Art Basel Makes a Case against the Wealth Tax

[OfTheCross]

Wealth Tax Debate: Consumption Tax Would Be More Efficient | National Review

Here’s how it would work: Suppose Senator Elizabeth Warren becomes president and somehow passes her 2 percent wealth tax for those with fortunes greater than $50 million. If a member of the top 0.1 percent, with a fortune of more than $50 million, buys a $1 million artwork at Art Basel Miami, this reduces the buyer’s traceable wealth by $1,000,000. Say the buyer owns it for 10 years and then sells it for the same amount he bought it at (not an unreasonable assumption, given long-term trends in the Sotheby’s Mei Moses World All Art Index). The buyer has avoided $200,000 in wealth taxes (2 percent each year for 10 years) as a result of the purchase. However, he incurred $60,000 in Florida sales tax, which is 6 percent. So as a result, the buyer saves a net $140,000 in taxes. This works with any kind of art or luxury item that can’t be meaningfully tracked and priced by the IRS.

“How does it work this way? In practice, a wealth tax can only be assessed realistically on the value of objects that are somewhat frequently valued to avoid massive administrative costs. In other words, the government can compute a wealth tax with ease only and have a current price in order to charge a fixed percentage of it without having to hire armies of appraisers and auditors. Artwork and antiques were exempted in many European wealth-tax regimes on the grounds they were hard to value though Warren’s proposed wealth tax would not provide such exemption.

In the case of art, appraisers are often used to estimate an asset’s current price (though many appraisers will often give different estimates), but it’s not likely that the IRS will employ an army of appraisers who are experts on every area of contemporary art. Even if the government did manage to hire appraisers, many would have vastly different opinions over the value of a particular piece of art that hasn’t been sold for some time.

Furthermore, art purchases are not tracked, and no international art registry exists. Individuals can buy art anonymously; for example, a proxy for Saudi crown prince Mohammed Bin Salman anonymously bought Leonardo da Vinci’s Salvator Mundi in 2017 for $450 million.

For these reasons, it’s unlikely that high-end art collections (or other luxury items, such as jewels or watches) could reasonably be tracked by the IRS, given the millions of such objects that exist, if a wealth tax were ever to become law (constitutional issues aside).

At the same rate, art dealers and other sellers are still required by law to pay sales tax, which is easier to collect at the point of sale as a percentage of the transaction price. For instance, the buyer of the $1,000,000 piece of art still pays $60,000, or 6 percent of the initial price, suggesting that sales taxes are a much more efficient way to raise revenue.

Hence, if anything, the Art Basel banana makes the case for a consumption tax, which can be made progressive, like those advocated by AEI economist Alan Viard and others. A progressive consumption tax collected at the point of sale effectively pays a tax rebate to low and middle-income filers whose income is below certain thresholds to counteract the tax’s regressive properties.

 

[DEAD7]

I’m still amazed so many people are still falling for the tax the rich play...

 

[CrimsonTider]

WTF

 

[PoorAndDangerous]

I’m still amazed so many people are still falling for the tax the rich play...

Imagine being a boot licker

 

[OfTheCross]

I’m still amazed so many people are still falling for the tax the rich play...

When has that not worked?

What was a great time of economic growth that you'd like to replicate ?

Let's see what the tax rates were then...

 

[Pressure]

Leftists would have more success if they owned more guns.

 

[DEAD7]

When has that not worked?

What was a great time of economic growth that you'd like to replicate ?

Let's see what the tax rates were then...

The people excited about a tax on the wealthy will be the people posting about loopholes after the taxes are enacted.
Then rich aint paying more
Ya’ll getting hustled... again.

 

[OfTheCross]

The people excited about a tax on the wealthy will be the people posting about loopholes after the taxes are enacted.
Then rich aint paying more
Ya’ll getting hustled... again.

There's always loopholes, breh. Some make sense, some don't

People will get excited about the ones that don't make sense.

 

[Consigliere]

Luxury objects and drugs have always been a way to hide assets and move money from place to place.

Doesn’t mean that you shouldn’t try to tax people.

And yes the article is correct in that the wealthy and aspiring wealthy will always find or invent loopholes.

The real issue we have in this country is stagnant wage growth and wasteful government spending on 50 years of military adventurism.

 

[Secure Da Bag]

Bernie's 0.5% stock tax is still the best idea yet. And even if you can't properly tax things such as art, you can tax other things. Like yachts, mansions, cars, stocks, and bonds. Still doable.

 

[Regular_P]

So don't tax rich people so they can keep their money and the government gets nothing or tax them and they'll buy art, which gets taxed so the government gets something. The nerve of these fukking people.