Re:Media Owned by Wealthy Are Quick to Tell You Wealth Taxes...
by rayiner on Thursday October 22, 2020 @02:50PM
(#24861833)
That's actually an example of why wealth taxes aren't a great idea. If you invest money back into the business, that might reduce your profits, and therefore any corporate or income taxes. But that investment it will increase the long-term value of the company. Under a wealth tax, that would cause taxes for everyone who holds the stock to go up! In fact, if investing in say a new line of business causes the value of the stock to go up by more than just parking the money in the corporate treasury, a wealth tax creates a perverse incentive to not invest back in the company.
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Re:Media Owned by Wealthy Are Quick to Tell You Wealth Taxes...
by bhupy on Thursday October 22, 2020 @02:55PM
(#24861896)
I generally agree with the opposition to wealth taxes (and no, I'm not wealthy), but I'll try to engage with this by providing what I believe is the strongest good-faith counterargument:
> a wealth tax creates a perverse incentive to not invest back in the company.
This is arguably a "good thing" because one could argue that it's "unfair" that large, high revenue / high income corporations allocate so much capital in our economy. It would arguably be better for them to pay the taxes and instead have that capital be allocated by a democratically accountable body: the government.
Re:Media Owned by Wealthy Are Quick to Tell You Wealth Taxes...
by rayiner on Thursday October 22, 2020 @02:59PM
(#24861941)
> This is arguably a "good thing" because one could argue that it's "unfair" that large, high revenue / high income corporations allocate so much capital in our economy. It would arguably be better for them to pay the taxes and instead have that capital be allocated by a democratically accountable body: the government.
This is certainly "arguable." One of the very few things economists agree on is the market's are better at allocating capital than governments. That's one of the core functions of markets.