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> 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 wea

> 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/ 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 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.

AnthonyMouse 2mo ago
> 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 https://fred.stlouisfed.org/series/FYFRGDA188S Which is to say, you'd have trouble using that chart to even guess when it changed.
- scottlamb 2mo ago
  > Increasing inequality is bad I'm not at all sure everyone in these discussions agrees on this point! I agree with you not only that this is bad but also that wealth taxes are not the only way to address it. They are a way that is getting momentum right now, AFAICT more than the other things you mentioned, and we may have to choose between voting for a wealth tax (or candidates who support one) or doing nothing. fwiw, I'm really not sure which approach(es) I'd choose if I could single-handedly decide how to reduce wealth inequality. > The high marginal rates in the mid-20th century were fake. I think "federal receipts as a percent of GDP" isn't the right chart to answer this question. Overall tax rate != how progressive the tax is or how high the "effective" marginal tax rate is. On https://inequality.org/facts/wealth-inequality/ https://inequality.org/facts/wealth-inequality/ the "The Top .01% Don't Pay Their Fair Share as They Hoard More Wealth" shows a clear cross-over point where before about 1980 the top .01%'s share of tax was greater than their share of wealth, and after it reversed. That's consistent with the 1981 change I mentioned.
roenxi 2mo ago
> 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.
- scottlamb 2mo ago
  >> Even your straw man version of this argument is pretty convincing to me... > Wouldn't that make it not a straw man argument? I think the "even" and "..." are doing a lot of work in my sentence. You presented a less strong version of the argument than that given by people who support it, thus it is a straw man, period. > an assumption that voting or committee can be better at allocating resources than a free market Would you say we had a free market in the 1970s, when the chart I linked showed the top .01% by wealth's share of taxes exceeded their share of wealth? That's essentially what I'd like to go back to, perhaps by a wealth tax. I would say we had a free market then, showing progressive taxation and free markets are absolutely compatible. This isn't Soviet-style central planning.
  - roenxi 2mo ago
    I'm still a bit lost on what the point of difference is. You seem to be saying that you've seen evidence that makes this "strawman argument" convincing to you, but you don't seem to accept that I've generally argued with people who believe it. If you think there is evidence and it is convincing evidence then the obvious interpretation of what I said seems to be that I'm just being logical and straightforward. I don't see the strawman. I mean I might not know what a strawman is, but I thought it was claiming people were making an argument that in fact they were not. > Would you say we had a free market in the 1970s, when the chart I linked showed the top .01% by wealth's share of taxes exceeded their share of wealth? That's essentially what I'd like to go back to, perhaps by a wealth tax. I would say we had a free market then, showing progressive taxation and free markets are absolutely compatible. This isn't Soviet-style central planning. I mean, sure. I've long argued that the US strategy of printing money and giving it to asset owners is bad. I doubt a wealth tax would help, IMO the real issue is the welfare for wealthy people. Seems kinda dumb and the people claiming that the economy would collapse without it appear to be making up their principles as they go along. But we should all want to encourage wealth. It makes people wealthy.

AnthonyMouse 2mo ago

> 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 https://fred.stlouisfed.org/series/FYFRGDA188S Which is to say, you'd have trouble using that chart to even guess when it changed.

scottlamb 2mo ago
> Increasing inequality is bad I'm not at all sure everyone in these discussions agrees on this point! I agree with you not only that this is bad but also that wealth taxes are not the only way to address it. They are a way that is getting momentum right now, AFAICT more than the other things you mentioned, and we may have to choose between voting for a wealth tax (or candidates who support one) or doing nothing. fwiw, I'm really not sure which approach(es) I'd choose if I could single-handedly decide how to reduce wealth inequality. > The high marginal rates in the mid-20th century were fake. I think "federal receipts as a percent of GDP" isn't the right chart to answer this question. Overall tax rate != how progressive the tax is or how high the "effective" marginal tax rate is. On https://inequality.org/facts/wealth-inequality/ https://inequality.org/facts/wealth-inequality/ the "The Top .01% Don't Pay Their Fair Share as They Hoard More Wealth" shows a clear cross-over point where before about 1980 the top .01%'s share of tax was greater than their share of wealth, and after it reversed. That's consistent with the 1981 change I mentioned.

roenxi 2mo ago

> 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.

scottlamb 2mo ago
>> Even your straw man version of this argument is pretty convincing to me... > Wouldn't that make it not a straw man argument? I think the "even" and "..." are doing a lot of work in my sentence. You presented a less strong version of the argument than that given by people who support it, thus it is a straw man, period. > an assumption that voting or committee can be better at allocating resources than a free market Would you say we had a free market in the 1970s, when the chart I linked showed the top .01% by wealth's share of taxes exceeded their share of wealth? That's essentially what I'd like to go back to, perhaps by a wealth tax. I would say we had a free market then, showing progressive taxation and free markets are absolutely compatible. This isn't Soviet-style central planning.
- roenxi 2mo ago
  I'm still a bit lost on what the point of difference is. You seem to be saying that you've seen evidence that makes this "strawman argument" convincing to you, but you don't seem to accept that I've generally argued with people who believe it. If you think there is evidence and it is convincing evidence then the obvious interpretation of what I said seems to be that I'm just being logical and straightforward. I don't see the strawman. I mean I might not know what a strawman is, but I thought it was claiming people were making an argument that in fact they were not. > Would you say we had a free market in the 1970s, when the chart I linked showed the top .01% by wealth's share of taxes exceeded their share of wealth? That's essentially what I'd like to go back to, perhaps by a wealth tax. I would say we had a free market then, showing progressive taxation and free markets are absolutely compatible. This isn't Soviet-style central planning. I mean, sure. I've long argued that the US strategy of printing money and giving it to asset owners is bad. I doubt a wealth tax would help, IMO the real issue is the welfare for wealthy people. Seems kinda dumb and the people claiming that the economy would collapse without it appear to be making up their principles as they go along. But we should all want to encourage wealth. It makes people wealthy.