was 2% and your wealth tax was 2%?
Life is much better when you just worry about yourself and your own well-being and don't waste your time worrying about (or being jealous of) what others have.
Avoids the problem nicely, and is one of the fundamentals to the Mustachian way. =)
However, it does not negate the prospect of those with wealth corrupting the political system and passing laws to take your stuff away to give it to them. It is awfully lefty to like redistribution, but only if it goes from the rich to the poor, not the other way. It is naturally pure coincidence that many who express lefty views are likely to be on the receiving end of such redistribution. ^_^ (That's a criticism of unenlightened self-interest and stereotypes of lefties, not of social welfare. I'm just snarking)
One idea that I have to blunt the influence of wealth on politics would be a graduated tax on political contributions and lobbying, starting as a small percentage for the first few thousand dollars then growing on a logarithmic scale such that massive amounts from a single source spent on political influence are taxed at 99.9%.
As unpalatable as it may seem to many, I think that humanity at some point is going to have to embrace some eugenic principles and be much more selective about the nature of any new humans we bring to live on our planet. The right for anyone to procreate as much they see fit will ultimately hit a wall as the planet becomes increasingly more crowded. It seems reasonable to me that humans have a collective interest in insuring that new children born have good prospects and posses the traits needed for a reasonable shot at a successful life.
I agree in principle with both of those ideas. However, as you have well noted, in practice they are not feasible. I also think it would be amusing as an alternative to force all political contributions to be taken anonymously into a central collection, from which parties are allocated funds based on the proportion of votes they received in the previous election.
I take heart in knowing that there is a negative correlation between wealth and fertility, which appears to taper off around the replacement rate. That at least indicates that without further intervention on the parts of beneficent eugenicists the problem will slow (though not vanish) of its own accord. I think the environmental sustainability movement will help to promote the idea of achieving a stable population, too.
As regards the correlation between Christianity, Protestant Christianity in particular, and conservatism, it's more nuanced than appears on the surface. There's a whole body of work in psychology dedicated to understanding the Protestant Work Ethic. I also want to direct people to a recent paper I found of interest, which found distinct correlations between dogmatism, needs for order, structure and closure, death anxiety and fear of threat or loss with conservative political views:
http://faculty.virginia.edu/haidtlab/jost.glaser.political-conservatism-as-motivated-social-cog.pdf. Take a skim.
My personal political persuasion is pragmatic market socialism. There is a place for the market and a place for the State; generally the State steps in where the market fails. The market fails to prevent extreme relative inequality or absolute poverty; the State should prevent this to mitigate overall human suffering. The market fails to guarantee a certain minimum standard of quality and safety; the State should step in to make that guarantee. But it is equally true that the State can overreach: to prescribe labels on shirts that say "do not iron while wearing" or require twenty kinds of licenses and approvals to remove a tree on your own property. To go to one extreme, I recently looked up the planning document for a local council. The stupid thing ran to 800 pages of prescription as to what you may or may not do with various kinds of land! "Sustainable development" ie cramming all the people into tiny suburban blocks near a handful of rural towns. Making the assessment as to where the State should start and stop is very difficult; should we be guided by the principle of "if in doubt, let the market work it out" or "if in doubt, rule it out"? Sigh... Obviously the answer is to get Google to finish inventing Skynet and let it worry about these things. =P
I go with "if in doubt, let the market work it out" - you can always legislate later if the problem you foresee actually eventuates, assuming your cost-benefit analysis didn't indicate the consequences would be so severe that it was worth almost any cost to prevent it. If you pre-emptively over-regulate, you can never know what innovation or development might have been possible if the rules were even the slightest bit laxer.
@surfhb: I consider the main failing of Libertarianism to be that it fails to consider that so many people are not free to make their own decisions because they are shackled by their impoverished past (not necessarily financially - emotional, physical or social impoverishment can be just as effective at twisting and distorting one's perspective). Given this, surely Libertarians would be willing to sacrifice some small part of their own freedom to foster much greater freedoms in their fellow man, such that the net sum of freedom and liberty is maximised? (Yes yes, I know, I'm putting up a straw man by suggesting that libertarians are just utilitarians who happen to think in terms of liberty-utils instead of happiness-utils.) BREAKING NEWS: according to wikipedia, the most trustworthy source in the universe, there is a political philosophy known as "libertarian socialism", which is basically communist anarchism but with better dental.
@Jamesqf: the essential argument for 'taxing the rich' is that the 'rich' have already extracted from their workers a surplus - that's where their disproportionate wealth comes from. Were they merely capable of earning more than a typical, less meritorious worker, then that would be fine. The problem is not the fact that some people can earn more than others through their skills. The problem is r > g: it is possible to extract more wealth from an economy by owning a chunk of it than it is by working more productively (which causes g). The rationale for intervening to curb extreme inequality is that those resources were extracted from the workers in the first place, so taxation just takes some of it back. Note that nobody here is advocating the absolute expropriation of the top x%'s assets. I merely note that even if you took 99% of a billionaire's assets on death, that person's offspring would be so wealthy they would never need to work in their lives, nor most likely the generation after that.
How does this affect you? Well, to be honest, more aggressive wealth taxation might even reduce the tax burden on you, particularly if you are a relatively high-earning salaried employee. Wealth taxes don't kick in at normal, plebian amounts of wealth; I like the $1m threshold, because with a 4% SWR that gives an amount around the level of the median wage. Beyond that point, you are rich by any standards. If you are rich, you disproportionately benefit from the advantages that society offers: protection of property rights (police and fire services, a justice system to enforce contracts etc) and a supply of educated workers who perform the actual labour from which r gets extracted.
Make no mistake. Every person on this board is taking advantage of r > g, or will be soon. It's how Mustachianism works - having capital work for you, by taking a chunk from the labour of others. The fact that we do this means we are responsible in part for ensuring at least the minimal well-being of those who through poor fortune, merit or idiocy are not currently and will never earn themselves any delicious r. So we should discuss how best to allocate the weighty responsibility of caring for our fellow beings. And I propose we start by ensuring that those bastards who are richer than us pay their fair share (as long as it's much much bigger than our share!).
EDIT: I accidentally a ( here and an extreme there.
EDIT2: Best phrase ever. I now have a signature!
