Saying "tax the rich" scores points, but there just aren't enough rich. Middle-income earners, far more numerous, make the majority of total income and bear the majority of the tax burden. Taxing the top 1% of earners at 100% would yield one trillion dollars (assuming they continued working). To get close to 3.8 trillion, you have to tax everyone making over $100,000, including joint filers, at 100%, and again assume they will continue working to earn at that level when they can't keep a dime of their income. That thousand per month in "free money" will definitely come in handy.
I spent about an hour and a half researching (sigh another unpublished draft), and my line of thinking proceeded not terribly unlike your response and the resulting thread with rinx. When I realized that we would probably have to start taxing other forms of wealth to make a basic income happen, that's when I threw up my hands and decided to forego the convo. I will say that the issue of exactly how much wealth is hidden at the top of the distribution was a recurring theme. Phrases like "according to best estimates" or "some indicators suggest" kept cropping up, and without solid statistics to base a mathematical argument off of, I'm sunk. That the numbers are obfuscated to such a high degree is quite convenient for the wealthy. It's not like I consider it some widespread conspiracy, it's more akin to the collective effects of "yes, I have a bit of money, and I'd rather not tell you exactly how much." Also, any reports issued by the gov't on the subject of wealth are almost guaranteed to be low-balling, due to unreported/offshore/loopholes. So let's say that there's actually twice as much, $84 trillion, in wealth held by American citizens. That's still only twelve years of sustained basic income. You could argue that much of this wealth will be replenished if the economy continues to hum along at a healthy pace, but will business proceed as usual? No one has the faintest clue. I have yet to see a convincing mathematical argument from the pro-basic income crowd as to how it could work. That all of these numbers are framed in the context of only $1,000 per month per person seems pretty damning.
We can plan on taxing income every year, but we can only tax a dollar of wealth once, then it's not available in following years. Wealth is harder to measure than income, but I find a paper that appears to give a total national wealth held by individuals of $42 trillion in 2001. The rich (those in the top 5%) hold 57% of this, about $24 trillion. That's enough to keep the am_Unition plan going for six years or so before it runs out. I am not sure what you mean by this. Depending on definitions, the middle class all together contributes more tax revenue than the most wealthy. But there are far more people in the middle class. If the tax burden is measured per capita, the wealthy pay far more.We could tax wealth
Taxing that doesn't even come close to the tax burden we put on the middle class.
That doesn't make sense, why would that be the case? Wealth taxes can be yearly just like income tax. Lets explain it this way. Let's say I'm rich. I have 5 million in a trust that I live off of. Every year I draw down 3%, about 150,000, and that is what I live on for the year. At most and assuming my tax guy is a total idiot, I pay 15% capitol gains tax or about $22,500 for the year. Now lets say I'm upper middle class and I earn that 150,000 in my job. I'm paying about 28% of that in taxes, even if I've managed to property caffeinate my tax guy. That's $42,000 for the year. The burden of taxes for the person still working is much, much higher then the rich guy. Many wealthy people I know don't pay taxes as they are able to keep their reported income below 20k. Edited for typosWe can plan on taxing income every year, but we can only tax a dollar of wealth once, then it's not available in following years.
Taxing that doesn't even come close to the tax burden we put on the middle class.
b_b explained my point, and added some additional concerns. It's also worth mentioning that wealth-in-hand was income at some point in the past. If you can sock away most of your after-tax income of $108,000, eventually you can live off your savings like the rich guy -- if it isn't re-taxed out of your hands.
I think he means that wealth, once taxed, is owned by the government. If I have $100, and the government takes 5%, I only have $95 left the next year, and so on. One could theoretically be taxed to the poorhouse, whereas income is only taxed once in hand. Some assets grow over time and some don't, and many assets have over inflated valuations that make taxing them questionable, not to mention the fact that for a lot of entrepreneurs, wealth is often illiquid. These reasons make wealth taxes unappealing to me.
Core inflation currently stands at ~2.1% according to the BLS. Not sure where you're getting -3% (not that it matters for the sake of this argument, because it could be anything 5 years from now). You're making some great assumptions that everyone with money has it in an S&P index fund. What about the individual who finds herself holding property that used to be worthless but is now in a trendy area? What about the entrepreneur who is completely cash poor but just received an investment valuing their company at $10,000,000? Should he have to sell out to pay Caesar because he's "rich"? There are many scenarios (as in these two easy examples) where wealth taxes represent an upward transfer of money, not a downward as you're proposing.
I'm not assuming that, like I said, if they don't invest they are losing money to inflation (which has a historic average of 3%). So the government will drive them to zero either way. Your money needs to grow over time. I think these examples you gave are definite problems we would have to figure out if we implement something like this. But if France, Italy, and most nordic countries can, we probably can too. I also think its much, much more common for rich people to not pay taxes then I do for the cases you describe (someone overnight owning a 10 million dollar business without time to set up liquid reserves isn't showing up on my facebook feed that often). If we never implement systems because there are possible edge cases we wouldn't have taxes at all :)