DU POLL: Do you think there should be a cap on how much wealth one individual can accumulate?

[ieoeja]

109. Taxing wealth would lead to even more concentration of wealth into fewer hands.

First, let me remind everybody that we already have some forms of a wealth tax. I pay roughly $13,000 a year in property taxes, for instance. Now, back to my subject line:


Lets take, for example, me.

I am a millionaire on paper. I own a rundown house in Chicago. I am buying a nice apartment that I rent out at a slight loss. And the biggie is that I recently inherited a 240 acre farm.

Wealth
-------
House worth $350k (even if it is falling down; literally at certain points)
Farm worth $850k
Equity in apartment ~$100k
Estimated Total Wealth = $1,300,000

Lets say you tax that at 10%. Then my annual tax liability would be $130,000.

Income
--------
Job $100K
Farm $8k
Apt $21,600 (mortgage is roughly $22,200, but that doesn't matter to the IRS)
Total Income ~$130k

Believe it or not, I did not do the math before I started writing this. I knew my income would not let me pay a 10% wealth tax, but I didn't realize my gross income currently exactly equals.

Obviously, I can not afford to keep my wealth at even a 10% tax. So I have to sell my property.

Who can buy my $850K farm then pay the $85k annual tax? Someone who can afford the tax ($85k-8k = $77k loss).

Fine. The farm that has been in my family since the 1840s is now gone. What about that house? Can I afford $35K a year in wealth tax? Yes. But that would be quite a hit. In fact, at even a low 10% rate, I wouldn't see the point of owning the house. I might as well find an apt.