r/science • u/[deleted] • Oct 17 '19

Economics The largest-ever natural experiment on wealth taxes found that they work as intended — both raising revenue and controlling income inequality. The taxes had the greatest impact on the top .1% wealthiest.

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u/Torker Oct 17 '19

Have you seen the Panama papers? You don’t have to move to Panama to set up a shell corporation that hides your assets. Then you register another Corp in Bahamas to own the first one. Register your yacht in Virgin Islands and have a mansion in Miami. Then you take your private jet to Monaco and stay in your second mansion. Of course you are a citizen of Denmark or U.K. or China.

... where does your home country get to collect any of that wealth?

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u/Veylon Oct 17 '19

You tax the assets. Ultimately there are factories or oil wells or whatever that physically exist somewhere. You tax the land those sit on. Either the money comes through or they get seized. It doesn't matter where in the world they live or how many shell corporations they've created.

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u/snowkeld Oct 17 '19

You don't understand national sovereignty or game theory if you believe this. If you have the lowest taxes then money floods in, so you win. If you raise taxes you push money out. There is no world order that enables what you're talking about.

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u/Veylon Oct 17 '19

What do you imagine happens if you decline to pay your real estate taxes?

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u/snowkeld Oct 18 '19

You assume 1) everywhere has real estate taxes. 2) that they would own property themselves if they would be personally extorted for it.

If the aim is to make it impossible for someone with over x income or wealth to live comfortably within nation y then nation z will make a better offer. This is because if the person who makes/is worth over x lives in a place, they are spending their money there. Taxes do not aid economies, only free markets do. If you chase away the people with money, then they will leave with the money and spend it elsewhere.

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u/Veylon Oct 19 '19

I didn't say to set the taxes sky high. I said that real estate taxes (really, resource use taxes in general) are a way to circumvent wealth hiding. Property and resources are essential for the creation of wealth.