Let me round out the entire scheme of Wealth Taxation in this post. Just a friendly reminder - we are not talking of a tax increase in advancing this proposal. The issue is the sources of revenue, not the amount. There may be all sorts of good reasons for a tax increase. In fact, given the size of the Federal deficit, there probably are. But that is not the issue here. Whatever the revenue need, X, it remains the same X.
With that caveat:
1. Estate Tax. An effective Estate Tax is a necessary pendant to the annual Net Wealth Tax, and the stopping point of the whole system. This is the point where all assets are appraised at present fair market value, and taxed accordingly. There isn't too much to add, since the United States does impose an Estate Tax at present, in a format that doesn't need much tweaking. The schemata will be pretty much the same, except that the progressive rates will be much higher, rising to 70% and beyond for huge estates. (The definition of 'huge' remains to be determined.) It's the same story as Akio Morita in a previous post - in three generations, we want to reduce the fortune to the starting point. I don't see this as class warfare. The present level of exemption and credit, even if reduced to 2015 levels, is more than enough to provide younger generations with a solid starting-off point and even a little investment capital. But it is not enough to entrench them in the ranks of the super-rich.
The object, as always, is to create an open economic horizon for Americans of all classes.
2. Consumption or Value Added Tax. A Net Wealth tax fits easily beside a consumption or value added tax, which could increase the progressivism of the tax system and lower the already mild bite of the annual return.
3. Utility Taxes. The Net Wealth Tax also fits nicely with utility taxes for roads, highways, harbors, and so on.
4. Social Welfare Taxes. As noted earlier, collection and administration of FICA and Medicare taxes are unchanged.
Summary. Though this is a short post, this completes the entire tax template. The lynchpin is an annual Net Wealth Tax, supplemented by a more aggressive Estate Tax. Other policy-based taxes fit easily into the scheme.
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