This is from an Op-Ed by Daniel Altman, an adjunct associate professor of economics at the New York University Stern School of Business. It appeared in the New York Times 11/18/2012. "American household wealth totaled more than $58 trillion in 2010. A flat wealth tax of just 1.5 percent on financial assets and other wealth like housing, cars and business ownership would have been more than enough to replace all the revenue of the income, estate and gift taxes, which amounted to about $833 billion after refunds. Brackets of, say, zero percent up to $500,000 in wealth, 1 percent for wealth between $500,000 and $1 million, and 2 percent for wealth above $1 million would probably have done the trick as well."
"In fact, the majority of American families would receive an enormous tax cut. Some would owe only payroll taxes (for Social Security and Medicare) and state and local taxes every year, and others would pay less in wealth tax than they did in income tax. Taxes on earnings, capital gains, dividends and interest, all of which may distort decisions about working and investing, would disappear."
It has been said that the U.S. economy is 70% consumer driven. If consumers have more to spend (lower taxes for those not wealthy) this will cause the economy to boom and therefore we'll have more consumers (full employment), which in turn will make the wealthy, wealthier. I'm having a hard time seeing how this is anything but a win-win idea.
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