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The rich convinced us that taxing them is too complicated but everyday people can be taxed pretty easily
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this post was submitted on 24 May 2026
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Hmm, you'd have to dramatically decrease the tax rate for it to be worth investing at all. My investments make ~5%/yr if taxed on the shares rather than the change in value 5%-3% for tax-3% for inflation = -1% per year. That'd literally destroy all financial assets, the entire finance sector, every university and research institute endowment, and the concept of retirement. So, let's assume you did reduce the rate: 5%*3%= 0.15% or $150 tax per $100k invested or 1.5mil/bil. Honestly, this rate I'm fine with as it's functionally equivalent to taxing the increase.
The issue is you're still incentivizing people to put money into higher returning investments rather than investing in more stable and assets, like bonds. I think your intent was to make investing in stocks "fair" but something that unstable should come with costly risks. It's not something sensible people should be investing into. We don't want the government bailing out the stock market at the cost of everything else every five years. People need to be deterred and those markets need to face consequences.
Unless you're lowering the tax rate as I suggested, you'd have to add a lot of exceptions to not destroy most of the world's established institutions, and those exceptions would be used as loop holes. I think it's unwise to add exceptions at all. People should just get over paying taxes. It's literally the foundation of money having value (the demand for money).
This is a wealth tax, not an income tax. We don't currently have a wealth tax to decrease; we would be establishing a new one. I would propose 1% per year.
Are you a natural person? Is your portfolio less than $10,000,000 in value?
If you answered "yes" to both questions, nothing changes for you. This only applies to corporate entities and ultra-high-net-worth individuals.
The only reason that higher returning investments are a problem is because they are used as a vehicle to drive wealth to the (ultra-)wealthy. When the wealthy are charged a high premium for these investments, that reason stops being a reason.
The established institutions in question are the ones creating the systemic problems. I see no compelling reason to maintain the institutions responsible. I see no compelling need for "a lot of exceptions". Destroy them. To minimize disruption, we could phase it in over time. Perhaps starting with a $1 billion portfolio exemption and decreasing it to $10 million over the course of a decade.
This would have the ultra-wealthy converting their financial assets to tangible assets; they would be buying up personal property (produced by workers) hand over fist, while the working class would be buying up those liquidated shares from the IRS at a similar rate. Ownership interest in these companies would be rapidly conveyed away from the Problem Class to the Working Class.
We don't need to call it something new. We already have property tax. It's an average of 1.1% around the United States.
Stocks are property.
Real Estate property taxes are assessed at the county/parish level, and apply only to land and improvements on that land. Securities would not be considered "real property". They are generally considered intangible personal property, which is not currently taxed. Further, the tax I am describing would be assessed at the federal level.
We certainly do need a way of distinguishing between existing real estate taxes and the proposed securities tax, even if the rates for the two taxes are identical.
Parent comment refers to "dramatically decreasing the tax rate", but does not describe what tax rate they are decreasing. Parent comment crunches some numbers in which they assume a 3% tax rate, not a 1.1% tax rate comparable to real property taxes you describe.
They did not indicate what tax rate they meant when they said it would need to be decreased. They certainly aren't referring to a real property tax rate when they suggest a decrease. I believe they were referring to either Federal Income Tax or Federal Capital Gains tax, which are approximately 25 to 50 times higher than the tax I was considering. Given the considerable discrepancy between what I meant and what they heard, I felt it important to indicate that this tax would be entirely separate from the existing taxes, and that it would be enacted for an entirely separate purpose.
I didn't (initially) define a proposed securities tax rate, but I did provided context for calculating one:
I would tax those securities held by corporate interests and the obscenely rich at a rate equal to or greater than their expected return on investment, so that the benefits of securities ownership convey primarily to working class investors. From Parent Comment's ROI (5%) and inflation (3%) numbers, the context I provided would allow for at most a 2% securities tax rate.
The securities tax rate I had in mind was 1%.
Okay, so you're not serious about change to your supposedly better system.
What?
You're advocating for maintaining status quo "institutions". I'm advocating improvement. You're advocating regression. I'm advocating progress.
Your criticism here makes your stance seem wildly inconsistent.
I think you need to explain what you mean by "institutions" when you suggest that I will be destroying them.
The "institutions" I believe will be destroyed by a securities tax are overtly harmful and should be destroyed. Can you provide me an example of a beneficial "institution" that would not survive?