Taxing the Rich Is Impossible
Hating on billionaires seems to have become something common nowadays. However, public discourse is incapable of moving past the fantasy idea of taxing the rich.
Sorry to break it down to you folks, but we probably have no way of effectively doing this.
Why? Well, billionaires keep their wealth in stocks, bonds, and other investment instruments. They never cash out on the growth, instead going for something much smarter: borrowing.
They use their portfolios as collateral to borrow huge sums of money, simply because bank interest rates are lower than what they would pay in tax.
How do you go about taxing them, then? Do you tax borrowed money? Or maybe you want to tax unrealized gains?
Well, taxing borrowed money would mean that you would also get taxed when taking out a mortgage or equity on the house. Taxing unrealized gains means that any investment drive for the lower class will be buried under bureaucracy and taxes, only enlarging the wealth gap.
But that’s not it. Even after introducing these taxes, the rich can still find ways to avoid them. The state, the laws, and the legislative system is also based on capital, and it knowingly includes loopholes for the wealthiest to abuse.
Just like a Hydra: when you cut one head off, two more spring back up.
And even if we manage to somehow do it, the money will be left to the state, perhaps the largest, most corrupt business in all of capitalism. If you ask me, I would say that nothing had changed in this transfer.
The problem is not being unable to tax the rich. The problem is thinking that this measure alone can solve wealth inequality.
Without systemic change, we will have accomplished nothing.