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Title: Donald Trump once proposed a more left-wing tax policy than Bernie Sanders
Source:
Vox
URL Source: http://www.vox.com/2015/3/18/8244115/donald-trump-wealth-tax
Published: Jul 7, 2015
Author: Dylan Matthews
Post Date: 2015-07-07 09:48:19 by cranko
Keywords: None
Views: 13231
Comments: 39
In 1999 and 2000, he considered a bid for the nomination of Ross Perot's Reform Party, which was at the height of its influence after Jesse Ventura won the Minnesota governorship in 1998 as a Reform candidate. Trump's big idea was a one-time wealth tax of 14.25 percent on all individuals and trusts with a net worth in excess of $10 million. The proceeds would be used to wipe out the national debt, with the savings in interest payments going to shore up Social Security and pay for middle-class tax cuts. This is a totally insane idea for a whole variety of reasons, many of which Bruce Bartlett ran through in the Wall Street Journal at the time. The tax wouldn't raise nearly as much as Trump thought it would, it'd encourage massive evasion, and it'd force huge sell-offs of stock and other assets, leading to, as Bartlett writes, the "liquidation of thousands of businesses." "We must have universal healthcare," wrote Trump. "I'm a conservative on most issues but a liberal on this one. We should not hear so many stories of families ruined by healthcare expenses." The goal of health care reform, wrote Trump, should be a system that looks a lot like Canada. "Doctors might be paid less than they are now, as is the case in Canada, but they would be able to treat more patients because of the reduction in their paperwork," he writes. /cdn0
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The wealth tax isn't the only left-wing proposal Trump has flirted with over the years, either. He also used to be a fan of Canadian-style single-payer health care.
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#13. To: cranko (#0)
Trump's idea of a Wealth Tax was right, as was his idea of paying off the national debt and using the interest savings to improve services, but his implementation of it: 14.25% of the top wealth, was a bad idea. Too draconian. What we really need is about a 2% gross wealth tax, without deductions, that hits ALL wealth, bottom to top, at the same rate. And the gross wealth tax should REPLACE income, Social Security, property, sales and all other taxes. In other words, expand the base to cover EVERYTHING, tax EVERYTHING, at a very low rate, and do away with the complex jungle of piecemeal taxation. It's the fairest tax of all. Therefore, of course the Republicans and Democrats will hate it - because it doesn't give breaks to their prized constituents at the top, and because it taxes the FIRST dollar of their poorest constituents at the bottom. All in, from everybody, at the rate of 2 cents. Trump didn't propose that, but had he, then his logic was good. Trump is also right about health insurance. It should be universal and single payer, like in France.
First, determining someone's "wealth" is not an easy thing to do. Are you proposing an army of government furniture, clothing, jewelry, and gadget assessors to inspect people's homes during tax season? Second, most people's wealth is tied up in illiquid assets like homes and business properties. What happens to small business people who have modest incomes but property values that have escalated dramatically over the years? Do you force them to sell their business because they can't pay the tax? I think a better approach is a transaction tax on all B2B and C2B transactions, including the purchase of stocks and bonds. Only bank savings and checking transactions would be exempt. Someone did a study a few years ago which showed that a 1.5% tax on all transactions would be enough to replace all federal taxes.
Yes it is. Financial assets: bank accounts, stocks, bonds, wages, dividend and interest payments are all registered. Real property assets (houses, buildings) and large personal property assets (planes, boats, cars) are also all registered and taxed. What remains? Two sorts of movable personal property: (1) Things of minimal individual value (most clothing, used mass-printed books, CDs, computers, etc.), and (2) Things of major financial value (artwork, coin and stamp collections, jewelry). Both of these things are mostly privately registered in the form of property insurance. Housing insurance generally covers personalty, with a deductible, up to a certain amount. For really valuable things: art, jewelry, coin and bullion collections, to have insurance coverage people must schedule them or buy separate insurance. So, to capture most of the wealth in America, you need only look at registered assets, and then add to that the amount of personal property insurance that people carry, and tax them on that. People don't spend money insuring personal property they don't have. It isn't too terribly hard to determine the average amount of personal unregistered property that most Americans have - I'll go look it up on the net when I'm done with this - and then simply apply the tax rate to that assumed floor. If most Americans have about $20,000 in personal property, then everybody pays a flat head tax of $400 per year (2% of $20,000) based on that, and that covers the lower end. (Remember that sales taxes and dog license taxes and car taxes and gas taxes and Social Security taxes should all go away, so for those at the bottom, a flat tax is a tax cut.) This is a really simple way to administer the bottom end without having to count underwear or Ikea chairs. Essentially the only tax evasion you would have would lie in people who have major assets in art and gold bullion, who did not insure them. Those people bear a substantial risk, for if their goods are stolen and they are uninsured, they lose. A police claim of the theft of uninsured major assets that were not declared on the tax returns would be an admission of tax evasion. By those expedients: registered assets (which is almost everything), plus insured property (which covers almost all real property of value), with perhaps an assumed $20,000 of personalty resulting in a fixed floor tax of $400 per person per year, the issue is handled with little potential for evasion. The potential for evasion is further squeezed as we move to a no-cash economy, as then even if one has hidden art and gold, when one liquidates it, the assets pop into the system as cash, and then the cash is converted into something. And remember what would be replaced: sales taxes and receipts, sales tax accounting, DMV fees, all of that petty, annoying bakshish that happens down at the margins. Toll booths on roads that devour so much time. Right now, we tax wealth multiple times. We earn new wealth as wages and pay three, four or five taxes on it (Social Security, Medicare, Federal and State and City income taxes). Then we pay taxes on that money AGAIN when we convert it into goods, through sales taxes. And then, with certain wealth (houses, cars, boats), we pay a wealth tax every year. If we want to avoid taxing personalty, then just treat stocks, bonds and annuities like houses: tax securities holdings at the same rate that houses are taxed (about 1.5%), and tax securities transactions at the same sales tax rates that apply to cars or clothes. The reason to tax wealth and not wages and sales and property separately is that the latter (the current) system warps the economy as people take suboptimal economic positions to avoid taxes, because of multiple taxation of the same wealth - when earned and when spent, and each subsequent transaction - and because of the plethora of administrative tax collection agencies. With a flat wealth tax things become much easier to track, the tax is less intrusive, and it if very difficult to evade and impossible to avoid - so the tax code ceases to warp the economy. The one thing it DOES do is force more active attention to investments. One cannot simply part assets earning less than 2% per year, because if one does that, one loses money. Consider what small businesses pay in taxes now: licencing fees, LLC taxes, payroll taxes, unemployment insurance and personal income taxes on the profits. Now consider how much lower and less intrusive the taxes would be on that small business. They'd pay 2% of the value of their assets, and 2% of the value of their revenues. The business taxes and 28% personal income tax would all go away. Truth: this tax would hit everybody the SAME - a flat 2%. The very top of the income scale, whose wealth is mostly in the form of accumulated assets, would pay more than they currently pay, but as a percentage of what they have, it would be the same as the homeless guy: 2%. And THAT is why the super-rich would hate this tax. All of the special tax tricks that shield them from taxes would be gone, and they'd be paying taxes at the same rates as all others. They'd still have more, but stuff they have that is currently not taxed (accumulated securities) would be. It's completely fair. And it's easier to administer and more difficult to substantially evade than our current system. Democrats would hate this because it's not "progressive" (even though it actually DOES tax the wealthy more money than the current high marginal rates and punitive estate taxes that are easily avoidable). Republicans would hate it because it does hit the Alphas in ways that are not evadable or avoidable.
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#30. To: Vicomte13 (#13)
What we really need is about a 2% gross wealth tax, without deductions, that hits ALL wealth, bottom to top, at the same rate. And the gross wealth tax should REPLACE income, Social Security, property, sales and all other taxes. In other words, expand the base to cover EVERYTHING, tax EVERYTHING, at a very low rate, and do away with the complex jungle of piecemeal taxation.
#35. To: cranko (#30)
(Edited)
First, determining someone's "wealth" is not an easy thing to do.
Replies to Comment # 35.
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