Modeling a Wealth Tax
This is simplistic to the point of absurdity, and doesn&#x27;t model how any sensible wealth tax would be implemented or paid.<p>First, any wealth tax being seriously discussed has a floor and&#x2F;or has marginal rates, probably starting at 1 or 5 or 10 million (or higher).<p>Second, taxes don&#x27;t disappear into nothingness - they pay for civilization. It is clearly beneficial to everyone to live in a society where people are well cared for and have healthcare, public education, welfare, etc. There&#x27;s a reason failed states and unstable&#x2F;developing countries generally aren&#x27;t where people are looking to startup the next big tech company.<p>Third, any smart founder isn&#x27;t going to just sell 1% of their stock every year and pay the wealth tax with that. They&#x27;ll take dividends, or take out a loan against the value of the stock, or use some cash from other investments, or whatever, and maintain control of their company. Yes, over the long term they&#x27;ll lose some wealth, but not necessarily control of their company, unless that&#x27;s the decision they make.<p>Fourth, this effectively ignores that wealth is a thing that grows and compounds. If your wealth is increasing at 4% a year (very attainable for the class of people a wealth tax would affect) a 1% wealth tax really doesn&#x27;t have as big an impact on your long term wealth as this makes it seem.<p>Fifth, the idea that people &quot;will just move to another country&quot; is very silly. If some people do leave, or start companies only in other jurisdictions, that just means there&#x27;s a market opportunity for the many people who remain. Unless this supposes that no one wants to take advantage of one of the richest markets in the world because they <i>might</i> have to pay <i>a small fraction</i> of their wealth to the government. Not to mention that even very wealthy people likely want to live in a good society - we don&#x27;t see many people starting companies on boats in international waters for a number of reasons (left to the reader).<p>I suspect that Mr. Graham is wringing his hands over potentially having to cut a large (in absolute terms, but small in relative ones) cheque to the government in the future, and I certainly feel for him, but I&#x27;d much rather we have well funded schools and welfare for those who need it.