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Shorter Ezra Klein

December 13th, 2007 · 6 Comments

Destroying businesses without raising any revenue is awesome, so long as nobody gets to have a yacht.

Of course, high luxury taxes won’t deter the hyper-rich from living large, only make more stark the divide between the merely well-off and the ludicrously wealthy. So even if you’re trying to decrease envy-related unhappiness, it’s not clear this does much good.

Addendum: Oh, snap. Though that’s not actually my view of the ’64 Civil Rights Act.

Tags: Markets


       

 

6 responses so far ↓

  • 1 Dave Meyer // Dec 13, 2007 at 11:43 am

    If you can afford $100 million or so for a super yacht, you’re not “merely well off,” you’re already “ludicrously wealthy.”

    Assuming one could be feasibly designed and targeted, do you have a problem with taxes focused on, say, those with net wealth more than $100,000,000 or annual income above $20,000,000?

  • 2 Anon // Dec 13, 2007 at 11:53 am

    The “feasibly designed and targeted” is the bad part about a luxury tax. How do you define a “luxury,” and who gets to decide on that definition? Do you go on an item by item basis? How would that not raise bill of attainder issues? Could you avoid equal protection and due process claims?

    Also, someone who can spend a 100 million on a yacht can spend a lot on tax attorneys.

    A super high income tax bracket would be a considerably different creature and wouldn’t be any different from the current one in its administration.

  • 3 Gil // Dec 13, 2007 at 12:16 pm

    I’ve got big problems with targeted taxes on the wealthy.

    First, on moral grounds, I don’t think having a large amount gives anybody as great a claim on legitimately acquired wealth than the owner. Wealth isn’t zero-sum. People (in legitimate markets) don’t get wealthy by impoverishing others.

    But, also, on pure utilitarian grounds I think that the world is much better off with, for example, Bill Gates allocating his wealth than governments doing it.

    The main quality of such taxes that attracts supporters is that it feeds their envy and desire to stick it to the successful.

    It’s really ugly.

  • 4 Anonymous // Dec 13, 2007 at 1:10 pm

    Its called funding the meritocracy. Or else we can have a society with more nepotism and hereditary wealth. And guess what that will get you!

  • 5 CLM // Dec 15, 2007 at 1:13 pm

    Ever notice how a Leftist defines “the idle rich” as anyone richer than himself?

  • 6 Ursula // Dec 15, 2007 at 5:13 pm

    The “feasibly designed and targeted” is the bad part about a luxury tax. How do you define a “luxury,” and who gets to decide on that definition? Do you go on an item by item basis?
    Good question. How do you define what ‘capital gains’ are? How do you define what ‘taxable income’ is? Simple- you draw a line. For a luxury tax, you could probably draw a line somewhere around $1 million, exempt realty, and call it a day. If you’re rich enough to spend $1 mill on anything that’s not a house, you can afford to share.

    Also, someone who can spend a 100 million on a yacht can spend a lot on tax attorneys. Which totally negates the value of taxation. Let’s just stop.

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