Assuming billionaires were going to get a special tax, how would you actually determine how much to tax them? Sure some would be straightforward like Musk where it’s entirely derived from a few companies with known ownership stakes, but what about all the others?
We don’t even know the names of most of the billionaires. With all the games they can play to hide money, now made even easier thanks to the changes Trump made in his first few months, how would you even figure out who and what amount to tax? They don’t have a normal salary or easily documented income like everyone else.
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A potential mathematical approach to equal taxation that works in any country:
- Calculate the average income of every citizen. Let A = the average income (amount per year)
- Set a baseline tax amount for the average (e.g. 10%). Let P = baseline tax percentage
- Given a person’s income, calculate how far above or below they are compared to the average. Let I = a person’s income. We can calculate the difference, D, with D = I - A. A positive value means the person’s income is above average, whereas negative is below.
- Calculate the difference as a percentage. Let Q = D / A
- Calculate the percentage of the tax percentage. This will determine how much more or less a person will have to pay: R = Q * P
- Finally, calculate the person’s unique tax amount: T = P + R. If R was a positive value, that means the person will pay more. If R was a negative value, they pay less. If R = 0, they pay the base amount.
Example: Let’s say the average income per year is $50,000 USD, and the baseline tax rate is 10%
So A =50,000 and P = 10% / 100 = 0.1
Given a person’s income: $30,000/yr:
I = 30,000
Calculate the difference:
D = 30,000 – 50,000 = –20,000 Q = –20,000 / 50,000 = –0.4 (–40%)
Calculate how much more/less the person pays:
R = –0.4 * 0.1 = –0.04 (–4%)
Calculate the unique tax amount:
T = 0.1 + (–0.04) = 0.1 – 0.04 = 0.6 (6%)
There might be a better set of formulas, but this is what I came up with. Let me know if I made a mistake in my math.
Tax the total of any loans backed by speculative assets taken out in a one year period as both realized gains and income if they total more than 100x the average take home pay of the bottom 20% of earners (currently around $16k).
If they want higher loans without taxes, people have to be paid more.
I would do a small transaction tax like 1% that should hopefully put the brakes on short term trading and tax inheritance the same as lottery winnings. Tax investment the same as income. for corps tax them based on their entire holdings right up to their top owner with all its subsidiaires but they can deduct any tax they pay in authorized countries (so the way we do sanctions now we could take away their taxes being able to be deducted).
Demand full proof of ownership from any company and asset. If they provide strawman, tax those.
If they don’t provide verifiable information, seize the companies and assets and put them into public hands, or if that’s not possible (digital services for example) deny them to operate in your country. The actual owners will reveil themselves quickly. Then tax them.
The biggest loophole they use is taking out loans and using stock as collateral. Stock is supposed to be unrealized so if it is used as part of ANY transaction it should instantly become taxable.
Then every 5 years or so, force everyone to “realize” their stock value for taxation
I feel like that just overcomplicates things. As long as they can’t use the money, they’re not causing harm, right?
If you want a more continuous stream of income, a wealth tax would make more sense.
I’ve heard this before but don’t understand how it works… Eventually they’ll need to pay it off, no? So they sell stocks to pay the loan?
Its a buy borrow die strategy. You take loans and refi them to be larger and larger until you die, when you do, the cost basis is reset (so if your cost basis was 1,000,000, but you investments are now worth 20,000,000, your cost basis becomes an untaxable 20,000,000) this new “stepped up” untaxable money (in investments) is used to pay off the debt by selling some assets, lets say 5,000,000 in debt covered by selling (untaxable) investments. This would be for someone with a handful of millions of dollars, I can only imagine what it is like for someone who has hundreds of billions in assets…
Tax stock when it is given for bonus or pay package. The gov gets the top end tax rate with of the stock to be sold over the next 12 months.
In my opinion, you’d establish a number that is the max amount anyone would need in a region per year, let’s say 1 million. For one million you could finance a place to live, a car, food for you and your family, hobbies and maybe a trip or two. Then multiply that by three. Just to shut down the ones who’d argue. Three times what ever the amount of money anyone would need is an obscene amount of money per year. Everything else goes to 1) the state to regulate the quality and cost of the community, and 2) entities that generate value and has jobs
The problem is that their wealth is in unrealized gains on speculative assets, but they take out loans using those assets as collateral.
That means we have to either treat assets used for collateral as realized gains, as income, or both. But, we need to make sure normal people don’t get caught up in it in a way the wealthy can’t exploit.
My thoughts are that we pick a number like you were talking about, but make it based on a variable like 100x the average take home pay of the bottom 20% of earners, which would be $1.6m. But, apply it to the total of all loans in a year period so they can’t just take out a bunch of small loans.
Take their moneys.
100% of what they make over $1B.
I think OP is asking how you figure that out. In general, billionaires don’t “make” anything - on paper.
Close all the loopholes that let them skirt the capital gains taxes and other nonsense. Make it illegal to use stocks as collateral on loans. Etc.
With a large bladed machine.
I would confiscate their rocket ships and satellites. All yachts designated as navy or coast guard. You could also do one of those lies about the stock market so it can be mutilated and raped to bring more profit, but for the citizenry, so it’s a good thing. /s
There’s just an upper limit on what any one person can own.
Ten houses, one private airplane, one yacht, and $100 million worth of ‘stuff.’
No more than 1% of any company.
That’s just off the top of my head for discussion. Feel free to jiggle with the numbers.
No more than 1% of any company doesn’t sound reasonable. Imagine creating a company and only being allowed to own 1%. Heck, if you just made a company who even are you going to sell the other 99% to?
This is the rate for billionaires.
I guess you tax assets more and salaries less - and work internationally to make tax avoidance harder and less profitable by taxing capital flows and by cracking down on tax havens.
Unless you can get a political consensus on it, I don’t think an inheritance tax will be very effective. Tax planners will find a way to transfer the wealth before it gets inherited, helped by certain kinds of politicians whenever they have power.
Taxing the ultra rich is easy. Taxing them without screwing over someone else in the process is hard. They can afford the best lawyers and accountants to find loopholes and still consider it cheap.
If somebody owns shares of $company_A, they have to pay 1% of the shares annually, which become public property. This way, the means of production (company shares) slowly become public property over time.
I wouldn’t mind if those shares were converted into cooperatives after a while.
