Comment by scottlamb
9 hours ago
> The people behind wealth taxes generally handwave explaining how their system will be better at allocating than the people who make a living of allocating wealth effectively because it is all just obvious that it doesn't need to be justified. Poor people will get more money if rich people have less, duh, QED.
Even your straw man version of this argument is pretty convincing to me alongside graphs showing the extent to which our inequality is growing. https://inequality.org/facts/wealth-inequality/ see the "The Top .01% Don't Pay Their Fair Share as They Hoard More Wealth" graph in particular.
This is more a disagreement of values than facts, I think. Some people see the richest man's net worth go from $100B to >$1T and think he deserves that for starting these companies, and taking any of it from him is class warfare. Others think that rich people's pissing contests and lifestyles would be essentially the same if their wealth capped out at say $100B instead, we're morally obligated to use that money to try to meet Americans' basic needs, and using other's taxpayer dollars to allow him to reach those heights (see <https://en.wikipedia.org/wiki/You_didn%27t_build_that>) is class warfare.
High marginal income taxes (it was 91% in 1963, 70% until 1981, there's your compelling case where they turned out to be right, inequality was not growing then like it is now) or a wealth tax are not the same as Soviet style socialism. They still give an incentive for entrepreneurs, innovators, and hard workers.
> This is more a disagreement of values than facts, I think.
It's a disagreement over policy. Increasing inequality is bad, the question is what's the best way to do something about it? There are many alternatives with better characteristics than a wealth tax, like antitrust enforcement to break up concentrated industries and lower corporate profits through increased competition, zoning reform to reduce housing costs so that ordinary people keep more of what they earn instead of paying it to banks or landlords, tax reform to remove existing advantages in the tax code for huge multinational corporations over domestic small businesses owned by ordinary people, etc.
> High marginal income taxes (it was 91% in 1963, 70% until 1981, there's your compelling case where they turned out to be right, inequality was not growing then like it is now)
The high marginal rates in the mid-20th century were fake. The tax code at the time had so many loopholes that nobody really paid them. When the rates were lowered in the 1980s, many of the loopholes were closed at the same time, resulting in the "federal receipts as a percent of GDP" chart looking like this:
https://fred.stlouisfed.org/series/FYFRGDA188S
Which is to say, you'd have trouble using that chart to even guess when it changed.
> Even your straw man version of this argument is pretty convincing to me...
Wouldn't that make it not a straw man argument? It isn't an argument as pointing out an assumption that voting or committee can be better at allocating resources than a free market. It isn't a very well grounded one and it looks wrong when presented on its own but there isn't much I can do about that. It is popular and people find it convincing.