> I was listening to public radio (maybe fresh air) on the
> way home today, and the topic turned to Buffett and taxing
> the wealthy.
I'm in support of his outspokenness on this issue.
> The guest turned the discussion to France, where some wealthy
> are discussing new taxes for high earners (500k ?) and then
> explained that France's tax system is based on 'wealth'
> - money, real property, everything.
I didn't hear this show, but it's a common trope in talking about taxes to bring up something your apponent has never heard about and present it briefly in support of whatever your position is :-)
The French tax system is very different than that of the US, and well it should be: France is a very different country than the US. I'll leave you to some 'light' reading in Wikipedia, but a few things are important in looking at this issue:
- The vast majority of tax collected in France is "based on" income, not wealth
- The 'wealth tax' in France is very new: it dates from only 1989
- It's easily avoided if you already pay high taxes (there's a cap on tax due involved with a percentage of your income; presently the cap is 50% ... if you're already paying 50%, you don't pay any additional wealth tax)
- It represents a very small amount of money: less than 5B€/yr is collected out of more than 800B€ total tax collected
- The revenue from that tax is specifically targeted for a social program in support of chronically unemployed
The US has historically had a tax rate (as a percentage of GDP) that is
much lower than other advanced nations; France has historically had one
of the highest. Saying that the French do one thing or another in terms
of taxation isn't really support for/against something similar in the US
:-)
> It brought to mind a comment I made on this list a while back,
> in favor of taxing 'wealth', and that Jordan was dismissive.
My general position is that the tax system of the US is so complex that it encourages inequity: if you can figure out a way to (legally) avoid taxes, it is always at the expense of other tax payers. What I'm in favor of is a simplification of the tax code, principally by way of un-do of provisions that have been bolted on over the years which only serve to bifurcate tax paying groups. The classic bifurcation is between those who are above you and those who are below you, ranked by income. We've seen that most people underestimate just how much money is made above them, but appear to have no trouble believing that those below them are getting away with something.
My latest formuation of this is to ask a given tax payer what they think of someone who both:
- Makes *the same amount of money* as them - Pays far less in taxes than them
For any given income level in the US, there is wide rate of total taxation for all those with the same income. How fair is that?
---
Coming up with a (new, complex) system to tax wealth would be counter to my position.
/jordan