How to tax the rich:

This is one of those ideas that attracts a lot of discussion, but never really happens, I thought I'd add a few thoughts about why. Firstly there are a few ideas which are very attractive but have never worked and will never work, best get those out first.

1. Income taxes. Forget it, the rich don't make income. Bezos's 2019 salary was $82k. If you chose Income Tax, sorry you lose.

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2. Wealth Tax. This "works", but only well enough to either:
A. Make all rich people leave the country (which is actually not a great thing, I'll get to this later) or
B. Force them to get political, which is possibly a real disaster.

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In a well organized economy, the most clever and ambitious people become the most rich. This is actually a society level self preservation mechanism, because the biggest risk to society is not the foolish and lazy, it's the clever and ambitious.

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By the same token, the people most able to benefit society are also, the clever and ambitious. So this is why it's not a great idea to implement policies that will just run them out of the country, you want to be more of a Switzerland than a Cuba.

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So it would seem that all is lost, but that is not true. There are a couple of ways to tax the rich that they will either not have any major problem with, or will accept the deal anyway...

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1. Tax conspicuous consumption, particularly land. A lot of rich people want to signal to other rich people that they're rich. There are a number of ways they do this, from fine art to Italian sports cars. But one way in particular is by living where only rich people can live.

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One has to accept that rich people are going to self-segregate and there isn't much to be done about that. But imposing taxes on living in "rich neighborhoods" can be highly effective because those people still get the value of being able to signal wealth to their peers.

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2. Worker protections. This is a sort of indirect tax on the rich because the workers pay the tax and the rich pay the salaries. However, if these taxes are cycled back into building a competitive workforce, it's still a good deal.

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But worker protections need to also come with import tariffs because otherwise the rich will move their factories overseas to where there is cheap labor, and dump the import products on the local economy.

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@cjd

In general I think what was feasible for outsourcing overseas, already was in 2000's and since then we have a stable balance. Lots of call center jobs for example were moved from UK to Eastern Europe but only to new EU countries, due to the reasons listed above. For a few last years Ukraine has become a popular target for IT outsourcing, but I don't think it actually happened at the cost of job loss in EU because demand there is so high that I guess it was required for growth.

@kravietz
The EU is relatively protected because it does have tariffs and it also has VAT which effectively works as a tariff as well. You gotta go to the US to see a big import store drain all of the money out of a community and leave it impoverished.

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