A Limit On Assets Accumulation?

[Mike K]

I personally believe there should be a limit on how much assets any American citizen should be permitted to own. So about ten or more years ago I started advocating on various discussion forums that a limit of twenty million dollars in personal assets be imposed. I specified twenty million as an offhand suggestion which is subject to review and adjustment.

When I first proposed the idea it was vigorously, sometimes angrily, rejected by the majority of respondents who denounced it as un-American, communist, not feasible and/or destructive to the mechanism of free enterprise. The suggestion actually generated such hostility that the thread was deleted on one forum.

I've posted this suggestion again over the years in various places and each time I do there is noticeably less argument against it, which I regard as indicative of a change in public mood. So I'm asking for feedback here: How do you feel about imposing a $20,000,000 limit on any individual citizen's accumulation of assets?

[TransitJohn]

1. As long as the excess that is confiscated by the government

doesn't go the the Defense budget and instead goes to Social Services and infrastructure, it's fine. It's not like I'll ever be affected by such a hypothetical.

[Cleita]

12. That's the principle behind the progressive tax structure.

I'm in favor of going back to the 90% tax for the highest income brackets although, unfortunately, much of it went to war back then. In some countries their constitutions have human rights written into them, like the right to health care, shelter, living wages, etc.. It forces their governments to deliver on those things. I am also for wealth taxes. Wealth taxes forces uber riche people to spread their wealth among their heirs and charitable foundations, making sure the fortune is broken up into smaller parcels so that there would be very few billionaires left in the system spreading the wealth around a larger group.

[Mike K]

49. A progressive tax is okay, -

- except that by itself it allows for the emergence of billionaires, whether via loopholes or through exceptionally lucrative circumstances, and I am concerned with eliminating the kind of personal power and political influence that excessive wealth enables. So I am in favor of both a progressive tax and a limit on personal wealth.

In case there is any doubt or question as to my politics, I am a Socialist. I believe what is good for the whole society is far more important than what is good for any individuals. And I believe that what is good for the whole society should be pursued by and through whatever means necessary.

I have no problem with the accumulation of reasonable wealth. But excessive wealth is corrosive to democracy and should not be tolerated.

[jkshaw]

2. Sounds good to me, Mike

[Egalitariat]

3. What happens when they get to $20 million? They quit work? Work for free?

[Mike K]

44. When $20 million limit it reached -

- there are many options, such as giving some of it to relatives or charities, etc. Just as long as it's disposed of.

[jgraz]

46. We kill them and eat them.

[Yurovsky]

60. mmmm... rich people, it's what's for dinner! *n/t

nm

[jgraz]

74. The other white meat.

:P

[DURHAM D]

4. That would be ok. And if you have more -

just form a Trust.

No big deal and won't change a thing.

[NightWatcher]

5. get rid of taxable income caps and let them pay for the country that allowed them to become rich

[slackmaster]

6. One person having more than $20 million in assets does no harm to anyone

Your proposal is a classic example of a solution in search of a problem.

[anonymous171]

7. Huey Long thought that the cap should be at $60 million (in today's money.)

That sounds fair to me

[phantom power]

8. I don't think I would cap it. I'd tax net worth over 5 million. Progressively.

[reformist2]

26. Did you know a flat tax on net worth is more progressive than the current income tax?

It's a good way to catch a libertarian flat-footed to say you support a flat tax - on net worth.

[county worker]

43. In what way?

Flat tax is not progressive. A flat tax does not take into consideration the cost of living and division in income levels.

A person with 40k income pays 25% of his income to taxes thus leaving all other expenses out he has 30k to live on. A person making 40 million pays 10 million and has 30 million to live on.

As it is now a person making 40k would not pay that much tax. Now it takes a 25% flat tax rate to bring in as much money to the government as the progressive tax does now.

Flat tax or fair tax is a misnomer used to con people into voting against their own best interests.

You know that as well as I do.

[dysfunctional press]

33. taxing wealth is a lot different than taxing income.

if someone has a lot of wealth that isn't 'liquid', they may not be able to pay a 'wealth tax'.

[phantom power]

34. That's exactly right...

On the other hand, wealthy people already deal with this problem, in the form of property taxes. If you want to keep a lot of non-liquid net worth around, then you can have a job and earn enough to pay the taxes.

Isn't that what the rich are always telling us? Get A Job.

[dysfunctional press]

35. that isn't always an option.

particularly so for the elderly or disabled.

[phantom power]

36. I'll play devil's advocate: Plan for it. Just like we do now.

I have plans in place, for mitigating eventualities like retirement or becoming disabled.

Remember: if this tax even applies to you, it means you have more net worth (>= $5 million) than damn near everybody in the country. You've got resources. Maybe you have to sell them. Or some of them. Arguably you should count yourself lucky. Lots of people run into the same problems, but have nothing.

Stepping back a bit, I'll also point out that no taxation system is ever, ever going to be perfect. What are the advantages? What are the disadvantages?

[dysfunctional press]

79. if that's the way it's been all along, fine...

but in that same sense, it wouldn't be 'fair' to suddenly change to a 'wealth tax' system.

[reflection]

9. What is the reasoning behind the idea?

I understand what you are proposing, but I don't see where you say why you feel this is necessary.

[anonymous171]

13. Assets and wealth that are just sitting around in private banks do nothing for society

The government should confiscate them and put them to good use for the community.

[reflection]

14. Ah.

Then I disagree heartily on a cap and confiscate, though I might entertain a greatly enhanced tax on income above a particular level.

It's a moot point anyway, as a cap and confiscate plan would get zero traction in a country where a large number of legislators are wealthy to that degree anyway.

[MercutioATC]

18. Where do you think money for loans comes from?

Hint:

It's that money that's "just sitting around in private banks".

[anonymous171]

20. Then banks' use of assets should be limited to loans.

No more investment schemes.

[MercutioATC]

21. That's a banking regulation issue, not an accumulated asset limit issue.

[anonymous171]

22. This is an indirect banking regulation. It is one way that we could limit their influence

Then we could make community banks exempt from the cap and effectively eliminate private banks. I want to see bankers starving out on the street so I can berate them for being lazy and not working hard enough.

[MercutioATC]

27. Reinstituting slavery would be, too...at least by your measure.

There's nothing wrong with private banks. Technically, credit unions are "private banks".

[harkadog]

23. Loans are "investment schemes."

depending how you define those two words. Would you have a super committee somewhere determining which of the millions of loans that take place every year are worthy?

[jmowreader]

62. And please tell me, what you think a loan is?

To a banker, a loan IS an investment.

[Mike K]

16. I feel it is necessary for two main reasons, -

- the first being that while wealth undeniably equates to power excessive wealth equates to excessive power the consequences of which we are witnessing now in our almost totally corrupted government and the conspicuous shift from democracy to corporatocracy.

The second reason is a limit on individual accumulation will enable horizontal rather than vertical distribution of the nation's wealth.

[reflection]

24. You make a good point,

but if excessive wealth in the hands of private individuals equates to excessive power, why do you think the government would not just use it to establish an even larger MIC and empire? In other words, why would they just decide to do the right thing with it?

[anonymous171]

25. The Government is that way mostly because of the MIC

[reformist2]

10. I like the idea of an annual tax on net worth.

Just a 3% annual tax on net worth minus a $100,000 standard deduction would bring in as much revenue as the income tax does.

[AngryAmish]

28. A tax on net worth is a taking

see Constitution, US.

[reformist2]

37. It could be a tax on income that is dependent on net worth.

That would pass constitutional muster.

[Snow Bird]

11. As long as we're being silly here

you might as well propose a world wide, global limit of whatever arbitrary figure you want to set. If you don't you'll drive even more "assets" off shore than already occurs.

[MercutioATC]

15. One of the worst ideas I've read on this board.

Practical issues aside, it's simply wrong to cap the amount of financial success one can achieve.

[anonymous171]

17. LOL

[Mike K]

47. Bad idea?

Maybe.

But what I find most interesting about your comment is ten years ago it would have reflected the majority opinion whereas today's example is much different. There clearly is much less support for the kind of laissez faire capitalism which has led to the accumulation of outlandish wealth by a few and the imminent destitution of many, as well as the destruction of our Country's economy -- which has a direct bearing on our national security.

Whether it's "wrong" to impose a cap on accumulated personal wealth eventually becomes a philosophical question. Is it more wrong or less wrong than a situation in which insurance company executives are accumulating vast fortunes while millions of hard-working citizens cannot afford to provide adequate health care for themselves or their children? Similar disparities apply to many other areas of American life, such as the ultimate effect of usurious interest rates, the exploitive cost of prescription medications, heating oil and gasoline, etc. All of these problems are the result of greed on the part of individuals for whom the word enough has no meaning.

What I am proposing is a plan to show them the meaning of enough.

[MercutioATC]

68. I'd argue that there IS no "enough"...nor should there be.

Do we need real, legislated rules that provide a basic security net and chance to succeed for everybody? Absolutely.

You're talking about something completely different. What you suggest is a wholesale redistribution of wealth based on an arbitrary dollar amount and some bizarre concept that exceeding that amount is personally and/or societially undesirable.


We all deserve a chance to succeed. We are not entitled to a guarantee of success.

[cali]

19. nah, I don't support that. I do support real progressive taxation however.

It's impractical to impose a limit on assets.

[liberalhistorian]

29. I'm sorry, but I really don't think you have the right to do that.

In a free and democratic society, you don't have the right to make that determination for individuals. I don't see it happening anytime in the next 800 years, either.

[valerief]

30. Does that mean 20 million in the US and 500 million offshore? nt

[sinkingfeeling]

31. So, how would it work? Would the government or you and a posse swoop down

on a person whose assets reached $20,000,001? And do what? 'Take' the assets? That's against the Constitution.

It is a plan to accomplish what? Just putting a cap on assets? Redistribution of wealth? And I can think of a dozen ways to prevent any single individual from reaching your $20 million cap and still have assets that total way more. One is to incorporate.

Where would the assets be put to better use?

It's really a heavy blow to individual rights, isn't it?

I think raising taxes on the super wealthy has merit, your plan, no.

[Mike K]

39. Only the force of Law can make it work.

"So, how would it work? Would the government or you and a posse swoop down on a person whose assets reached $20,000,001? And do what? 'Take' the assets? That's against the Constitution.

You need to take that up with the IRS.

It is a plan to accomplish what? Just putting a cap on assets? Redistribution of wealth? And I can think of a dozen ways to prevent any single individual from reaching your $20 million cap and still have assets that total way more. One is to incorporate.

It is a plan to put an end to the means by which America is becoming the property of a ruling elite who have acquired the nation's wealth by capitalist manipulation.

It is a means by which our country's wealth may be equitably redistributed.

What are the dozen ways you can think of for circumventing the assets limit? Please present them for discussion. Your suggestion to incorporate as a means of evading confiscation presumes that no changes to existing laws will accompany the proposed assets limitation. Please assume that what I am proposing is radical in the extreme and would manifest in much revolutionary change.

Where would the assets be put to better use?

I'm sure that hundreds of good suggestions will issue from this question but I will offer just two for openers: How about repairing the nation's crumbling infrastructure and expanding Medicare to cover every American citizen.

It's really a heavy blow to individual rights, isn't it?

Which individuals? Are you one of the individuals who have more than $20,000,000 in personal assets? I'm not. And I really can't empathize with any individual who might complain about how hard it will be to get along on a mere twenty million.

I think raising taxes on the super wealthy has merit, your plan, no."

I think a progressive tax is fine -- plus a twenty million dollar limit on personal assets.

[sinkingfeeling]

40. Oh, I get it now. You want to set up your own country with your own laws.

[Dr. Strange]

32. While we're at it...anyone with an IQ over 145 should be hit in the head.

You know, until their IQ is in the appropriate range.

[tkmorris]

41. OK THAT made me chortle

:rofl:

[Fire_Medic_Dave]

51. That's pretty funny. Fortunately I don't have to worry about either.

[harun]

38. No limit, just move from income based tax system to charity based wealth system.

For example have people give a percentage of their wealth to charity each year. As opposed to taking chunks of peoples income.

Someone with a giant pile of gold doesn't necessary have any income, so may pay no tax on it whatsoever.

While someone in debt 500K, working minimum wage and barely able to afford gas to get to work is taxed heavily all over the place.

[county worker]

42. I don't think it is a good idea. As long as someone accumulates wealth and does not harm anyone I

am not concerned about it.

[MercutioATC]

45. Ok, what if I own a small business and the building and equipment value exceeds $20M?

Privately held, not incorporated.

Land, buildings, equipment, inventory, cash on hand come to $22M.

...oh, and I employ 22 people.


You're going to seize $2m in assets?

[Mike K]

52. No problem.

Corporate assets or (documentable) business assets are not personal assets.

But in a situation such as you've described, don't you think you'd be better off incorporated?

[Boojatta]

55. Suppose you have $10 million in cash and you have already

invested $30 million as a venture capitalist, estimating the current value of the investments you paid $30 million for as being $60 million. However, these aren't investments in listed securities, and they aren't actively traded. You employ several people to help you keep up-to-date on the ventures you have invested in and to help you evaluate new venture capital opportunities as they arise and as you become aware of them.

Do you have $70 million of business assets rather than $70 million of personal assets?

[Mike K]

63. I don't know.

But when someone who does know determines that possess more than the allowable twenty million, I must dispose of the excess.

[Boojatta]

66. Does anybody have a way of knowing?

Read this very short story:
Once upon a time, a cake was being baked. It was pulled out of the oven, either completely baked or half-baked. The cake contained walnuts. The baker had red hair. The end.

Now, demonstrate your knowledge of the story by choosing the correct statement:
A. The cake was completely baked.
B. The cake was half-baked.

[MercutioATC]

67. Great! I'm a hedge fund manager with $100M in assets...

(yes, some widows and orphans will go hungry...but I got mine)

I start an "interior design business" and use my three $20M houses to show "clients" what I can do. That's a "documentable business asset".

I start a "yacht brokerage". My $10M boat is now a "documentable business expense".

The $10M in cars I own? Did I mention that I'm starting an exotic auto dealership?


Ok, my "personal assets" are now $20M.

You can't touch me.

[jgraz]

48. I think a 100% inheritance tax is a much better idea

Let's see how much wealth someone can accumulate if they don't start out with millions from mommy and daddy.

[Fire_Medic_Dave]

50. No one will ever go for it.

Many in the Congress and Senate are worth more than that.

[Mike K]

57. Perhaps not today.

No one will ever go for it.

Dave,

Your user-name implies that you're a firefighter/EMT, which means you enjoy a secure and adequate civil service salary and benefits, including medical care and a good pension to look forward to. If that's correct it also means you are not among the rising class of pissed off, unemployed and disenfranchised Americans who are increasingly ready to support radical, even revolutionary, changes in the System.

At this time I'd say you are right in believing no one will go for it -- "it" being vigorous efforts to radically change the System. But to say that no one will ever go for it is assuming that things either will remain the same or will improve. Speaking for myself and based on what I've seen happen throughout the past decade I do not share your optimism and, as stated in my opening message in this thread, the responses to my radical proposal have changed appreciably over the years.

Many in the Congress and Senate are worth more than that.

True. Which is a compelling reason to pry them out of there as the necessary first step toward bringing about change.

[Fire_Medic_Dave]

71. Yes I have a very good job that will certainly shorten my life significantly.

I guess I should have said it will never come to pass. Plenty of people will go for it.

[MercutioATC]

72. While you're at it, the "ATC" in my username stands for "air traffic controller".

I, too, enjoy "secure and adequate civil service salary and benefits, including medical care and a good pension to look forward to".

I won't presume to speak for anybody else, but if "the rising class of pissed off, unemployed and disenfranchised Americans" presume to "support radical, even revolutionary, changes in the System" to the extent that they try to cap my potential financial success, I'll take that "good pension" and live abroad.

...as will almost anybody who would suffer under your proposed cap.

[ddeclue]

53. I disagree - there is nothing wrong with being rich provided you did it honestly.

I think that income tax rates should be significantly higher at the upper end though.

[DireStrike]

54. Unenforceable

I agree, but.

People that rich can hide their assets.

Even our laws on the books are not enforced very well, where these super-citizens are concerned.

[Boojatta]

56. Are people going to have insurance to cover any possible kind of civil court judgment against them?

Alternatively, if a court finds someone liable for damages, then is the sum of the compensation payable to all plaintiffs to be at most twenty million dollars?

[Mike 03]

58. This post is one reason I can't stand the "un-recommend" option.

Even though I don't agree that it is a good idea to impose an asset accumulation tax, I think this is a brilliant post and a worthy discussion.

Some people don't like the idea, so they have un-recommended the post so that people will ignore it, not see it, not even think about it.

EDIT:

When I "rec'd" this post, the >0 vanished, but when I made this post there was a negative listing on it.

[Mike K]

61. I didn't know there was such an option.

Thanks, Mike. Your objectivity is much appreciated.

When I first started posting this proposal some of the responses were surprisingly hostile, especially considering they came from non-Conservatives. In one case a rather impassioned defense of the super-rich came from someone who previously had complained about her inability to pay for a car repair. I frankly find it baffling.

Overall there seems to be much more acceptance of the idea than existed ten years ago, which is telling.

[iceman66]

59. I'd be all for it, because people are too damn greedy in this country

but I'd settle for a genuinely progressive tax system.

[Trillo]

64. Would this also limit corporations assets?

Or are you suggesting to only limit human citizens?

[jmowreader]

65. I still think it's un-American, communist, not feasible and/or destructive to free enterprise

Especially since you're talking about ASSETS instead of income.

Let's toss out a scenario. I somehow come up with a shitload of money. I decide I can do some good for the community by creating a place to hold charity functions...so I spend $18 million and build a copy of Wayne Manor, which contains various rooms for events and a little bit of space to live in. (Since I don't need a Batcave it'll be a bit less expensive than Master Bruce's.) Five years later the tax assessor comes in and marks it up to $22 million. Do I lose my home, and the community its place for Costumed Movie Nights, Casino Nights and Full Dress Balls, just because someone online believes no one should hold more than $20 million in assets?

Do this instead: index the capital gains tax rate to your gross income before deductions and credits. Anyone who's got an income of, say, $10 million is a serious stock player--either because his specified vocation is "securities trader" or he runs Walmart and they pay him $6 million in stock, $1 million in cash and the rest of it goes on a Walmart gift card. So let anyone with $10 million pay the standard capital gains rate. Then increase it by 0.2 percent for each million more he earns. Keep doing this until the taxpayer's capital gains tax rate is the same as the top marginal rate. Once the cap gains tax disappears, then start indexing down his deductions.

[MercutioATC]

70. "Serious stock player" or successful entrepreneur.

Granted, Sidney Frank had already built an empire (though he started from modest means), but his creation of the Grey Goose vodka brand could have been done by any brilliant and moderately-heeled entrepreneur.

He created the brand in 1997. He grew it for seven years. In 2004, he sold the manufacturing rights to Bacardi for $2.2B (yes, that's BILLION).

[varelse]

69. I can't see that happening

it doesn't evoke much of a reaction because it is so unlikely to ever be done. And, even were such a policy somehow be codified into law, I have no doubt that it would not be enforced evenhandedly (if at all).

[Cessna Invesco Palin]

73. Uh, imposed by whom exactly?

The Federal government? That would be almost blatantly unconstitutional.

State governments? Well then you get into the problem that not all states will want to implement it and create the same sorts of havens that Delaware is for incorporation right now.

I don't see any other entity with the power to effect this law.

[ipaint]

75. Sounds good to me.

Unless of course our elite representatives in congress legislate a minimum guaranteed income for all americans so the filthy rich can't hoard it all for themselves.
We seem not to have a problem stealing every last dime from those at the bottom but god forbid we put a generous cap on those at the top, who have hoarded enough to finance several generations of their offspring living in luxury.

[Incitatus]

76. So let's say you start your own business with your own money

and over the years the value of that business becomes greater than 20 million, then what?

Do you have to give the government a partnership for the excess value or will you be forced to sell off parts of your business to keep it at 20 million?

And what do you do about people who own homes worth more than 20 million?

[ipaint]

77. I don't know

Why don't we ask the banking or health ins. ceo's how they will ever manage with such a massive restriction on their lifestyles.

[Incitatus]

78. Their greed and the problems it creates can be diminished with

a 90% tax on anything over a few million.

An income tax is not what the OP is about.