Will minimum wage laws work here?

[d9_lives]

Just silly ideas...
Taxing the churches and...has anyone watched The Purge?

 

[Merg91]

Will they move here?

Sen. Bernie Sanders announces a wealth tax that would hit multibillionaires like Jeff Bezos especially hard.
Rival presidential candidate, Sen. Elizabeth Warren, has a plan that would impose a tax of 2% of wealth over $50 million and 3% on wealth over $1 billion.
Sanders’ plan starts at a lower wealth level – taxing those worth $32 million at 1% – so his tax would hit about 180,000 families while Warren’s would affect about 75,000 households.
The sliding scale of the Sanders plan quickly escalates for wealth over $500 million, which would be taxed at 4%.
Here are estimates for the wealth tax bills for several billionaires under this proposal.

 

[mummy1234]

Will they move here?

Sen. Bernie Sanders announces a wealth tax that would hit multibillionaires like Jeff Bezos especially hard.
Rival presidential candidate, Sen. Elizabeth Warren, has a plan that would impose a tax of 2% of wealth over $50 million and 3% on wealth over $1 billion.
Sanders’ plan starts at a lower wealth level – taxing those worth $32 million at 1% – so his tax would hit about 180,000 families while Warren’s would affect about 75,000 households.
The sliding scale of the Sanders plan quickly escalates for wealth over $500 million, which would be taxed at 4%.
Here are estimates for the wealth tax bills for several billionaires under this proposal.

Yes! See, these powerful people in the Greatest country in the world believes in my idea! Hallelujah! The poor have hope now!

And Jesus will approve of the superrich donating a portion of their immense wealth to give to the State which I am sure will do good for the poor...

 

[fzhfzh]

Will they move here?

Sen. Bernie Sanders announces a wealth tax that would hit multibillionaires like Jeff Bezos especially hard.
Rival presidential candidate, Sen. Elizabeth Warren, has a plan that would impose a tax of 2% of wealth over $50 million and 3% on wealth over $1 billion.
Sanders’ plan starts at a lower wealth level – taxing those worth $32 million at 1% – so his tax would hit about 180,000 families while Warren’s would affect about 75,000 households.
The sliding scale of the Sanders plan quickly escalates for wealth over $500 million, which would be taxed at 4%.
Here are estimates for the wealth tax bills for several billionaires under this proposal.

This won’t happen. The stock market and economy will crash from this. Can you imagine the downward pressure on market it will have when people like Jeff Bezos have to sell 4% of their stock every year to pay for this?

 

[ftpofmpo]

from wired: “What we’ve been finding across dozens of studies and thousands of participants across this country,” said Piff, “is that as a person’s levels of wealth increase, their feelings of compassion and empathy go down, and their feelings of entitlement, of deservingness, and their ideology of self-interest increases.”

who does this describe best?

 

[BBCWatcher]

Will they move here?

No, or at least not in any materially different numbers than today. The United States already has a little known but quite important wealth tax: the U.S. Expatriation Tax.

I'm a U.S. person living in Singapore, and consequently I am subject to both the U.S. and Singapore tax systems. In practice what this means (oversimplifying only slightly) is that I pay Singapore first, then I pay the U.S. the difference. (The U.S. tax rate is generally higher.) I'm not "double taxed" -- that's a common and inaccurate mythology -- but I am partially "trued up" to the U.S. rate. My net effective tax rate ends up in between the Singapore and U.S. rates: higher than what a non-U.S. person in Singapore would pay, but lower than what a comparably situated U.S. person in the U.S. would pay.(*)

A proposed, more generalized U.S. wealth tax presumably would slide right into this system. That is, wealthy U.S. persons living in Singapore, or anywhere else, would still owe and pay the general U.S. wealth tax.

OK, so what if they don't like that? Well, there's a solution: they can visit a U.S. embassy or consulate such as the one on Napier Road, pay a US$2,350(**) fee (the cost for a Certificate of Loss of Nationality, Form DS-4083), and irrevocably and permanently terminate their U.S. citizenships. Eduardo Saverin, one of Facebook's co-founders (a citizen of Brazil and a Permanent Resident of Singapore), did exactly that. Unfortunately for him and for others there's a big catch: the U.S. Expatriation Tax. Oversimplifying only slightly, if your global net worth is US$2 million or more, then you have to pay immediate "mark to market" capital gains tax on your total global wealth as you terminate your U.S. citizenship. Moreover, if you have a loved one who retains his/her U.S. citizenship (or acquires U.S. citizenship), you can still leave your estate to that person, but the U.S. estate tax flips to a serious U.S. inheritance tax for that heir.

This won’t happen. The stock market and economy will crash from this.

That's extremely unlikely.

Can you imagine the downward pressure on market it will have when people like Jeff Bezos have to sell 4% of their stock every year to pay for this?

I can imagine that: almost none. One reason is that billionaire founders already don't do this even to fund their day-to-day living expenses. What they do instead, quite often, is they obtain secured loans using their stock as collateral. Interest rates on secured loans are low, and they can defer the capital gains tax. Then they keep increasing the outstanding loan amount, which they can do for their entire lives since they're so immensely wealthy. That's exactly what they'd still do to pay a hypothetical wealth tax, also because they don't want to lose voting power.

There's also something called a charitable remainder trust which many of them do. The idea here is that you irrevocably donate some of your stock to, say, Harvard University. The world's wealthiest university is, technically, not-for-profit and, according to the U.S. tax code anyway, treated the same as a charity for these purposes. Harvard then manages the funds during your lifetime, pays you a regular annuity, and then keeps the remainder when you die. (There are some rules about the amount of the annuity and how it's taxed.) And the tax benefits to this arrangement are enormous, plus you can often get your name on some piece of Harvard real estate and get your favorite 18 year olds admissions into Harvard. (Harvard is careful not to guarantee admission, but if the donation is big enough or bigger and your favorite 18 year old can read and write decently enough -- highly likely with the extra high school tutoring you can easily afford if need be -- wink wink, she/he is admitted.) It's quite likely the tax benefits will be even more enormous with a hypothetical wealth tax, which helps explain why charities and universities generally like the idea, albeit quietly lest they offend their wealthy donors.

And I'm barely scratching the surface, but suffice it to say that a general U.S. wealth tax along the lines Senator Warren has proposed would highly likely be an effective revenue raiser, comparatively hard to avoid and evade, highly cost effectively collectable, and highly non-distortionary. I haven't looked closely at the wealth tax Senator Sanders has proposed, but I'm not giving it much attention purely on political grounds since he's currently polling in third place within his adopted party's presidential nomination contest.

Another factor is that, ceteris paribus, a wealth tax would encourage those subject to it to spend more on goods and services in the here and now. The boost to consumption would stimulate the macroeconomy. Of course government can spend too, and higher tax revenues would support more government spending, ceteris paribus. Broadly speaking, the candidates proposing wealth taxes also have "high multiplier" (high return) proposals for spending, which would also be short-term and long-term stimulative.

I think you've got this exactly backwards. You might or might not oppose wealth taxes for other reasons, but negative effects on the macroeconomy isn't a good reason. It's rather the opposite. Right now most tax systems comparatively discourage the movement, the transmission of wealth and comparatively encourage a static hoarding of wealth, at least for tax deferral if not outright tax avoidance. A wealth tax helps to mitigate those generally perverse incentives, and economically speaking that's not a bad thing. And selective wealth taxes are ancient, notably property taxes (which Singapore has). Property taxes are wealth taxes, too.

(*) Don't weep too much for us U.S. persons, though! Let's suppose instead I work in Belgium. Belgian income tax rates are generally higher than U.S. income tax rates, so the smart play there is to skip IRS Form 2555 (the Foreign Earned Income Exclusion) and take only IRS Form 1116, the Foreign Tax Credit. You're allowed to do that. Then, at some point anyway, spend a little time working in the U.S. again. What happens then is that you get to "bank" up to 10 years worth of the difference between the higher Belgian income tax rate and the lower U.S. income tax rate. Then you can spend down those banked credits to offset your future U.S. income tax in the same broad income category. No other country does this, and it's the sunny, happy side of U.S. tax personhood. Imagine the Singapore government reimbursing you, in the form of lower or zero Singapore income tax, after you come back to Singapore, after a working stint in Belgium, or Japan, or Australia, or Norway, or some other generally higher income tax jurisdiction. However, I like Singapore, thanks. Not everything comes down to money, thank goodness.

(**) The U.S. government charges "cost recovery" for services such as this one, and that US$2,350 amount probably is approximately correct in terms of the actual, average cost to the U.S. government to process one of these exits. I don't think U.S. consular and immigration services -- or most other government services -- should be charged on a narrow cost recovery basis. Such fee burdens are regressive, and I'm against regressivity. But if you're going to levy fees this way across a broad range of government services, it's only fair to apply that same fee rationale to exiting U.S. citizens too.

 

[mummy1234]

No, or at least not in any materially different numbers than today. The United States already has a little known but quite important wealth tax: the U.S. Expatriation Tax.

I'm a U.S. person living in Singapore, and consequently I am subject to both the U.S. and Singapore tax systems. In practice what this means (oversimplifying only slightly) is that I pay Singapore first, then I pay the U.S. the difference. (The U.S. tax rate is generally higher.) I'm not "double taxed" -- that's a common and inaccurate mythology -- but I am partially "trued up" to the U.S. rate. My net effective tax rate ends up in between the Singapore and U.S. rates: higher than what a non-U.S. person in Singapore would pay, but lower than what a comparably situated U.S. person in the U.S. would pay.(*)

A proposed, more generalized U.S. wealth tax presumably would slide right into this system. That is, wealthy U.S. persons living in Singapore, or anywhere else, would still owe and pay the general U.S. wealth tax.

OK, so what if they don't like that? Well, there's a solution: they can visit a U.S. embassy or consulate such as the one on Napier Road, pay a US$2,350(**) fee (the cost for a Certificate of Loss of Nationality, Form DS-4083), and irrevocably and permanently terminate their U.S. citizenships. Eduardo Saverin, one of Facebook's co-founders (a citizen of Brazil and a Permanent Resident of Singapore), did exactly that. Unfortunately for him and for others there's a big catch: the U.S. Expatriation Tax. Oversimplifying only slightly, if your global net worth is US$2 million or more, then you have to pay immediate "mark to market" capital gains tax on your total global wealth as you terminate your U.S. citizenship. Moreover, if you have a loved one who retains his/her U.S. citizenship (or acquires U.S. citizenship), you can still leave your estate to that person, but the U.S. estate tax flips to a serious U.S. inheritance tax for that heir.


That's extremely unlikely.


I can imagine that: almost none. One reason is that billionaire founders already don't do this even to fund their day-to-day living expenses. What they do instead, quite often, is they obtain secured loans using their stock as collateral. Interest rates on secured loans are low, and they can defer the capital gains tax. Then they keep increasing the outstanding loan amount, which they can do for their entire lives since they're so immensely wealthy. That's exactly what they'd still do to pay a hypothetical wealth tax, also because they don't want to lose voting power.

There's also something called a charitable remainder trust which many of them do. The idea here is that you irrevocably donate some of your stock to, say, Harvard University. The world's wealthiest university is, technically, not-for-profit and, according to the U.S. tax code anyway, treated the same as a charity for these purposes. Harvard then manages the funds during your lifetime, pays you a regular annuity, and then keeps the remainder when you die. (There are some rules about the amount of the annuity and how it's taxed.) And the tax benefits to this arrangement are enormous, plus you can often get your name on some piece of Harvard real estate and get your favorite 18 year olds admissions into Harvard. (Harvard is careful not to guarantee admission, but if the donation is big enough or bigger and your favorite 18 year old can read and write decently enough -- highly likely with the extra high school tutoring you can easily afford if need be -- wink wink, she/he is admitted.) It's quite likely the tax benefits will be even more enormous with a hypothetical wealth tax, which helps explain why charities and universities generally like the idea, albeit quietly lest they offend their wealthy donors.

And I'm barely scratching the surface, but suffice it to say that a general U.S. wealth tax along the lines Senator Warren has proposed would highly likely be an effective revenue raiser, comparatively hard to avoid and evade, highly cost effectively collectable, and highly non-distortionary. I haven't looked closely at the wealth tax Senator Sanders has proposed, but I'm not giving it much attention purely on political grounds since he's currently polling in third place within his adopted party's presidential nomination contest.

Another factor is that, ceteris paribus, a wealth tax would encourage those subject to it to spend more on goods and services in the here and now. The boost to consumption would stimulate the macroeconomy. Of course government can spend too, and higher tax revenues would support more government spending, ceteris paribus. Broadly speaking, the candidates proposing wealth taxes also have "high multiplier" (high return) proposals for spending, which would also be short-term and long-term stimulative.

I think you've got this exactly backwards. You might or might not oppose wealth taxes for other reasons, but negative effects on the macroeconomy isn't a good reason. It's rather the opposite. Right now most tax systems comparatively discourage the movement, the transmission of wealth and comparatively encourage a static hoarding of wealth, at least for tax deferral if not outright tax avoidance. A wealth tax helps to mitigate those generally perverse incentives, and economically speaking that's not a bad thing. And selective wealth taxes are ancient, notably property taxes (which Singapore has). Property taxes are wealth taxes, too.

(*) Don't weep too much for us U.S. persons, though! Let's suppose instead I work in Belgium. Belgian income tax rates are generally higher than U.S. income tax rates, so the smart play there is to skip IRS Form 2555 (the Foreign Earned Income Exclusion) and take only IRS Form 1116, the Foreign Tax Credit. You're allowed to do that. Then, at some point anyway, spend a little time working in the U.S. again. What happens then is that you get to "bank" up to 10 years worth of the difference between the higher Belgian income tax rate and the lower U.S. income tax rate. Then you can spend down those banked credits to offset your future U.S. income tax in the same broad income category. No other country does this, and it's the sunny, happy side of U.S. tax personhood. Imagine the Singapore government reimbursing you, in the form of lower or zero Singapore income tax, after you come back to Singapore, after a working stint in Belgium, or Japan, or Australia, or Norway, or some other generally higher income tax jurisdiction. However, I like Singapore, thanks. Not everything comes down to money, thank goodness.

(**) The U.S. government charges "cost recovery" for services such as this one, and that US$2,350 amount probably is approximately correct in terms of the actual, average cost to the U.S. government to process one of these exits. I don't think U.S. consular and immigration services -- or most other government services -- should be charged on a narrow cost recovery basis. Such fee burdens are regressive, and I'm against regressivity. But if you're going to levy fees this way across a broad range of government services, it's only fair to apply that same fee rationale to exiting U.S. citizens too.

Thanks for weighing in on this. Glad we r both pro wealth tax and minimum wage...

 

[henrylbh]

Thanks for weighing in on this. Glad we r both pro wealth tax and minimum wage...

That's because you are employee and don't see the whole picture of business and government

 

[limster]

already mentioned that Warren Buffett disagrees with minimum wage that distorts the free markets. I tend to agree.

as for wealth tax, while i would like to avoid market distortions, one could argue that the status quo is a market distortion and we should reduce the gap between rate of return of capital and growth (aka Piketty). So a wealth tax that focuses on RoR(C) vs G rather than inequality seems reasonable (each country may have structural factors that cause inequality that should not be blamed on Capital).

perhaps we can start by imposing wealth tax on those who own multiple houses?

 

[d5dude]

https://www.cato.org/publications/commentary/why-europe-axed-its-wealth-taxes

Wealth taxes haven't worked and will never work, there are just too many ways to get around direct taxation.

 

[d5dude]

already mentioned that Warren Buffett disagrees with minimum wage that distorts the free markets. I tend to agree.

as for wealth tax, while i would like to avoid market distortions, one could argue that the status quo is a market distortion and we should reduce the gap between rate of return of capital and growth (aka Piketty). So a wealth tax that focuses on RoR(C) vs G rather than inequality seems reasonable (each country may have structural factors that cause inequality that should not be blamed on Capital).

perhaps we can start by imposing wealth tax on those who own multiple houses?

Already got such tax here, on top of one time taxes like ABSD, property tax is much higher on non-primary residence in Singapore.

 

[limster]

Already got such tax here, on top of one time taxes like ABSD, property tax is much higher on non-primary residence in Singapore.

yes, only for Singapore property, there are some investors who own multiple foreign properties. so far i think Singapore has not been taxing these rich people yet.

 

[d5dude]

yes, only for Singapore property, there are some investors who own multiple foreign properties. so far i think Singapore has not been taxing these rich people yet.

Same as other forms of foreign wealth, hard to administer and enforce.

 

[fzhfzh]

Yes wealth tax is extremely hard to enforce as well. How do you access someone’s wealth? Properties like house, art, stocks etc rise and fall all the time, do you have to audit everyone every year?

 

[mummy1234]

Just read that Bill Gates who is for wealth tax also is for inheritance or estate tax. Maybe we should reintroduce estate taxes in Sg?

 

[BBCWatcher]

Same as other forms of foreign wealth, hard to administer and enforce.

Yes wealth tax is extremely hard to enforce as well. How do you access someone’s wealth? Properties like house, art, stocks etc rise and fall all the time, do you have to audit everyone every year?

No, it's really not comparatively hard. There are only about 75,000 households that would owe any wealth tax under Senator Warren's plan. The U.S. has a relatively high rate of voluntary tax compliance already. (The IRS estimates that voluntary compliance is about 85% of tax legally owed.) Hire a few thousand auditors to chase the other 15%, and they'll generate a massive return for the government.

And you need to be familiar with how the U.S. tax and financial reporting systems already work. The U.S. government already requires disclosure of foreign financial assets, including those assets only notionally under Americans' control. That started with the Bank Secrecy Act of 1970, so it's been around a long time. Penalties are high for noncompliance, and the U.S. government has successfully prosecuted offenses against these financial disclosure regulations. Every year I (a U.S. person) must file a complete and truthful FinCEN Form 114 ("FBAR") and IRS Form 8938 ("FATCA") because I meet the thresholds for both reports. There's no wealth tax at present, but all this overseas (non-U.S.) financial wealth must already be disclosed annually, by law. That's the status quo ante here. (Foreign real property is not currently generally reportable except in estate tax proceedings, but all income from that real property is.)

Moreover, the U.S. already has an estate tax and has had one "forever," basically -- all the way back to the nation's founding. The first U.S. estate tax dates to 1797. Many U.S. states also have estate taxes. The U.S. estate tax is a tax on the global wealth valued on the estate holder's date of death.

Finally, what other taxes are simpler? GST and VAT certainly aren't simpler. In the U.S. those taxes would involve literally hundreds of millions of consumers and millions of businesses, and they're extremely complicated. For example, the State of Connecticut is right now introducing a sales tax increase on prepared foods, and businesses and the tax regulators alike are struggling to define "prepared foods." (Is an energy bar a "prepared food" for sales tax purposes? Interesting question! How about a frozen pie, but the buyer uses the convenience store's microwave oven to heat it up? Does the store have to charge different sales tax rates depending on whether the buyer heated up the pie in store or not? Another interesting question!) Taxes can be complicated, but so what? If they are complicated, it's far better to assign those burdens primarily to large and wealthy entities to bear. Tax complexity is a fantastic argument in favor of wealth taxes that affect only about 75,000 U.S. households, the wealthiest ~0.06% of households among the over 127 million households in the United States.

 

[Merg91]

Not on kind hearted to push other rich to help the poor(except herself), but also 'sacrificed' during SARS.

From edmw.

What's up with u guys? Have something against Drs? Always bashing drs on edmw somehow?

Remember how grateful u were to us during SARS? Sigh....another pandemic may come again u know?

 

[fzhfzh]

No, it's really not comparatively hard. There are only about 75,000 households that would owe any wealth tax under Senator Warren's plan. The U.S. has a relatively high rate of voluntary tax compliance already. (The IRS estimates that voluntary compliance is about 85% of tax legally owed.) Hire a few thousand auditors to chase the other 15%, and they'll generate a massive return for the government.

And you need to be familiar with how the U.S. tax and financial reporting systems already work. The U.S. government already requires disclosure of foreign financial assets, including those assets only notionally under Americans' control. That started with the Bank Secrecy Act of 1970, so it's been around a long time. Penalties are high for noncompliance, and the U.S. government has successfully prosecuted offenses against these financial disclosure regulations. Every year I (a U.S. person) must file a complete and truthful FinCEN Form 114 ("FBAR") and IRS Form 8938 ("FATCA") because I meet the thresholds for both reports. There's no wealth tax at present, but all this overseas (non-U.S.) financial wealth must already be disclosed annually, by law. That's the status quo ante here. (Foreign real property is not currently generally reportable except in estate tax proceedings, but all income from that real property is.)

Moreover, the U.S. already has an estate tax and has had one "forever," basically -- all the way back to the nation's founding. The first U.S. estate tax dates to 1797. Many U.S. states also have estate taxes. The U.S. estate tax is a tax on the global wealth valued on the estate holder's date of death.

Finally, what other taxes are simpler? GST and VAT certainly aren't simpler. In the U.S. those taxes would involve literally hundreds of millions of consumers and millions of businesses, and they're extremely complicated. For example, the State of Connecticut is right now introducing a sales tax increase on prepared foods, and businesses and the tax regulators alike are struggling to define "prepared foods." (Is an energy bar a "prepared food" for sales tax purposes? Interesting question! How about a frozen pie, but the buyer uses the convenience store's microwave oven to heat it up? Does the store have to charge different sales tax rates depending on whether the buyer heated up the pie in store or not? Another interesting question!) Taxes can be complicated, but so what? If they are complicated, it's far better to assign those burdens primarily to large and wealthy entities to bear. Tax complexity is a fantastic argument in favor of wealth taxes that affect only about 75,000 U.S. households, the wealthiest ~0.06% of households among the over 127 million households in the United States.

Maybe it’s not hard, but I still won’t support a wealth tax. I'm a Singapore person living in US. It’s not just about whether it affects me or not, but the whole idea of taxing something that’s already taxed, or not converted to usable money. Yes US has things like property tax, but for places like California, there’s prop 13 that prevents property tax from increasing more than a certain amount every year. So most people don’t actually pay their property’s value in terms of taxes.

Also is the idea that just because rich has more wealth does not mean that everyone else has less. Wealth is not a finite sum game, it’s infinite. When a rich person has his wealth in stock or investments, it’s wealth that is not competing for basic resources. When they are taxed and spent by government, it distorts the market and causes more competition of resources, usually in inefficient or corrupt ways. I might not know the full extend of the cause and effect, but so far no country had ever made something like wealth tax work.

Taxing is also done to discourage things. When you are taxing wealth, you are also taxing excellence and encouraging mediocrity. Wealthy buying a yacht or luxury mansion really have no economic repercussion to the middle or lower class. But the wealth people create when they aspire to such wealth generates the strongest economic growth of capitalist society. When you start to take away such aspirations pieces by pieces, you are becoming a society of mediocrity.

Equality is not about equality of results. I think Singapore did a great job in managing inequality. If you are rich and want to buy luxury multi million dollar lofts, go ahead, the public housing in hdbs are reserved for the rest and not affected by the wealthy, so no matter how bad the inequality is, it really does not affect the poor that much. The rising affluence of the middle class is actually what is causing things like hdb price to increase and has a greater effect on the poor.

 

[BBCWatcher]

I really cannot make sense of what you wrote, fzhfzh. I don't see any logical arguments there, just a lot of subjective arguments. And it's just not true that a wealth tax would discourage excellence and encourage mediocrity. That's utterly, patently absurd.

Government has to raise revenues somehow, and if it's not in the form of a modest wealth tax on the top ~0.06% wealthiest households (Senator Warren's proposal for example) -- with no material impact on the amazing lifestyles that those households enjoy(*) -- then it has to be in other forms. If you have a specific proposal for some other way to raise at least the same amount of revenue, then by all means let us know what it is.

(*) The only impact is that those few households will have a minor incentive to spend more on goods and services in the here and now, not less. That is, at the margins, their lifestyle experiences will be even more lavish and more amazing.

 

[Mecisteus]

yes, only for Singapore property, there are some investors who own multiple foreign properties. so far i think Singapore has not been taxing these rich people yet.

It is going to be bit hard to track foreign properties.

Let's just focus on the ownership of local properties. Increase the tax rates for ownership of 2 or more local properties.

ABSD is just a 1 time fee to deter short term trading of properties. Maybe can consider refunding the ABSD if the property is held for 10 or 15 more years.

But I am against any capital gain and estate taxes. These taxes will definitely hit the majority of middle income people.