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

[Savannahmann]

129. As I mentioned

Property tax is based upon value, but it is in mills, in other words, very low percentage. What the OP was about was taxing wealth, in which he mentioned primary residence as being excluded.

The dumping of other properties would be almost instantaneous. Because no one would risk it. That would cause a huge drop in property values. Let's say you live on a street. On your street are other single home owners, and two houses that are summer homes for retirees like my Grandparents who spent winters in Florida and Summers in Michigan. That second house would be too expensive to keep, and they would dump it. Investment property which you rent out would be taxed because that is part of your wealth, and it would destroy your earnings rather than supplement it. All of those would be dumped on the market at once, the asking price dropping like a rock every couple weeks.

Those houses on your street would be worth much much less as soon as any of those houses started to sell. Now, you're making payments on a house that is covered by a $125k loan. The other houses on the street are very similar. In a couple months the average value of a house on your street would be well under half. The tax risk would be too great to keep those houses. You would demand that your house valuation on your property tax reflect this reduced value. You might even resent making the payments on a house that is worth half what you are paying for it. A lot of people did resent that fact, the underwater mortgages of not too long ago. You might have heard President Obama talking about it.

People, even rich people, don't keep their money in cash, electronic or otherwise at the bank. They buy and sell stocks, bonds, real estate, and other property. When you threaten to tax their "wealth" they will dump the property, fire-sale prices will result rather quickly. This will devalue the property that the bank is using to secure loans, like the aforementioned home loan. Your house is no longer worth $125k. It is barely worth $75k. You can't refinance, because the banks aren't loaning money. Even if you did, you couldn't get an assessor to agree that the house is worth $125k anymore with the houses on the street dumping for less than $75k. You would get disgusted, many people did, and walk away from the loan, signing the house back over to the bank. The bank has a loss of half the value already, and it's only going to get worse.

Cars, art, and any other property with a perceived value. Now the rich guy that the OP wants to get, he is going to be arguing that his property isn't worth a tenth of what you think it is, using the fire-sale prices that he helped cause to prove his point. Stocks will be dumped, causing the market to crash. So thats the stock market and the banks all completely screwed. Who is hurt? Not the rich guy, he shuffled his money offshore and got out of dollars and into Yuan, Yen, Euro's, or Pound Sterling. Who is left completely screwed? The people like you in my scenario, people trying to live the dream.

Now, quick question. If the Democratic Party led the fight to get the Rich guys, and destroyed the value of your home, your retirement, and destroyed your job, how likely would you be to vote for them ever again? You would vote for anyone who promised to put things back the way they were.

Economically, the plan is suicidal. Politically, the plan is suicidal. To get the trifecta, you would have to commit suicide socially, and this plan comes mighty close to that. It would make Liberalism and Progressive policy a pariah, one that no one would vote for until a generation, or more, had passed. By then, we'd be a good little group of fascists.

There is nothing good about this plan. Nothing smart, nothing wise, and nothing to be gained. The plan comes pretty close to winning the triple crown of stupidity.