I thought the main reason for taxes was to fund initiatives for the common good.
This article is not primarily about why to tax but what to tax. Think of it as, given you’re going to tax a million dollars to fund something, who do you take it from? The exception is Pigouvian taxes, which really are just to internalize negative externalities and thus correct the market. That the government is left holding the money afterward is purely “accidental”.
Regarding wealth tax, what do you do about illiquid assets?
Given a wealthy person can easily pre-calculate the approximate wealth tax she’ll pay a year or more in advance, this shouldn’t be much of an issue. Everything’s liquid for some price.
Regarding wealth tax, what do you do about illiquid assets? Have you heard about “hand to mouth rich”? That’s what I used to call “house poor” — where your mortgage leaves you with no disposable income. How about retirees living on income from assets, or living on the property they paid off so they could retire on it?
I have no problem asking a millionaire to downsize and use the excess cash to pay taxes. We’re talking about a progressive/logarithmic tax here, where people with less than about 200,000$ in net wealth would pay almost nothing. Combined with a UBI, that would be roughly the break even point, below which people would take in more than they are taxed, in net.
BTW, if you think the retiree could always “go back to work” and earn the income needed for a wealth tax, think again.
People so poor they’d have to work aren’t who I’m targeting with a logarithmic wealth tax.