cross-posted from: https://lemmy.ca/post/7812500
PARIS, Oct 23 (Reuters) - Governments should open a new front in the international clampdown on tax evasion with a global minimum tax on billionaires, which could raise $250 billion annually, the EU Tax Observatory said on Monday.
If levied, the sum would be equivalent to only 2% of the nearly $13 trillion in wealth owned by the 2,700 billionaires globally, the research group hosted at the Paris School of Economics said.
OK, I need some help here. The arguments I always see against taxing the rich are along the lines of “they have very little income by design, so taxing their income doesn’t help.” I saw somewhere that a lot of the ultra-wealthy get spending money by taking loans out on assets.
What are the implications of taxing loans greater than $10 million, or some such?
There are other pre-existing tax structures that make a lot more sense. It’d be much simpler to simply tax the consumption of the kinds of goods that those loans buy. If you have a large tax on hyper-expensive yachts or whatever, that simply has to be paid when the sale is made, no matter how many layers of shell companies or whatever other trickery you try to bury the purchase in. Trying to tax the loan, beyond not really making much inherent sense since net worth hasn’t actually changed, simply incentivizes a lot of loopholey nonsense that’s hard to track.
For instance, if my direct loan is gonna be taxed to hell, then I’ll just set up a shell company that takes out the loan instead. Sure, maybe there could be rules against it, but now the IRS has to spend a ton of time and money going down all these rabbit holes. Consumption taxes are essentially impossible to avoid, since you simply cannot buy your penthouse or yacht or diamonds or whatever without somebody paying the money.
Those assets are usually tons of stock which is used as collateral for the loans they live off of. Tax the stock.