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To: econjack

I understand the difference between stocks and flows.

Do you consider human capital a part of personal wealth? It’s reasonable to do so, but how do you properly measure it? If you have income from a risky source (for example, dividends from high-beta equity shares), what interest rate would you use to capitalize it to a present value?

Most people can calculate their current annual income with the help of a few documents (pay stubs, bank statements, etc.) Very few, and certainly not the government, can calculate a comprehensive, reasonable accurate measure of their wealth.

I used to ask my students if they were wealthy. Most would reply something like, “No; I only have a part-time job, a ten-year-old car, and some junky furniture.” But they didn’t understand the distinction between temporary (current) and permanent (life-cycle) wealth. A sensible wealth tax would, at a minimum, recognize that distinction.

There is a large professional literature on wealth versus income taxation that deals with both the theoretical and practical difficulties of properly measuring the relevant base.


82 posted on 02/07/2019 11:37:59 AM PST by riverdawg
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To: riverdawg
First, we already have a tax on wealth; we don't need another one. Second, the question is: Why does the gov't feel it needs to tax wealth? Why does the gov't feel it knows how to spend my money better than I do? Why is it better for the gov't to buy cell phones for beat beats than let the people who earned the money decide whether they want to buy cell phones for dead beats? Or, could it be the gov't spends money to buy votes?
83 posted on 02/10/2019 7:03:10 PM PST by econjack
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