A Practical Reason to Oppose Wealth Taxation

May 7, 2021 by Dan Mitchell @ International Liberty 

As an economist, I strongly oppose the wealth tax (as well as other forms of double taxation) because it’s foolish to impose additional layers of tax that penalize saving and investment.

 

 Especially since there’s such a strong relationship between investment and worker compensation.

The politicians may tell us they’re going to “soak the rich,” but the rest of us wind up getting wet.

That being said, there are also administrative reasons why wealth taxation is a fool’s game. One of them, which I mentioned as part of a recent tax debate, is the immense headache of trying to measure wealth every single year.

Yes, that’s not difficult if someone has assets such as stock in General Motors or Amazon. Bureaucrats from the IRS can simply go to a financial website and check the value for any given day.

But the value of many assets is very subjective (patents, royalties, art, heirlooms, etc), and that will create a never-ending source of conflict between taxpayers and the IRS if that awful levy is ever imposed.

Let’s look at a recent dispute involving another form of destructive double taxation. The New York Times has an interesting story about a costly dispute involving the death tax to be imposed on Michael Jackson’s family.

Michael Jackson died in 2009… But there was another matter that has taken more than seven years to litigate: Jackson’s tax bill with the Internal Revenue Service, in which the government and the estate held vastly different views about what Jackson’s name and likeness were worth when he died. The I.R.S. thought they were worth $161 million. …Judge Mark V. Holmes of United States Tax Court ruled that Jackson’s name and likeness were worth $4.2 million, rejecting many of the I.R.S.’s arguments. The decision will significantly lower the estate’s tax burden… In a statement, John Branca and John McClain, co-executors of the Jackson estate, called the decision “a huge, unambiguous victory for Michael Jackson’s children.”

I’m glad the kids won this battle.

Michael Jackson paid tax when he first earned his money. Those earnings shouldn’t be taxed again simply because he died.

But the point I want to focus on today is that a wealth tax would require these kinds of fights every single year.

Given all the lawyers and accountants this will require, that goes well beyond adding insult to injury. Lots of time and money will need to be spent in order to (hopefully) protect households from a confiscatory tax that should never exist.

P.S. The potential administrative nightmare of wealth taxation, along with Biden’s proposal to tax unrealized capital gains at death, help to explain why the White House is proposing to turbo-charge the IRS’s budget with an additional $80 billion.

We have lost our minds!

By Rich Kozlovich

Editor's Note:  This is a follow up on yesterday's commentary,  Cycles of Insanity. RK

Leftism is a plague on humanity.  Whether it's an issue such as abortion or economics, dystopia is the ultimate consequence of leftism.  

The historical accuracy of that statement is there for the world, and it's politicians to see and act on, but the activists in government, the media and academia are constantly working to overcome reality, and the public buys into it.  Doesn't anyone read history books any longer? Answer? No! 

Not only that, we're not taught history any longer, because actual history has been replaced by leftist propaganda such as Howard Zinn's, A People's History of the United States, filled with lies of commission and lies of omission.  And done deliberately, which is known, and yet they're still pushing it on our children, at all levels of education. 

• You may wish to view my

Education in America was heavily influenced by an outspoken socialist, John Dewey, going back to the 1890's.   His goal, along with so-called progressives like Teddy Roosevelt and Woodrow Wilson, was to make sure the apple fell as far away from the tree as possible.  The state was to become the ultimate moral arbiter for what communists called the "new man".  Not the churches!  Not the parents!  The State! 

Reading, writing and arithmetic were merely side benefits to that ultimate goal.  Now that they've pretty much reached their goals of moral supremacy, they've largely failed at reading, writing and arithmetic. Since that was never their true goal in the first place, they've kicked actual education to the curb. 

And so,  here we are, left with an education system that's not only failing to educate our children, it's filling them with insane social paradigms that will doom the nation, just like Venezuela, Greece, and many other socialist failures.  

 The academic leftists fled fascism in Europe, and then worked to impose what they fled here. Through the Marxist take over scheme referred to as a "long march through the institutions", to infest all of America's institutions in order to make socialism acceptable to Americans, with the end goal of imposing it.

• The Communist Takeover Of America - 45 Declared Goals 

We have infanticide promoted by a corrupt judiciary that "discovered" a "right" in the Constitution that doesn't exist in the Constitution.  They've created something called the Penumbra of the Constitution, where "rights" not specifically cited are "implied" by the Constitution.  The Supreme Court created a new "right", calling the right murder your unborn child the Right to Privacy.

 "In January 1973, the Supreme Court issued a 7–2 decision ruling that the Due Process Clause of the Fourteenth Amendment to the U.S. Constitution provides a "right to privacy" that protects a pregnant woman's right to choose whether or not to have an abortion." 

 

All promoted by corrupt, self-serving, amoral political and activist misfits with the goal of destroying the foundational values of the nation.   We have illegal deep state abuse by America's bureaucracy against America's citizens,  and the latest outrage where the FBI raiding former Mayor Guillani about the Ukraine investigation, but the people who've been exposed for their corruption in this affair, fake President Joe Biden and his corrupt son Hunter are given a pass. 

•  Giuliani claims materials seized by FBI are 'exculpatory' evidence

We have deep state and political corruption to the point of treason and no one is being charged with it.  A political party that gone so far to the left they've committed themselves to the destruction of the American identity, the American culture and the destruction of the Constitution.  A party that's irrational, misanthropic and morally defective, and the , , industry and the unions praising them while condemning those who actually believe in the American way of life, calling them racists, xenophobes, greedy, and well, take you pick, when you're looking for a denigrating term, any one will do.

Everything is now racist, including milk and federal, state and local governments that are owned by the .

As I watch the insanity appearing in the news daily even a newsie like me gets sickened by it. I keep wondering, just how insane can the world get?  Apparently there are no limits to insanity, cognitive dissonance, corruption and greed.  The left uses our own values against us to destroy us, and entirely too many aren't disgusted by it all.   

Islam has delivered more human disaster than any other force in the world's history.  But the left in all its glory runs a close second.  It has always been a force for human misery, suffering and dystopia since its inception. The combination of the two represents human disaster on a scale that has to cause fear and dread in those who actually read and understand world history.  A history that's incontestable.

We're hearing a lot from and her "", which is neither new, nor is it a deal.  Ocasio-Cortez is a nitwit, but at least she's an honest nitwit, unlike most in the Democrat Party, she actually lets us see just what a nitwit she is, thus, we can see just how insane her schemes and policies are.  She's actually telling everyone what she believes, and I give her kudos for that, but history has shown what she believes in is a human nightmare.  And that history is also incontestable. 

I keep being amazed at some of the positions these "leaders" and "opinion makers" take.  But when you dance with the Devil you won't choose the dance, you won't pick the music and you may not be able to leave the dance floor.  Their views border on insanity.  Unfortunately, everyone has to suffer for their insanity

Paradigms and Demographics was never a big blog.  The biggest month I had 40,000 hits.  Typically, P&D gets between 20 and 30 thousand hits a month these days.  In the beginning I was only interested in shaping ideas and concepts I thought important for the pest control industry and those who are involved with us. 

Going back many years I published a weekly newsletter and I had a blog before this one; and they both had the same caveat; green only!   As time went by I realized that it was impossible to do “green only” because I could see that green was nothing more than the spear point for imposing socialist policy worldwide predicated of fraudulent environmental disasters.  Therefore, I decided that Paradigms and Demographics would stop being an anti-green blog and become a pro-humanity blog, which by definition makes Paradigms and Demographics anti-green and anti-left. 

I’ve try to work in different formats over the years, but I never really liked the way anything was coming together.  I kind of like what I am doing now and I think I have settled on this format.  For one thing, I think it's more focused, and better organized.

I don't know how my friend Alan Caruba, who passed in 2015, put out such accurate in depth commentaries each day, and on such varied subjects.   While I was working I didn’t have time to do a commentary each day, and quite frankly, I can’t seem to do one each day now that I’m retired....much to my embarrassment. 

I don’t know about others, but there are times I can crank out a complicated article in a couple of hours.  There are other times when it takes me two days, and then I keep changing it.  I never quite figured out why that is, other than the fact that the subject has so many layers that I have the tendency to go off in different directions attempting to tie it all together. 

At one point I stopped doing anything for a couple of weeks.  Even a news junkie like me can get to the point that I just can’t stand anymore.  Alan Caruba was concerned and sent me an article to publish just to get me back in the arena.

Admittedly some of my articles are a bit long, but that doesn't bother me as much as making sure I have continuity in the article.  At times I have had to work in what are called "coherence through connectives" because of the depth of the subject…and usually the continuity isn’t obvious until the end of the article.   If not done correctly - you look like a loon.   

I find that pushes me into different realms of thought and ideas.  And I get ideas.....lots of ideas!  I can get an idea a minute.  All of them time consuming, some are brilliant…..some….well....not so much!

But one thing has become clear as day to me.  Mass insanity really is cyclical, with peaks and valleys. From the 60's until now we've seen the cyclical waves of insane behavior and decision making, but even at the bottom of the waves, the insanity was above the sane base line of foundational values that created the greatest nation the world has ever seen.   Consequently, the resulting the downward spiral from that foundation is making the continued existence of America more critical than ever before.

We're facing economic disaster at every turn, and the left demands more spending, more taxation, more central government control over everyone's life, irrespective of the fact that kind of government has been a dismal failure forever and everywhere, and the media is complicit.

We really have lost our minds, and perhaps an  , which I've gone back of forth on as to whether it's a good thing or not, may have to be the answer. 

 

Buckeye Institute Press Release

In The Sun, Robert Alt, president and chief executive officer of The Buckeye Institute, and Andrew Cline, president of the Josiah Bartlett Center for Public Policy in Concord, NH, look at the issue at the center of New Hampshire v. Massachusetts—the unconstitutional income taxes that remote Granite State workers are required to continue paying to Massachusetts—a state where they do not live, cannot vote, and no longer work. For remote workers, taxation without representation The Sun By Andrew Cline and Robert Alt March 10, 2021   When Massachusetts Gov. Charlie Baker declared a state of emergency on March 10, 2020, many New Hampshire residents who were commuting to the Bay State began working from home instead. Ordinarily, Massachusetts could not continue withholding taxes from these workers’ paychecks while they were not working in the Bay State. But under a new Baker administration rule, out-of-state remote workers were required to continue paying income tax to Massachusetts — a state where they do not live, cannot vote, and no longer work. Remote-working Granite Staters were understandably outraged. As was New Hampshire Gov. Chris Sununu. Accordingly, New Hampshire Attorney General Gordon MacDonald filed an original jurisdiction case with the U.S. Supreme Court to protect Granite Staters from Massachusetts’ unconstitutional money-grab. Fourteen other states, along with several public interest groups including The Buckeye Institute, have urged the high court to hear this consequential case. New Hampshire v. Massachusetts should matter to anyone who works from home or employs remote workers. Teleworking has skyrocketed during the pandemic, with approximately half of Americans now working from home, according to a recent study by the Brookings Institution. Software giant Salesforce.com, the largest private employer in San Francisco, recently announced that most of its employees would continue to work remotely after the pandemic, and that the company would shrink its physical office space, as a leading indicator that American work and commuting patterns are changing for the long term. This shift to remote work started well before the pandemic and benefits employers and employees alike. It enables employers to attract top-notch talent from outside of their immediate geographic area. It gives employees the flexibility to locate their households in more affordable or otherwise preferable areas. And it saves everyone money. A Global Workplace Analytics study found that those who work remotely half the time can save nearly $11,000 per year for their employers and between $2,500 and $4,000 per year for themselves. The remote-work revolution can also help bridge the growing urban-rural economic divide. People who work from home are almost twice as likely to earn a six-figure salary compared to the general population, and small towns and rural areas stand to profit substantially if more high-income earners relocate there while telecommuting to work for employers in larger metropolitan areas. Some government officials have lauded the shift to telework, and even encouraged it. As Gov. Baker himself said, “Now as we look to the weeks and months ahead, we’re urging businesses to continue to promote remote-work and work from home as much as possible.” The governor, it seems, wants to have his cake and eat it too — advising Granite Staters to stay home at the same time he taxes them as though they didn’t. If being taxed without representation weren’t enough, Massachusetts — home to John Hancock and the Boston Tea Party — wants to levy taxes for unused services, too. Being taxed where you work makes sense only because the taxing jurisdiction generally incurs commuters’ wear-and-tear burden on its roads, utilities, community services, and infrastructure. But absent the commuter presence and burden to pay for the same, there is no good reason — short of greed — to tax telecommuters’ wages while they have no say or vote on the tax or the election of its assessors. If Massachusetts prevails in New Hampshire v. Massachusetts, other states and jurisdictions will quickly adopt a similar soak-the-teleworker tax policy. In Ohio, for example, cities are already taxing the income of remote workers who used to work there, but are now working elsewhere. Income taxes should be paid by people who live or, at the very least, actually perform work there. Working from home is here to stay. Employers and employees have both learned to adapt and adjust their budgets to meet the demands of that new normal. Governments should, too. Unconstitutional taxes levied upon the income of those who have no vote is neither just nor sustainable given our new post-pandemic realities—and Massachusetts (of all places) should know better. Andrew Cline is president of the Josiah Bartlett Center for Public Policy in Concord. Robert Alt is president and CEO of The Buckeye Institute in Columbus, Ohio. Founded in 1989, The Buckeye Institute is an independent research and educational institution – a think tank – whose mission is to advance free-market public policy in the states. The Buckeye Institute is a non-partisan, non-profit, and tax-exempt organization, as defined by section 501(c)(3) of the Internal Revenue code. As such, it relies on support from individuals, corporations, and foundations that share a commitment to individual liberty, free enterprise, personal responsibility, and limited government. The Buckeye Institute does not seek or accept government funding. 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