Should there be a maximum wealth?

[Syrinx]

Poll question: Should there be a maximum wealth?

Should the minimum wage have a counterpart called the maximum wealth?

How much it would be is a separate question.

[dipsydoodle]

1. Max wouldn't work

if it gave rise to those who reached it stopping employing others by simply retiring. Would be self defeating unless controlled by punitive taxation.

[Syrinx]

2. I was talking about wealth, not income

[Uben]

3. Hell no!

That wouldn't be fair! For those of us who are trying to see if we can reach the maximum poverty, we need someone to counter our efforts!

[HysteryDiagnosis]

4. They say that if you ask a rich man "how much money is enough?"

he may reply, "just a little bit more than you already have...". I wonder if it is mankind's fear of the unknown and malignant insecurity that drives people to need more more more than they already have. We need to know that there is no solace in accumulating the physical, but piling up ideas and such, now there be the treasure.

[melm00se]

5. who decides?

a while ago there on DU there was a calculator that showed where your income (and this could presumably be extended logically to wealth) stacked up against the number worldwide.

a person with $100 in the bank is immensely wealthy compared to the person who works for pennies a day.

this is one of those "be careful what you wish for" moments, you might get it.

[jgraz]

6. Maximum wealth is not a counterpart to minimum wage. Maximum *wage* is.

There are some pretty good arguments for a maximum wage. I've never heard anyone propose a maximum wealth, but I'm guessing it would be much harder to enforce.

[RoccoR5955]

7. I don't care how hard it is to enforce...

...I have always said that there should be a maximum wage, as well as a minimum wage. All wages over the maximum are taxed at 100%. As far as the concept of maximum wealth, I think it would be a good thing. After all, how much do people really need? How many houses does one person need? How many cars, yachts, etc. You get the drift. There are people starving out there, by no fault of their own, and then there are people who have way too much, and don't feel that they should pay their fair share to take care of all of us. Even though the people who make more, get more in services, these ultra rich, want only to take care of themselves, and to hell with the rest of us.

[TooMuch]

28. A maximum wage would end up limiting grand concentrations of wealth

A "maximum wage" -- actually a limit on income -- would lead naturally into real and effective downward pressure on grand concentrations of private wealth.

Say we had a maximum wage structured as a 100 percent tax on all income above ten times the minimum wage. The wealthy would all suddenly have a personal self-interest in raising the wages of society's poorest. They would also find that their excessive wealth has suddenly become an burden.

That's because maintaining wealth takes money, lots of it. The upkeep for multiple mansions does not come cheap. Neither does insurance for fine jewels or expensive motorcars. Or fees for private money managers. In a maximum-waged society, wealthy households would not be able to meet these costs of wealth out of their smaller incomes. They could, of course, pay their annual costs of wealth out of their already accumulated stashes of cash. To the extent the wealthy did that, their accumulated wealth would shrink.

A much more in-depth discussion of this dynamic appears in "Greed and Good," a book I did a few years back that now appears online to read here, http://www.greedandgood.org/

[POAS]

8. If carried to the extreme

(recognizing it is an impossible extreme but to make a point) not having a limit on wealth would mean that one person or family could own everything.

If limitations don't exist on concentration of wealth then we end up with huge disparities in wealth between the classes which leads to destruction of civil order. As a generalization it can be said that empires are built on concentrations of wealth and destroyed by the poverty which results.

[melm00se]

10. this:

one person or family could own everything

presumes that wealth is a finite commodity.

[POAS]

12. I did state that it was

an extreme example intended to make a point. I take it by your comment that wealth is an infinite commodity.

That said, do you disagree with the premise that wealth concentration leads to poverty at the other extreme which leads to social and political upheaval?

[NaturalHigh]

9. I told a friend of mine a while back that...

if you have too much money to spend, then you have too much money. I don't know that I really favor a legal maximum on wealth to be enforced, but I do believe that it's immoral to be worth billions of dollars when there are people starving in the streets. When everyone is fed and clothed and has shelter and plenty to eat, then I'm not opposed to people accumulating all they want.

Edit for spelling. My typing isn't what it should be this early in the morning.

[POAS]

17. In my opinion

the one precludes the other.

If wealth concentration goes unchecked then there isn't enough left over to adequately take care of all the people.

[opihimoimoi]

11. Review the tax laws of 60 years ago...thats what we had...rich peeps who made zillions had their

monies taxed heavily up a scale...the more ya made...the more ya paid...and it was fair...

[POAS]

13. Indeed it was fair and it actually caused

(arguably) more wealth creation by encouraging reinvestment as opposed to profit taking.

[madokie]

15. Exactly what is needed

[opihimoimoi]

21. The GOP and CORPs made drastic changes to favor lower rates

for the Mega Rich

That should be reversed somehow...

[Orsino]

14. Sorta-kinda.

Not an absolute limit, perhaps, but taxation could effectively cap wealth while still providing some incentive for extra productivity.

[POAS]

19. Capping wealth accumulation by

means of the graduated income tax does indeed encourage productivity by increasing the incentive to reinvest corporate profits as opposed to taking the profits out.

[Stinky The Clown]

16. I think we woujld do best to do thjis with a tax law, not a max law.

[POAS]

18. That is and was the purpose

of the graduated income tax (at least one of the purposes).

[hay rick]

40. Exacjtly.

[Lyric]

20. Yes. Absolutely. And not just for individuals, but also for corporations

and businesses.

As for what would happen to the excess, I suggest that it go to the Federal Treasury yearly, so it can spent in the following ways:

20% to the Social Security Trust Fund, to repay what the government has stolen.
20% to the Department of Education, to be re-distributed to the states and used solely for public school needs.
20% to be divided up equally between the other Executive Cabinets coffers.
10% to the Department of Health and Human Services to be used for public assistance grants.
10% to fund state-and-local level emergency services block grants, to be used to hire/train emergency workers and buy supplies.
10% toward buying back our Treasury bonds from foreign nations like China.
10% toward paying down the national debt.

Alternatively, businesses and individuals could choose to donate their excess wealth to non-profit charities, with the condition that no more than 50% of the donations from each individual citizen, business, or corporation can be given to religious charities that discriminate in who they hire and/or help. Non-discriminatory religious charities would be fine.

[FarCenter]

22. Earned? No. --- Inheirited? Yes.

[scrinmaster]

23. No

Stupid idea.

[HEyHEY]

24. Fuck no... I was born into a natural thing called "The earth" not into a cog

[Greyhound]

25. Closer than I though it would be, but the "someday it will be me" crowd still wins. n/t

[backscatter712]

26. Hard cap on wealth, no. Higher taxes on the wealthy? Yes.

If you're not familiar with what the L-Curve is, check this out, and don't forget to click the Zoom In and Zoom Out buttons.

http://www.lcurve.org/

Even if you remove ideology from the equation, and attack the issue of how to fund our government from a purely pragmatic perspective, one thing becomes clear, especially after gaining understanding of the L-Curve.

If you want to effectively fund everything you want government to do, from national defense to universal health care to pensions for the elderly to help for the disabled to roads & bridges & other infrastructure to schools, etc. etc. etc. all you have to do to have enough money to pay for everything, and fix the national debt, and so on is SOAK THE RICH.

The only reason why we have a national debt, and why Medicare and Medicaid and Social Security and schools and so on are underfunded is because the rich assholes have good lobbyists.

To answer the OP's question, no I don't think there should be a hard cap on wealth. I do think that there should be more reward available for people if they can earn it. But yes, I do think that very high levels of wealth should be taxed quite heavily. We used to have a 93% tax bracket imposed on the ultra-wealthy. I have no problem with bringing that back.

[krispos42]

27. I'd rather have a single-bracket income tax

Say, 65% on everything over $75,000 a year single/$150,000 married.

That's taxable income. After you deduct for your kids and mortgate and such.


Plus add in a 4-5% tax on gross income for Social Security and maybe 1 or 2% for Medicare/Medicaid on everybody who earns income.


The vast majority of people wouldn't pay any income taxes at all, just 5-7% for Social Security and Medicare/Medicaid, and the upper-middle class would be about the same.

This would cut my federal tax burden in half overall. Although I might get money back this year, so maybe not so much.

If we get universal single-payer health coverage, then the Medicare/Medicaid part would naturally grow larger but the giant sum going to private insurers would disappear.

[Selatius]

29. A 90% tax rate was what the US had under FDR all the way to Kennedy when it was cut to 70%

If you are looking for ways to redistribute wealth back to the poorer classes in this country, you might want to revisit FDR's policies.

[Zynx]

34. There were a lot of deductions, exemptions, and credits.

The real rate was 90% only for people who weren't creative.

[Selatius]

38. Well, true, but even if they took full advantage of the loopholes, they probably still paid more.

Certainly more than now. With enough planning, the top 1% of earners have been able to kick down their annual tax burden to as little as 10% in some cases under the current scheme and probably lower.

[Zynx]

43. What I do know is that taxation as a percent of GDP wasn't a whole lot different.

Part of that is that there simply wasn't the same share of income on that end of the spectrum.

[Cleita]

30. Better than that, once they reach maximum wealth, they should

be required to give the excess to relatives. The only reason I say this is because, the wealthy might be more agreeable to the idea if it looks like they can keep it in the family, yet the wealth will still spread out enough to make a positive impact on the economy and as it spreads from relative to relative, it will eventually spread to other families by intermarriage.

[Statistical]

31. How exactly would you calculate wealth?

I mean lets say the cap is $10 million. How would you calculate it? Yeah some stuff is easy: Cash, Bonds, Stocks, etc. What about royalties. If I am an artist and get paid $0.10 per song what is the lifetime wealth value of that royalty? If you don't consider that wealth instantly the rich will get "around it" by investing into stuff that isn't considered wealth. That is just one example. What about art, rare items, historical buildings, intellectual property.

Have you ever considered how massive complex and corruption prone the agency (IRS? WMS -Wealth Management Service?) would be. The WMS would need to look at every asset both tangile and intangible every year for every person in the United States to determine if they are over the cap.

Also any concerns about what you would do to things like capital or credit. Take one example: Muni bonds. Your city needs new roads and they issue a bond usually at a low interest rate 3%-5%. Now it is low because the risk is low and interest is taxable. Generally the rich finance muni bonds.

Someone at the "wealth cap". Why would they take ANY risk? Anything they earn is taken away however if the bond fails nobody reimburses them. You have taken away 100% of the reward and left 100% of the risk. So the rich wouldn't finance muni bonds. They wouldn't finance anything. Expect interest rates from house loans to muni bonds to skyrocket. Essentially it would be the poor and middle class trying to finance the poor and middle class. Except if the poor and middle class had money to finance the poor and middle class they wouldn't need financing would they?

This has to be the worst idea behind the "top 1% forfeit all assets" idea.

Why not use what works. PROGRESSIVE TAX SYSTEMS

Make income tax system even MORE progressive. Add a couple brackets.

Go from (today)
10%
15%
25%
27%
33%

to something like
10%
15%
25%
35%
45% for over $1 M in taxable income
60% for over $10 M in taxable income
75% for over $100 M in taxable income
82% for over $1 B in taxable income
90% for over $10 B in taxable income

Also make medicaid & SS (9% total) taxable on all income.


Make the death tax more regressive:
$2M tax free
40% on assets over $2M
60% on assets over $5M
etc.

Use the existing systems that have worked for a century.

All these pie in the sky schemes to deprive people of their life's work or destroy the US financial system....
some of you should have worked for AIG. You would fit in well.

[pitohui]

37. if you don't know how to calculate wealth i will stipulate that you are an idiot because it's easy

every quarter i get a royalty statement with a check, i deposit the check and make a note of my earnings for my estimated quarterly tax payments, yes, it's that fucking easy to deal with royalty payments

as for property, every entity in the world that collects a property tax already knows how to find out who is the property owner of record and an approximate value of the property -- if they can't find the owner and get the tax, well, guess what, they simply seize the property and that's it, game over, have fun buying back your own farm at the sheriff's auction

sheesh

if you really don't understand how this stuff works, be honest with yourself, you don't have significant wealth, you've never had it, and you have no clue what it's about and hold onto your hat now, you're never GOING to have it so how exactly is it benefiting you to eat out the ass of some rich person who wouldn't piss on you if you were on fire?

there is a paper trail in this world of who owns what, it just isn't that difficult

and for all the rich men who decide to "hide" their wealth by putting in a wife or girlfriend's names, tee hee, well, there is a rich justice there when the wife or girlfriend decides she may as well keep the property and not the old fuckwit since now it's titled in her name and it's HERS

these difficulties you imagine are just not that difficult in the real world

one day when you actually own property, you'll find out it's no secret, everybody knows you have it or can find out, from the fuckwit sueing you over getting bit by your dog to your ex-wife to the chick claiming she's having your baby to the snoopy neighbor who gets in everybody's business...EVERYBODY KNOWS...it just ain't so hard

[Statistical]

41. Thanks for the insults but honestly it isn't that simple

Your analysis of wealth is about on the 3rd grade level.

You have a royalty check and receive a qtrly INCOME the INCOME is just that INCOME not wealth.

The royalty right itself is worth something? If you needed the money how much you sell the RIGHT to me for? $100,000 $1 million, $250 million? Well it would depend on a lot of things....
a) how long the payments last
b) how much are the payments
c) how much are the payments likely to change
d) are they declining or growing
e) what are the risks? can somebody take the royalty away? sue? receive damages?
f) current treasury interest rates (yes ask an actuary they can explain why)
g) expected inflation unless asset is inflation protected.

ALL that would factor in the VALUE = WEALTH of the royalty not the peasly monthly or qtrly payment.
WEALTH = the instant value of the asset if converted into cash TODAY. Not the monthly check. You sure you should be calling people stupid?

You do know there is an entire industry where value of intangibles are calculated and certified. Companies will use those services when buying another companies IP, patents, or royalties. They need to know what is the $$$$ amount it is worth today.

For some royalties the value of the royalty could be 1000x what the payment is.

By your "simple" analysis If I had $1M cash i would have $1M wealth.....
but what if I used that $1M to buy the right to some Intelectual Property (say the patent for a compression algorithm). My bank now has $0.00
What is my wealth?

Well it all depends on what the value of that IP is. The analysis to determine exactly what that algorithm is worth on fair market generally is done by accounting firms, and subject matter experts. It litterally can take hundreds of billable hours to determine the exactly VALUE (not INCOME) of the property.

Not all property is liquid. Your system is so easily broken the rich would never pay anything in WEALTH TAX and easily amass an unlimited amount of wealth as long as the annual payments are less than the cap.

What is the value of an oilfield? If you think it is # of barrels * price then you honestly have no clue what you are talking about. Once again there is an entire industry of firms that gets paid hundreds of millions of dollars to answer that question.

Final example: By your analysis GOOGLE is worth next to nothing.... some buildings, some servers, and their ad check for this month. That likely would put the stock price somewhere around $8.00 a share. GOOGLE trades for much much more because of the INTANGIBLE value of their Intelectual Property. GOOGLE is valuable because of thier algorithms, patents, and IP which will enable them to command the market over the next couple decades not the stupid CHECK.

INCOME is not WEALTH.
WEALTH is not just the $$$ in the bank.

Generally the intangibles are only calculated when they need to be traded.
You likely haven't looked at the lifetime value of your royalty but if you needed to sell it for CASH now or were looking to buy someone elses royalty you would.

The idea you can CAP AND TAX wealth. All forms of wealth, even intangible wealth would require that everything from IP, to trademarks, to copyrights, to royalties all have a face value, not the friggin INCOME.

There is a reason we tax income. Your right it is EASY. Exactly like in your example. Your receive INCOME and you right it done. The OP suggested not taxing INCOME but CAPPING (others suggested taxing) WEALTH.

[pitohui]

44. you use a lot of words to prove you don't know what you're talking about

i understand that because YOU have no clue how to calculate wealth you think that no one can, but the fact of the matter is that it is done everyday by divorce lawyers, accountants, the IRS, family court judges, people wanting to buy/sell annuities or structured settlements, and -- yes! -- people who want to buy/sell royalties

michael jackson was able to buy the beatles' catalog because there are sensible people who can project an income stream based on sales of a property and figure out what the property is worth

i will agree that YOU don't understand how to do this, but nor do you understand how to fill a rotten tooth or perform bypass surgery on a bad heart -- do you also assume that there are no dentists or no surgeons who can do these things

there are many and many an expert who can figure out what "wealh" is, hell, there are actually almost too many business schools so if you really want to learn how to appraise value you should get an education

but if you want to throw stones and pretend that everything you can't do, can't be done at all, well, why should i respect your opinion? i don't say that to insult you, i say that because it's a fact -- i don't respect an opinion based on "i don't know how, so i think no one else knows how, because i'm the smartest guy in the world, so there!"

[Statistical]

47. Of course it can be done

However what I said in the original post that you responded to with a completely wrong example of INCOME is that it would be difficult.

All those examples you just gave of calculating wealth are a one time transaction. I never claimed it can't be done. I said IT CAN BE DONE. It is done every day. Oil field, IP, royalties, take overs, mergers, etc. Just because it can be done doesn't mean it can be done for everyone, every year ECONOMICALLY.

Just like wealth is calculated on an estate ONCE at death. There is a reason for it. It is both time confusing and complex.

Now the OP idea was a cap on wealth. The only way that could happen is a constant (or at very least annual) monitoring to redistribute wealth that goes over the cap.

This would need to be done for every asset owned by every person every single year forever. Try to imagine how complex, cumbersome, intrusive, and non stop such a government agency would need to be.

If there was no other choice then maybe we would need to use such a system

Compare that to a simpler system:
Income tax. Already in place. simply make it MORE progressive. Hell make the top bracket 99.9% if you want.
Estate tax. Already in place. Simply make it MORE progressive. Same thing here make the top bracket 99.9% if you want.

Too easy.

Govt tend not to pick the most complex, impossible to use system, then spend even more money to enforce it for ultimately no greater gain for their citizens.

I stand by the idea that a system in which intangible assets need to be constantly recalculated (something like the value of Beatles royalties will change every year based on the brand value, expect # of plays per year, advertising tie ins ,etc) every single year is stupid.

The cost to the taxpayer to ensure such a system is equitable would be massive.
Ultimately a lot of those decisions will be individual judgment calls.
So you now have created a system where poorly paid public servents will need to make judgement calls (easily hidden judgement calls) on very rich peoples assets.

Every think about how much fraud there would be? "Hey that asset isn't worth $10 M it is more like $3 M and here is this $10K under the table".

There is a reason why we tax INCOME. Very simple reason. It is periodic, transparent, and for the most part doesn't require judgement calls. Do people cheat on taxes? HEll Yeah. Would more people cheat on this super bloated solution looking for a problem Wealth Cap Nonsense? HELL YEAH.

Good news is all this is academic. No politician would support an idea this stupid! Nobody!

[Selatius]

39. Revenue from municipal bonds is tax free. If you want to pay taxes on it, then you can.

Simply declare the revenue as payroll income or taxable capital gains instead of capital gains under municipal bonds.

[Fire1]

32. Don't cap the wealth. Close the loop-holes, raise the taxes and

minimize the exemptions.

[Zynx]

33. So long as they pay their fair share of taxes in accumulating it, I don't have a problem.

There is a need for some measure of concentrated pools of capital.

[pitohui]

35. of course there should be a maximum limit to wealth

there will never be social justice or democracy when the evil and the venal can literally accummulate infinitely more than a working person -- never -- it just doesn't work that way

as long as we live in a world of finite resources, then to allow anyone unlimited access to resources is to condemn many, many others to misery, suffering, and death

it really IS a zero sum game, you know, unless you live in a dream world where the planet is infinitely rich

a decent working person's capacity to earn is very severely limited, the median american income is something like $40K a year and most decent people, no matter how hard they work, in a real job, such as teacher or nurse, would never earn more than 100K...so to hear that some paper pusher or some relative of some 19th century robber baron should be allowed to have millions or even billions...there's just no excuse for that

mexico supposedly has more billionaires per capita than any other nation, followed by russia, do you think the average citizen of those countries is happy and satisfied and benefits from having so many billionaire crime lords to trickle down the wealth?

do you think a librarian is less deserving of wealth than a drug lord? do you think "merit" has anything to do at all with the accummulation of vast sums of wealth? if you do then i can't respect your intelligence because no millionaire really thinks so

hard working people don't get rich, there is no serious correlation between the value of your effort and how much money you get for it

if you want justice and fairness, then i don't see how you can argue that there should be no limit on earnings at the top

[eridani]

36. No, but there should be wealth taxes

If we had them, we wouldn't even need estate taxes. Property taxes are a form of wealth tax--why not extend them to other kinds of wealth? There should be some minimum, of course. 1 million? At any rate, savings account interest, dividends, capital gains, overall wealth holdings--include it all. The cutoff will exempt 95% of the population.

[zonmoy]

42. How about simply setting up the tax system so that for each billion in assets

the tax rate on income goes up one percent with no possible deductions or loopholes.

[hay rick]

45. Soaking the rich.

The OP's question is slightly incoherent. The counterpart of the minimum wage would probably be a maximum wage rather than a cap on the value of one's accumulated wealth (assets). I think a steeply progressive income tax a la the 50's and 60's would be a more feasible solution to the burgeoning problems of poverty and widening income disparity. A confiscatory "death tax" would serve to mitigate the waste and abuse of extraordinary accumulations of inherited wealth.

I have always believed that income beyond a certain point is better described as "winnings" or "lootings" rather than "earnings". Society should reclaim the excess and put it to better use, even when it has been accumulated by nominally legal means. We should soak the rich after they have soaked us.

[sarcasmo]

46. Ronnie Rayguns brain would explode reading this question.

[mmonk]

48. No, there should be a maximum floor (of which we won't let people

fall below).