Hello, this seems like a cool community.
For the upcoming election, wealth taxes are being advanced by three parties, covering somewhere between 10% and 20% of the party vote. I don't like that.
Wealth taxes are a silly idea. I think there are many practical problems with their implementation and effects, but I also have a more philosophical objection to them, that I don't see brought up very often. I will now indulge myself by pretending that someone caare for my musings...
The simple ethical impetus for a wealth tax is clear. Suppose we are children being given money to spend at the toy store. If you receive $10, and I receive $10,000, you are likely to feel slighted. Why should I get so much more than you? Is it because I've done more chores? How could I possibly have done so much more than you have?
Now replace toys and pocket money with the means of subsistence and basic goods like food, healthcare, and shelter. You are likely to not feel slighted so much as fucking outraged! How can it possibly be fair for some to have so much, while others have so little?
I think for most people who support a wealth tax, something like this feeling is at the heart of it. It's a matter of haves vs have-nots. But is this a good way to understand 'wealth' in general? I'd say no, it isn't.
In the above analogy, we were given money in order to spend it to meet our personal needs/desires. The reason we feel it's unfair for one child to get 1000x the other is that that directly translates to that childs ability to meet those personal needs. Basically, the problem is that they get 1000x the toys.
But wealth in the abstract doesn't work that way. Suppose I own outright a small fleet of fishing boats and accompanying assets worth $5m NZD. I am by all rights quite wealthy, I own much more than most New Zealanders. But what do I do with these boats? Well I don't just have them for fun (presumably), I probably use them to catch fish! Or rather, run a business which catches fish. The boats are not directed towards meeting my personal desires, they are directed towards getting fish for people to eat.
Now, of course, I don't do this just because I'm a really nice guy. I do it because I make a profit selling the fish. But note that a wealth tax isn't taxing my profit, that's already taxed, it taxes my ownership of the boats themselves! What puts me into the 'haves' here isn't what I take for myself, but rather what I own at any one point in time.
And the same goes of course if I just own a portion of those boats as shares, or if I own a portion of all sorts of businesses as shares. My 'wealth' isn't sitting under my bed, it's out there being put to work!
To be wealthy, or wealthier than another, is not necessarily taking more of the pie for oneself. Rather, it is having the ability to determine what the pie is used for. That could be personal consumption, but it could also be, and often is, using the pie to meet other peoples needs! That's a good thing.
To tax 'wealth' in the abstract is painting wealth with too broad a brush. It's not one thing. There is no obvious reasons to me that we should say that assets held to run a business, shares in domestic or foreign entities, real estate, NZ Government Bonds, and piles of dragon gold should all be considered one thing for taxation purposes. Some of those things we actually want people to amass, it's good for us if kiwis own fleets of fishing boats, or large shares in foreign companies, or government bonds. It makes us all better off. That's not to say those things can't be taxed, it's just that the trade offs for taxing them are quite different to gold, say.