A bit of a disappointing article in that it didn't even mention that this used to be the case in the US (or at least something close to it)[0]. Does anyone have any more material on what the implementation for this would look like? Would billionaires relocate? Would it affect where hopeful start-ups are founded?
I don't think it would really impact startup entrepreneurs much, tax rates at a billion dollars are basically not going to impact anyone: the impact would be on those in the ~100m+ range who will start trying to restructure their investments in a way to avoid the bill.
How exactly this would shake out would depend a lot on the exact specifics of what gets written down and are impossible to predict based on a high level description, e.g. few would have predicted an increased investment in oil wells due to the 91% marginal rate before.
The only thing people should be sure of is that you will definitely not raise whatever headline number you compute assuming this is a static system that does not adapt.
> But that’s nothing compared to the top US rate in 1944: a whopping 94%, which was applied on all income over $200,000. That’s equivalent to $3.45 million in 2023 income.
> Would billionaires relocate? Would it affect where hopeful start-ups are founded?
Their wealth doesn't necessarily leave with them. Where else will they invest in capital markets? The chokepoint are the very capital markets that enable the ongoing preservation of wealth. Think property taxes but for securities (if income tax evasion is a consideration by leaving the jurisdiction). There are less than 730 billionaires in the US.
If you're only starting a startup to become a billionaire, we could probably do with less of that based on what results. People will still build (most startups fail, and I'm going to argue most of those folks don't believe they're going to become a billionaire), just people with different (better?) motivations.
Right, most of that wealth would be in stocks and such. You realize that wealth into cash and you get taxed, and the stocks get owned by someone else and you are not relevant anymore. Though I'm sure plenty of ways around it.
Once they reach $100bn, confiscate all their wealth and make them start again with a market stall and a small loan (say $1M). Call it Billionaire New Game Plus.
My better solution: On January 1st of each year identify the wealthiest billionaire and just liquidate that one individual. Then everyone can still play the game where we all try to gain more wealth, but with a little meta-game included where you don't want to get too rich.
I think US hiked tax rates to finance the war because of the gold standard. Once it was cancelled the government was able to finance military operations simply by printing more dollars, coupled with other crypto-like tricks for artificially driving demand for USD:
- economic/millitary aid to various countries around the world ("airdrops" in crypto-speak)
- petrodollars: denominating oil prices in USD (similarly how Ethereum prices its gas in ETH, and makes ETH the only allowed medium-of-exchange to purchase ETH)
Don't just tax them. Exchange the taxed amounts for non-monetary, signaling reward ("merits") - a reward one can get only, when surrendering economic value to the public. Rich folks perceive money primarily as a signal of their competence (which gets translated to status) and scarcity of merits could make them being craved by all.
[0]https://en.wikipedia.org/wiki/History_of_taxation_in_the_Uni...