Matthew, if the apportionment requirement is an insuperable obstacle to direct federal property taxes, then perhaps it is not so “idiotic” after all—and its “historical origins” are not necessarily “obscure,” n’est-ce pas?
On a more serious note, if your suspicions are misplaced and R. R. Reno is in fact serious, the key objection to his reasoning is this: it’s technically true that growth comes from productivity and productivity comes from work and investment rather than the mere ownership of wealth, but a wealth tax undermines the social institutions and environments necessary to foster productive work and investment—and it’s especially detrimental to the cultivation of institutions whose purposes are non-economic. The maintenance of extra-economic cultural institutions (schools, churches, charitable foundations) is generally dependent upon large accumulations of wealth. Taxing wealth rather than exchange would incentivize us to invest more of our wealth back into economic activity rather than withdrawing it from the economy for other purposes.
December 11th, 2012 | 1:18 pm
As I posted in response to the original post:-
I live in Scotland and I own a piece of ground, about 18 acres of winter pasture, which is known locally as “the ten shilling land.” [The shilling is an old British coin, 20 to the pound, abolished in 1971]
As a child, I was intrigued by the name and so I asked the old shepherd about it. He looked after the sheep on the common grazings and he knew everything. He told me that there was once a wicked king, who charged the poor people money, just for living on their own land.
Years later, I had occasion to check the progress of title in the Register of Sasines and, sure enough, the piece of ground was described as being “ten shilling land of Old Extent.” Now, the Old Extent was a survey of rental values, carried out by King Alexander III in 1280.
People around here don’t forget things like that in a hurry.
Any politician who wants his name held in execration for seven centuries should certainly try a wealth tax.
December 11th, 2012 | 5:31 pm
“Taxing wealth rather than exchange would incentivize us to invest more of our wealth back into economic activity rather than withdrawing it from the economy for other purposes.”
With all due respect assertions such as the above have become my indicator for detecting individuals who lack a solid economic grounding.
Wealth may be popularly thought to be money squirreled away under a floorboard, or hoarded in some safe, but it is not. People who have wealth obtained and maintain it by putting it to work. They don’t sit around counting their sheckels, they seek a return. The only people who are “wealthy” who would even think of doing so, are lottery parvenues. (actually, the case could be made that lottery winners are hyperpecunious, not wealthy, and there is a distinction between being wealthy and having a lot of money)
Wealth, real wealth is ALREADY in the economic system, whether it be stocks that capitalize companies, homes that we live in, businesses that are obviously in the economic system.
However, let’s assume I have some land (as an example of an asset that one could own not have engaged in any economic activity). If landowners cannot find a product use for their land, a tax on it will only encourage discounted sales to parties positioned to make predatory purchases.
In addition, a wealth tax would require greater intrusions by the IRS than the income tax. The government would be looking at everything to assure nothing went undeclared or was converted or misclassified as a nontaxable asset-because you can be sure there will be exemptions. Then there would be endless quibbling about the value of closely held businesses, complex financial instruments, restricted securities and a whole range of things whose value is nothing more than a guess until it is actually sold.
I really suggest that people who think taxes somehow encourage economic activity consult Henry Hazlitt’s “Economics in One Lesson”, especially the chapter “Taxes Discourage Production”. It’s available at all online book sellers, and as a free pdf, below.
http://www.fee.org/files/doclib/20121116_EconomicsInOneLesson.pdf
The wealth tax is nothing but the insertion point for Marxist statism and must be stopped now.
December 11th, 2012 | 9:29 pm
Ahem. From my post: “A wealth tax undermines the social institutions and environments necessary to foster productive work and investment.”
December 12th, 2012 | 12:36 am
Ahem. I’m not disputing “A wealth tax undermines the social institutions and environments necessary to foster productive work and investment.” and that statement isn’t in conflict with the “Taxing wealth rather than exchange would incentivize us to invest more of our wealth back into economic activity rather than withdrawing it from the economy for other purposes.”.
You could hold the position that wealth taxes are socially debasing (they are, and I agree) but believe, as many do, in the Keynesian misapprehension of saving as idle assets being removed from the economy and that a property tax discourages that “idleness”-and there’s plenty of municipal and school property taxes enacted on that popular myth.
Geez, I haven’t even begun to take issue with this: “institutions whose purposes are non-economic”. (The best explanation of this I’ve ever heard is “nonprofit” is a tax status, it’s a lousy business model)
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