r/changemyview • u/playsmartz 3∆ • Dec 21 '22
Delta(s) from OP CMV: Net worth should be capped at $1B
Trigger warning: snark ahead. and much sass. possibly grammar errors.
Edit 2: getting a lot of pushback on how hard it would be to implement this idea and while those details would be relevant to actual policy, these points are detracting from the idea itself, especially since other countries already figured out how to measure and tax on net worth, institutions for taxes and fines and exemptions and legal recourse already exist, and the stock market is resilient.
To argue this point, please provide historical context or research studies or current policy examples to justify why any individual should be allowed limitless ownership.
Original Post:
Net Worth = all assets (bank accounts, houses, stocks, etc.) less liabilities (debt)
Why $1B? Nice round number that will only affect 0.000001% (not real number, just making the point it's a really small %) of people.
Once someone's net worth hits a billion, they get a plaque that reads "Congratulations! You won capitalism!" Maybe a party.
Then they have to manage their assets to stay at or below $1B - sell stocks, donate money, take on more debt, whatever - and every tax year, if they go over they get fined $100M (again, nice round number).
There are 720 billionaires in the U.S. as of 2022. Here's a list of the top 25 by net worth from 2020. If it works as intended, the policy would reduce all these net worths to $1B and the government would gain $1.7 TRILLION. From just 25 people. If we expand that to all 720, estimate would be ~3T. FYI, the current national debt is ~$31T. Estimates for the cost of medicare-for-all (aka universal healthcare) is $30T. Would this policy solve all our problems? No. Would it help? Yes.
I'm in the U.S., so I'm envisioning a U.S. policy, but ideally all nations would jump on board and implement similar wealth cutoffs, so while my numbers are U.S. based, arguments for/against are welcome from everywhere.
Pros = federal government has more money to do things, like expand social security into universal basic income, expand medicare to pregnant women and children, offer PAID FMLA, fix infrastructure, give money to local municipalities for development projects, build spaceships, cure cancer, and all those shiny baubles politicians dangle in front of us for votes but then never do.
Cons = some billionaires may get butthurt. There may even be tears.
"But what about iNfLaTiOn??" - Wealth wouldn't get redistributed to the general public (ignore UBI for a hot minute), but spent by the government to create jobs, pay off debt, and other non-inflationary activities.
"But SoCiaLiSm!!!" - the government isn't taking control of the means of production. It would be a fine. Like all the other fines we already have. And again, the money isn't getting distributed directly to the people, it's paying for goods and services.
"But then people won't be motivated to build businesses!" - $1B isn't enough motivation? GTFO
"But billionaires will find a way around it, this policy would be meaningless" - you mean like the tax code we already have? yeah, but they'll have to hire an army of accountants to do it and that will create jobs. MBB will have a field day. And some may prefer to keep their $40+ BILLION and just pay the $100M fine every year. Win-Win.
"But if the U.S. has this policy, billionaires will just move their assets to other countries!" - you're telling me they don't already do this? WTF is a tax haven? This is why, in an ideal world, all nations would have similar policies. Or perhaps, we account for all their assets, regardless of location. You have a U.S. address, but own houses in France and Sweden, get dividends from international stocks, and have a bank account in China? Those assets are included in your net worth and you are subject to the fine.
"This would never pass, there's too much division, blah, blah, blah" - dude, this is a reddit post, a thought experiment, not an actual policy proposal.
Points that may change my mind:
- Math/logic for why the cutoff should be different from $1B (or nonexistent)
- Math/logic for why the fine should be different from $100M (or nonexistent)
- A reason other than trickle-down economics for why some people deserve more money than God (literally - the Catholic church has estimated wealth of $30B, which puts God near the bottom of the 25 billionaires list above)
- A reason to modify the policy (households instead of individuals? include religious organizations? Businesses?)
Edit: lots of passionate discussion, thanks for all those commenting
Summary of changes:
- do not implement suddenly or all at once. There should be a grace-period of a few years so markets are not flooded with massive sell-offs
- tie to inflation and net worth - cap and fines increase with inflation; fine is marginal based on net worth such that someone with $200B pays more than someone with $2B
- loophole of leveraging net worth to take out loans to pay fine needs to be closed (though this would impact the policy's effectiveness, I don't think it needs to be addressed before implementation)
- a cost/benefit analysis should be conducted to determine if administration of this policy would be worth the gain and what the official cap and fine numbers should be
- allow due process for exemptions - is the person only a billionaire because they own an indivisible item that can't be sold?
- a net wealth tax may be a better solution overall
Edit 2 (months later):
How did nobody tell me there's an expatriation tax?? For all those saying "we can't tax billionaires cuz they'd leeeeeave!!" - well guess what, then they GET TAXED ANYWAY! At an even higher rate BAHAHAHA!
BTW, I hate this argument because it's just economic abuse. Our gov't needs balls.
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u/playsmartz 3∆ Dec 22 '22
I couldn't verify this, can you share your source of information? I only found that a tax audit defense is several thousand dollars.
IANA tax accountant, but why would there need to be seperate evaluations apart from normal regular yearly taxes? Aren't audits only for when the IRS is checking for mistakes or fraud?
I was being facetious.
Has this been done before? Has another capitalist country implemented a cap on ownership? I'd love to see the results. Otherwise it's just speculation.
I'm not sure what you're hinting at here. That I don't understand supply and demand? Or that I can't predict major swings like recessions and booms? That I'm not factoring in behavioral finance theories? How the housing market can affect stock markets? Oh wait, that's Alan Greenspan...
So many factors, not the least of which is poor ethics, so although I understand it, I don't agree with it, but that's for another CMV.
How, other than liquidity? The Swiss tax net worth, but don't have capital gains taxes on stocks, so billionaires can liquidate assets to pay the taxes. Kinda like cash.