Modeling a Wealth Tax: http://paulgraham.com/wtax.html
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With all due respect, isn’t this also true to home ownership (ie property taxes), yet people still flock in hoards to buy houses. For CA, a state where house demand has historically skyrocketed, the “property tax” can easily be 1.25%.
When you buy a house, the cost of property tax is already priced in.
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OK, but what about the time before property taxes existed?
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I believe there was a destruction of value that caused people to change location...pretty much the same thing
@paulg is soberly suggesting here. - Show replies
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So when you value a startup, the cost of the wealth tax will be priced in, right?
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Yeah, no matter what problem you solve the max you can make off of it is $30 million, so why solve big problems?
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But isn't this a post-mortem look? Question is, when the property-tax was introduced did it cause a mass exodus? If not, we can technically say the same thing after a carefully considered and balanced wealth-tax is integrated into the system that finds the sweet spot.
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Now that the SALT deduction is capped you are seeing an exodus (many different reasons but actually paying full property tax is one of them). In addition, the wealth tax will hit a much more mobile group than middle class homeowners.
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Same with creating a company?
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I believe this suffers from the same issue you laid out in "DH4. Counterargument" section of "How to Disagree." The fact that the cost of property tax is already priced in misses the point. At an annual rate of 1%, over the duration of a 30-year mortgage the government will...
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...have extracted 74% of the value of your home through property tax. This is precisely the same "applied over and over to the same money" phenomenon yet we as a society have come to accept it. I think that is a point worth being called out in the context of your piece.
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Which is why property tax is kind of dumb.
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