No need for any ability to avoid it. You could replace nearly all federal taxation with a 50 basis point net asset value annual tax.
I for one would rather pay 0.5% of my book value than the vastly larger amount in income taxes I pay. And it's a small enough value I think even extremely thin margin businesses could probably afford it.
Everyone on HN says "People would just flee" but in the end almost all the value in the US is real assets i.e. you can't move a physical building overseas.
Except that -- as a practical matter
-- identifying all assets and assigning a dollar-amount to each one requires enormous overhead and intervention.
This is even more true when you consider the incentives people have for hiding assets and cheating the system, and their ability to do it over many years or even cooperatively.
That's one major benefit of the income tax option, that measurement is actually easier, even when you consider all of those non-wage incomes.
This is absolutely true, I was thinking you could certainly structure it differently than the annual tax system we have now, and certainly in similar property taxes there's an assessment problem.
I don't have any answers for those things, but it's an interesting thought experiment - what would such a thing look like for relatively easily valued assets vs very difficult to value assets, etc
Perhaps you could simply structure it as a transactional cost, but of course, that causes overhead on every transaction. Backdating would be ruinous and cause people a strong incentive to transact often which is probably perverse.
To be honest I just back of the enveloped it, taking into account the stated revenue for the entire federal government and the putative value of all real, physical or financial assets in the continental US. It would be somewhere in that order of magnitude for sure.
I think the larger question is the implication that (assuming we moved to a purely wealth tax), there's a minimum rate of return on wealth - this is already functionally true, but it sets an interesting floor to the return on investment for an asset.
I'm by no means a financial wizard, I'm sure there are huge flaws in the idea I can't see after an hour's thought, I was just playing with the idea, but it seems like it solves a lot of the problems inherent in income taxation - different entities (people, corporations, foreign investors, etc) being taxed at different rates, the relative spending ratios of various income brackets, etc.
It follows essentially a similar line of thought as the land value taxes, except of course applying to all assets.
I for one would rather pay 0.5% of my book value than the vastly larger amount in income taxes I pay. And it's a small enough value I think even extremely thin margin businesses could probably afford it.
Everyone on HN says "People would just flee" but in the end almost all the value in the US is real assets i.e. you can't move a physical building overseas.