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0 pointschasd003d ago0 comments

> only start at $50 million or more

curious how they came to that number. There's probably plenty of voters willing to cast a vote for $0.5M+ and plenty ready to cast a vote for $100M+. How was the line drawn?

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SoftTalker3d ago

The minimum net worth of the top 1% of households is roughly $13.7 million[1]. So at $50 million they can say "we're only taxing the top of the top 1%" as a way to sell it.

"The top 1%" is a popular target for these schemes because 99% of people might be convinced to support it, since it won't affect them (at least not directly).

[1] https://www.investopedia.com/financial-edge/1212/average-net...

whodidntante3d ago

A wealth tax will affect the distribution of investments. It might make higher risk investments like stocks more attractive as compared to bonds, it might make them less attractive. More likely it might make publicly available instruments less attractive in general, as private investments have more flexibility in how they are evaluated. In any case, there will be winners and losers as the investment landscape shifts, which affects everyone. If equity becomes more attractive, it could force less wealthy people into equity, which means they will take on more risk. If private investments become more attractive, less wealthy people will lose out. It might not affect those with no assets, but that is not certain either. So, everyone will be affected, in some way. Impossible to model due to unintended side effects.

frmersdog3d ago

Yeah, "It won't affect the 99%," is the wrong framing. The entire point is for it to affect the 99% (by undoing the effect disproportionately high wealth among the wealthiest and disproportionately low wealth among the middle and least wealthy).

I think your assumptions are off, though; less wealthy people might not be "forced" into investment at all, but given the "opportunity" to pay off debt or increase/diversify consumption. In the end, the important part is the wealth transfer downward, wherever it ends up. No trickle, but you can pump it.

ashdksnndck3d ago

In 2020, there was a campaign (prop 15) to legalize increases on the property tax rate in California that only applied to commercial and industrial properties. Intuitively, the constituency for prop 15 should be very similar to a wealth tax on $0.5M+, since the set of people owning commercial/industrial real estate in California are mostly a subset of people with $0.5M+ wealth. What actually happened is there was heavy opposition and prop 15 was narrowly rejected by the voters. Organizations opposing the proposition included the American Legion, the NAACP, and California Beer and Beverage Distributors.

Arguably, there’s a disconnect where the people who lead civic organizations don’t have a great deal in common with the median member. They might be wealthier and generally more plugged in to power structures. They might not support policies that are in the best interest of members they represent, especially people who have a hard time representing themselves.

Anyway, if your goal is to get a policy enacted, it’s not enough for your policy to be theoretically good for the median voter. You need a winning political coalition.

Glyptodon3d ago

There are probably good argument for it being lower (maybe circa $10 or $12 million. But I have a feeling they do want to try and not hit land-rich-but-otherwise-maybe-not "family farms" that have hundreds or thousands of acres.

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