Comment by conductr
9 years ago
It's encouraging people to make their money be productive instead of stashing it under a mattress. That doesn't sound like a bad thing to me.
9 years ago
It's encouraging people to make their money be productive instead of stashing it under a mattress. That doesn't sound like a bad thing to me.
The rich aren't stashing most of their money under a mattress. Gates, Bezos, etc are worth billions, but that wealth is almost all based off of the stock prices in the companies they own percentagess of.
Tax the ownership interest in equities, just as we have property taxes for land ownership.
We could also take the route of the Federal Reserve purchasing up equities (The Bank Of Japan does this [1]), issuing deposit accounts to citizens directly (trivial for the Federal Reserve to support this [disclaimer: I work in the financial services industry, and feel qualified to make this statement]), and providing UBI to those accounts using the Federal Reserve as an intermediary/conduit (lookout Blackrock and Vanguard! there's a new index fund manager on the block!).
Voilà, Citizen's Dividend.
EDIT: The Federal Reserve operates independently of the US government, and does not require Congressional or Presidential approval to perform this "monetary policy". [2]
"Although an instrument of the U.S. Government, the Federal Reserve System considers itself "an independent central bank because its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government, it does not receive funding appropriated by the Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms."
[1] https://www.bloomberg.com/news/articles/2017-07-18/boj-s-etf...
[2] https://en.wikipedia.org/wiki/Federal_Reserve_System
Equity is already taxed upon grant. Other stock is taxed when they decide to exercise it.
Are you proposing their equity also be taxed "at rest"? How would that work?
1 reply →
Yes they are. They are shifting trillions into tax free foundations, trillions offshore, and trillions into corporate stock buy backs.
When you have trillions you just need a bigger mattress, like Ireland, for instance.
Who has trillions ?
Inflation does that. Cash in your mattress loses 2% a year. A wealth tax would presumably tax productive wealth as much as unproductive wealth.
> It's encouraging people to make their money be productive instead of stashing it under a mattress. That doesn't sound like a bad thing to me.
It is, because storing money under a mattress is equivalent of investing in money itself. As OP said too, it is like you lent your money to all the other investors in the economy (because you taking that money out of the economy reduces the prices of capital goods, which means they can now acquire it for cheaper). This results in wealth creation, which you benefit from when you take the money out from under the mattress.
This of course, can only work as an active investment strategy if you have a fixed or predictable money supply. For an inflationary currency such as any fiat currency, you will just get screwed.
This works great for cryptocurrencies for instance, people keep talking about how nobody has any incentive to invest in Bitcoin projects if just holding it will make it go up. Well, when bitcoin holders hold bitcoin, bitcoin economy still grows, and the purchasing power of their bitcoin goes up.