500 Richest gain additional $1.2trn in 2019

Firefly said:
imagine trying to impose a wealth tax on them with their armies of lawyers, tax accountants and shell companies.

Unless you had the vast majority of countries around the world signing up to the same treaties
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I don't understand, wouldn't those armies of lawyers, tax accountants etc be subject to the law?
Are you seriously suggesting that beyond a certain wealth level, the law no longer applies?


Firefly said:
look how difficult the EU is finding it to trying to get us to increase or corporation tax), you will have tax havens popping up all over the place, gladly willing to take the cash for secrecy.
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It is difficult for the EU to get us to increase our corporation tax (if that is what they are trying to do) because the EU is subject to its own laws also.
And changes to those laws require political support, namely EU governments. As it stands, the Irish government appears to be opposed to EU interference in our tax laws, not least because one of the criteria for us to push through Treaties like Maastricht, Nice etc was that the each member state would retain sovereignty over its tax affairs. Ireland is not alone in this, meaning, European governments representing the interests of their citizens, that number in the 10's of millions, should have, in a democracy, far more political sway than, say, 500 people.

I appreciate the sentiment that it would still be no mean feat to achieve. But, just to shoot the breeze for a moment, if it were achieved, what would be wrong with it?
 

Now imagine trying to introduce a new law that the vast majority of countries would sign up to!

"On paper, Russian President Vladimir Putin is a man of modest wealth. In reality, he may be one of the world's richest people."

How rich is Vladimir Putin?

On paper, Russian President Vladimir Putin is a man of modest wealth. In reality, he may be one of the world's richest people.
money.cnn.com

Do you think Comrade Putin would sign up to this, being the good communist he is?

WolfeTone said:
I appreciate the sentiment that it would still be no mean feat to achieve. But, just to shoot the breeze for a moment, if it were achieved, what would be wrong with it?
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Not much point....would be like me waxing lyrical about that bridge to New York...
 
Firefly said:
Ha!!!
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If you are bored, dont let me occupy your time....but before you go, could you answer a question - if a wealth tax were achievable, as I suggested, what would be wrong with it?
If you cant answer that, then we can leave it here.
 
WolfeTone said:
If you are bored, dont let me occupy your time....but before you go, could you answer a question - if a wealth tax were achievable, as I suggested, what would be wrong with it?
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What would be right with it? Sorry, I am bored so I am going to try my macro economic lecture again. I'm not patronising you Wolfie, I leave that to others.
You see the macro perspective can be totally different from the individual perspective. The best example of that was given to us by Keynes. Since Victorian times "saving" has been a virtue. Prudent woman can't have too much of it. But Keynes taught us that at the macro level too much savings can be a very bad thing indeed.
So when we see a paper worth of $1,200,000,000,000 being added to 500 folk's balance sheet, we think from our narrow perspective hey why can't we use that money to buy 558...... lollipops (see post #17), or 500 Childrens' Hospitals or distribute it $1m each to the least well off 1.2 million of us?
Those are economic illusions. The paper $1.2trn of the 500 cannot be converted to anything like what we think that is worth by redistribution.

Put more simply still, the chances of the 500 ever spending even a cent of that $1.2trn is remote but if it was redistributed to those that we would all agree to be deserving, it would be spent. The effect of that on economies already at near full throttle would be to increase prices. Yes there would be some redistributive effects but not from the 500. For example, giving it to those who would spend it on food would increase the price level of food. In fact, the type of redistribution dear to left wing agitators would lead to a redistribution from the lower middle to those below them in the economic pecking order.

Just shooting the breeze.
 
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Duke of Marmalade said:
What would be right with it? Sorry, I am bored so I am going to try my macro economic lecture again
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You see @Firefly, direct precise answers.

I do appreciate the underlying basic economic message and to an extent you are of course correct. But economics is not called the dismal science for nothing, so if doable, allow me a little latitude to suggest an idea that may offer some opportunity to consider some enhancement on the prevailing economic theory (unless you think there is nothing left to improve?).
I am of course open to learning the error of my ways and once shown what is wrong with such an idea, then if necessary, I will answer what is right with the idea.

I perhaps over-egged the notion of using 500 wealthiest people as a means to make my point.
So for ease of reference, and as this is nothing more than a crude experiment I will amend it down to 1 - the wealthiest individual on the planet. I will also take the liberty of applying a universally agreed principle of putting a limit on excessive wealth amongst the nations of the earth and that all armies of illegally practising lawyer's, tax accountants etc have been stood down. But I will offer a token insofar that the government will guarantee a financial return to this person equivalent to 0.1% for every year of their life of the total of the sum of excessive wealth confiscated or taxed, if ever, in real terms that individuals personal wealth ever falls below 1% of what his/her max acquired wealth ever was.
(E.g Richest person was worth $100bn. Gov confiscates 100% in excess of this figure.
Somehow this person goes bankrupt and the gov returns $100m every year for rest of life, in cash, to cope with the hardship).

We can use the richest country in the world, the US, as our laboratory, in turn, the richest person in the world and we can theorize on the pro's and cons and ponder on likely reactions, positive, negative or neutral from the wealthiest person, and the population at large (we will avoid using real names, as how Zuckerberg, Gates, and that Amazon guy react to a proposal is wholly subjective)

The wealthiest person in the world, an entrepreneur of highly successful internet retail company has acquired a personal wealth of $100bn. The government implements a law that says, as you are the wealthiest person in the world, any additional acquired wealth over and above what you have now will be taxed 100%. The following year, she acquires $10bn more. The government sends her a bill for $10bn payable by cash, cheque, bank transfer or transfer of ownership.
The following year, an owner of a tech firm surpasses this woman as the richest person in the world. Having acquired an additional $7bn to achieve this feat, the government sends him a bill for $7bn instead....and so forth.

What would be wrong with that?
 
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@WolfeTone , in your wealth redistribution scenario, who will do the crap jobs, who will pick the vegetables, clear the sewars, be the builders labourers. There is always a hierarchy and somebody has to do those jobs. When we discuss money , the abstraction of money allows us to distance ourselves from the nitty gritty. Maybe it's illegal migrants like in the US or indentured labour like in the gulf states
 

Who will do the crap jobs? The same people that do them now.
Im not sure I understand?
 
WolfeTone said:
Who will do the crap jobs? The same people that do them now.
Im not sure I understand?
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If the same people are doing those jobs, even with increased money, then their lives have not been improved. If they get enough extra money through wealth distribution then somebody else must do those jobs. We saw the failure of wealth distribution in Zimbabwe, land was redistributed, more people received wealth in land, production collapsed and everyone ended up poorer and starving. Why because the people that were working the farms and factories stopped doing it.
 

You are assuming that the wealth confiscated is to be distributed to those doing 'the crap jobs'.
I have never said that, it will be the prerogative of the administration of the day as to what should be done with the money.
If per chance a generous sum of say, €15bn, were to be confiscated and afforded to the Irish government and the prevailing government choose to use it to reduce our national debt - is there anyone, within the pages of AAM that would think paying down our national debt in this way would be a bad thing?
And in terms of wealth redistribution, a nation with sound fiscal policies and a low national debt is a recipe for inviting foreign investment, creating jobs, creating wealth, providing for better public services in transport, education, health etc.
As far as wealth distribution goes, there is more than one way to skin a cat.

So back to question above - what is wrong with imposing a 100% tax on additional acquired wealth on the wealthiest person in society?
 
WolfeTone said:
You are assuming that the wealth confiscated is to be distributed to those doing 'the crap jobs'.
I have never said that, it will be the prerogative of the administration of the day as to what should be done with the money.
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If it is the prerogative of the Irish government to distribute it then based on precedence they would do it through welfare, that's what they always do. There was a question asked in another thread, why when we have full employment are we still paying out 20 billion in welfare payments.
 

There are a plethora of reasons, not least is that many people have contributed to their retirement are in receipt of a State pension, people with disabilities, and the term 'full employment' is not defined as nobody unemployed.

So back to the question above - what is wrong with imposing a 100% tax on additional acquired wealth on the wealthiest person in society?
 
This has triggered a macro economic thought experiment in me, which I have not fully resolved yet. The scene is that the next time Mr Z visits Dublin we hold him for a €15bn ransom. We don't use it to pay down the national debt, that seriously neutralises the macro economic impact. So we spend it.

Now I am not going to tease out the feasibility of this project from a legal perspective but it does pose some macro economic challenges. Arguably Mr Z is not at all affected, he was very unlikely ever to be down to his last €15bn. So Ireland Inc. seems in real material terms to be €15bn better off, maybe say a brand new Merc for every male over 30 in the country, without any added economic added value having been input at all and without any significant redistribution of real material wealth.
I'm working on the conundrum and would welcome any help, watch this space.
 
I think you could be on to something, aside from the kidnapping bit. Instead of paying down the debt, we could (or rather the government of the day) could buy a new merc for anyone in the country.
But as has been alluded to by joe sod his main concern seems to be the precedence set by previous administrations by pumping social welfare transfers. That kind of knocks the Mercedes proposal a bit as I would be more inclined to agree with joe.
Nevertheless, there is always the prospect that such a store of wealth, sitting idly on the balance sheet of some people doing not much at all, could be used for real opportunities to develop and progress the welfare of the people as a whole. Oh, things like the broadband internet thingy that is causing such fuss over cost but which im reliably informed if we are to remain competitive, if we are to remain as a first world country, then this is something we need to do.
And obtaining such a windfall will allow other funds to be diverted to address other infrastructural deficiencies in the State - perhaps more educational programs, perhaps reducing waiting lists for operations, or providing cheaper childcare for working people. All of which, can and will add economic value to our society.
Otherwise, I cant help with the conundrum, other than to say having reduced my sample of 500 people to 1 single person I have yet to read a plausible reason as to why it cannot be done on the ONE SINGLE person who would be directly affected, but not by any stretch of the imagination, unduly affected.
Whereas, indirectly, thousands of our fellow citizens could be positively affected.

It would appear that phrases such as "broaden our tax base" are actually joky phrases, not meant to be a real thing. More revenue for State is not to be welcomed (or at least depending where it is being retrieved from).
Wealth tax, nope, Apple tax, nope, welfare cuts, definitely!

So aside from the Mercs, and the annual €5 pension increase et al, sticking exclusively with the theory, what effect, positive and negative would a 100% tax on additional acquired wealth on the wealthiest person in society have?
 
WolfeTone said:
So back to the question above - what is wrong with imposing a 100% tax on additional acquired wealth on the wealthiest person in society?
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Actually, I think you need to be more ambitious. Why not expand it to the top 25% of people in the world, (which would include the vast majority of people in Ireland (probably including yourself))? Every increase in wealth and 100% of it should go to the poorest 25%? Any wage increases, increases in property values and we all write a cheque for that amount and send it to the poorest 25%. Seems fair to me
 
Conundrum Solution
Of course in the thought experiment, Irish males over 30 have made a material gain - a spanking new Merc. But I forgot to mention the other premise - viz. that World economies are more or less operating at capacity i.e producing the optimal amount of goods and services. Therefore if Irish males over 30 have received a windfall share of these goods and services the pricing mechanism must be exacting redistribution from other agents. And here's the rub. The pricing mechanism will never have any impact on Mr Z's consumption of goods and services - he will always consume just as much as he wants. That is the illusion. Mr Z's paper wealth cannot be turned into additional goods and services for the rest of us by redistribution of that wealth.
Wolfie I appreciate your attempts to help with the conundrum. You were disadvantaged by not having the key premise that economies are at full capacity. If broadband and other good stuff was merely due to the lack of paper wealth or money we would simply print the stuff - has been tried. But we can only really afford these things if we have the real economic capacity to deliver them.
 
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