The economist who helped invent the proposed wealth tax: Gabriel Zucman is a French economist who has studied the effects that accumulated wealth has had on global inequality. According to his calculations, $7.6 trillion of global household wealth was held in tax havens, and it was mostly being diverted to mutual funds incorporated in Luxembourg, the Cayman Islands, and Ireland. Here’s why he’s advocating a progressive wealth tax as a solution to global inequality, one that rethinks both evasion and the goals of taxation.(The New Yorker) “If you have banks that feel that they are too big to indict then they will continue to commit some form of financial crimes. They will budget costs for fines.”
When you go to convert them to currency to use. "Well Mr. Ironchef, we at Bank of Money have to declare to the IRS any time your rolling annual withdrawal is over $10,000." Think you can escape via bitcoin? I'm very close to a handful of very wealthy bitcoin traders and taxes are an absolute nightmare. If you ever want to use the money you make in this area (because holding cash in bitcoin is suicide) you'll again have to convert to USD and you'll be beholden to the IRS. In a few days you'll get a letter from the IRS saying an agent will be visiting you to help count your gold bars. Just remember, many master criminals survived being locked up for the real crimes they committed, only to be sent to the clink for tax evasion. The IRS does not screw around.
At some point you had to have cash to buy them. Actually the real product to avoid this is real estate. You can basically state the value of a property at almost whatever you want, the more upmarket the less likely that there are objective comps and throw in overseas and you can almost just make up a number. Interestingly you don't even have to report real estate at all on the FBAR. We all know at least one crime syndicate that uses this squishy valuation of real estate to maximum advantage in NYC and around the world.
The mega-wealthy aren't exactly constrained by the usual narrow avenues available to Joe Average. @ironchef - while you're transporting your bullion via your Lear jet to France (which, BTW, is one of the countries that has not signed a reporting agreement with the US) - lean out and wave hello as you pass overhead. If you happen to drop a gold bar or two, that would not be taken amiss; I'll have a nice target set up in the field out back. The rich have been evading tax authorities pretty much since they've existed - and they plan how to get around laws in the same way that they plan how to get around thieves. That is to say, carefully enough that their likelihood of being caught out by either one is essentially nil. Due to an odd set of circumstances years ago, I ended up... let's call it, peripherally connected... to a deal where a couple of very wealthy individuals - one in South America and one in the US - worked out a deal for getting the former's wealth out without bank transfers, physical movement of valuables across a border, or anything of the sort. It ended with the southerner coming to the US - leaving his former country with little other than personal luggage, which made the officials there absolutely certain that he'd be coming back to all those millions he was leaving - and walking in, as owner, into a beautiful house in one of the most expensive areas in the US as well as a very large bank account here. Leaving lots of impressive-looking but ultimately worthless companies and properties that had been quietly sold, via several layers of indirection, behind. I was, and remain, shocked by how simple the process was at its core - and the sense that I got of this being just one of a broad set of strategies that folks at that level use on a regular basis.
I'm not against the payment of taxes in order to support the infrastructure of the nation, from which everyone benefits. The other side of this coin is that every citizen should benefit from equivalent opportunities in life as afforded by the nation. But if some persons are more efficient at using those opportunities and amassing capital than others, I don't see it is the nation's job to confiscate a proportion of this and use or redistribute at their will. I rather think a nation should uphold legal entitlement to own assets which have been legally obtained.
A few things to think about. What if a person's parents were the efficient ones? Grandparents? Not that I'm necessarily advocating for taxing inheritances away, just saying your argument could have unintended consequences since it seems to depend on having somehow "earned" wealth or continuing to be efficient with it, as heirs so often are not. A more robust argument would need to account for that. The fundamental attribution error is also a real thing. Bottom line it turns out we humans more often than not confuse "more efficient" (or also "less efficient", it goes both ways) for many things that in fact were largely determined by chance. It's also worth considering that often great wealth stemmed from over proportionate use of our national resources. I wouldn't diminish anything Bezos has done, but his wealth was built on use of our interstates, airspace, educational system, rule of law....all thousands of times more than you or I individually use those resources. Is it unreasonable to expect he contribute more back to the system that allowed him to achieve what he achieved. After all, if you'd parachuted him into Somalia at age 30 and restricted him to Africa there'd be no Amazon, he needs everything that existed in the US to build what he built. Finally, are the rich better off in Argentina or Paraguay or any other third world country with wealth extremes then they are in the parts of the world with a robust middle class? I'd argue not, and that the richer you are the more interested you should be in insuring that wealth inequality doesn't become too great....for purely selfish reasons. I'll have what for me will be a very large tax bill this year. And I'm happy to pay it and consider myself one of the very last people who need a tax break of any kind.
It's not really about confiscation. In my mind, it's about getting what is rightly owed. The 0.1% (the primary target of these) are notoriously smart about hiding money from the tax man. Off shore shelters, real estate, etc are all avenues these people have that Average Joe does not. Many of these are objectively illegal, but they can afford a long winded legal battle that again your average tax payer just cannot. If we expect the true libertarian ideal of equal opportunity, we need to equalize the playing field in one thing everyone hates - taxes. As a result, we need somewhat extraordinary measures to get tax money back from these people. They prospered using systems put in place by tax paying citizens (roads, airspace, internet lines, medical services, etc), and they should pay their fair share. It's not about being robinhood, to me it's simply about getting what is owed for the services they received (a more inflammatory argument can be made that Bezos and the Waltons in particular profit by leveraging social services to cover the delta between what they pay their warehouse workers, and what a working wage actually would be).
Capital is another form of property and once you've got it, as long as you got it legally, you can do with what you will. So if you want to will it to your kids, then it will be legally theirs and they should not be penalised because they didn't work for it. Income is taxed and its widely accepted that the more you earn, the higher the tax rate you will pay. Same should apply to persons drawing from capital: they have to live on something and this should be taxed. But what you own is yours for your life and any decent form of government should uphold ownership rights. Wealth inequality is a spurious statistic made to appeal to politicians. Its the converse of that other BS, "relative poverty".