should we be taxing earnings...or should we be taxing wealth?

[Savannahmann]

81. Transition?

Even the suggestion of such a move would destroy real estate, cause a fire-sale of homes destroying the real estate market around the nation in weeks, if that long. The purchaser would have to show that the house was worth a fraction of the tax base, so buying the house would be a headache of epic proportions, even if they wanted to. Then they couldn't get a loan, so there would be nothing to stop the downward spiral of devalued property.

Then let's go look at cars. The rich guy driving around in his Ferrari with his trophy wife. Who would buy the car if he offered to sell it knowing that they would be taxed for having the car? Nobody, so the car market would similarly collapse. They would list their items at these fire sale prices. Do you have a painting that was in the family for generations? Value $1, because nobody is buying.

Value is not at this time determined by the labor that went into it. It is derived by the amount someone is willing to pay for it. A house can be listed at $10 Million. But if nobody will buy at $10 Million it is not worth that. A Bugatti Veyron may retail for $3 Million dollars, but if nobody buys it, it's not worth that. Eventually the prices start to drop until the buyer is willing to pay the asking price. Taxing wealth means that that price is going to be much much lower. The $10 million mansion might sell for ten cents on the dollar, or less. The current owner desperate to get it out of his portfolio, the new owner willing to take it on, but only if he can get it for a fraction of the current price for the tax issue.

Property taxes collected would plummet. Because everyone would point out how the houses are worth a fraction of the estimated value. Here it gets worse. That would cause drastic shortfalls in the County Budgets.

It is, without a doubt, the dumbest idea I've ever heard of. That wealth when the person dies, is passed on, and taxed, at that time. Property is taxed, based upon it's value, regarding property. Yachts pay taxes, planes pay taxes, car tags cost money, and property tax cost money. What is being talked about is cranking it up from a few mills of a percent, to actual percentages of their value. Do you really think that people would just fork over the money and be silent?

Let's say that the law allows me to own two cars and one house. The house down the street used as a Hunting Club by a dozen good old boys would not be protected. Those good old boys would dump that house in a second, which would show a huge loss in property value. I would use that to show that my property taxes are too high, because the house down the street sold for pennies on the estimated value. It would cascade out of control in days, or weeks at most. Banks would be taken over, which would cause a flood of foreign investors to pull their money out in a panic. The dollar would be worthless in no more than two months.

In the yard I have four cars. One for me to drive to work is an economical gas sipping car. One for the wife to drive, and one that I am lovingly restoring as a hobby. The fourth car is a pick up truck that I use for chores around the rural area I live in. The hobby car is now worthless because I can't afford it. I try to sell it to find that nobody wants it. I end up accepting pennies for the car because it is worth it to me to get the tax burden off my back. Now, I need the truck for the chores, and the wife needs to drive her car for the kids. That leaves my gas sipping econobox to be gotten rid of. Used car prices plummet, causing used car dealers to go bankrupt, which results in more lost jobs... Do you get the point now?

Value is determined not by the labor that has gone in, but by what someone is willing to pay for it. If you tax these things at actual percentages instead of mills, you will see the value plummet, and the people will not support you, they will revolt. Leftist policies would be banned by law in the resulting nation.