Don't Tax Assets

Taxes on assets would be very bad for the economy. If Bill Gates, whose wealth is mostly Microsoft stock, has to pay a tax on assets, he has to sell Microsoft stock every year to find money for the government. I don't see what kind of social justice requires him to gradually sell off a company he founded to fund government. Plus the better the company does, the more of it he has to get rid of, which is a kind of perverse disincentive! And of course, if the stock drops, it's not like the government is going to give him his money back.

As a practical matter, companies and rich individuals can and will move out of the U.S. under high tax regimes. From what I read, we're already losing some of them because of Sarbanes-Oxley and higher corporate taxes than in other parts of the world. It will be interesting to see if flat taxes spread out of eastern Europe into the rest of the EU. There's already a lot of griping in the EU about "unfair tax competition", so they've definitely noticed the effects. After all, if the flat tax were hurting the people who've tried it, they would drop it, not be criticized for "unfair" competition.

At a more ordinary level, I'm sure you've noticed that the lifetime property taxes on your house add up to a fair percentage of the purchase price. Do you really think local government deserves that money? Or that an income tax wouldn't be more fair? There really are a lot of people with expensive houses and low income. Should they be carrying a disproportional share of the load? In states without Prop 13 limit on property taxes, the situation has got to be even worse.

BTW, I don't think Ron Paul qualifies as an extreme Libertarian. He's a moderate one.... :-) Unfortunately, Libertarians have too much contempt for politics to ever find anyone electable as President.

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