Thanks for posting the PG wealth tax article. It is a highly flawed analysis.
First wealth appreciates over time. So if your wealth appreciates at 15% / year, and the govt. taxes it at 1%, the net effect is growth rate is slowed to 14%. With these assumptions, someone starting with $1mm in wealth ends up with $2.6 billion after 60 years!
Second - PG ignores that most wealth tax proposals have a high minimum wealth - in the $50mm range. So there is no early compounding of the tax. Adding this into the model, the wealthy founder ends up with $3.3 billion after 60 years.
With no wealth tax, this hypothetical founder ends up with $4.3 billion. So, yes the government has taxed a total of ~ 25% over 60 years, but the founder ends up quite wealthy.
First wealth appreciates over time. So if your wealth appreciates at 15% / year, and the govt. taxes it at 1%, the net effect is growth rate is slowed to 14%. With these assumptions, someone starting with $1mm in wealth ends up with $2.6 billion after 60 years!
Second - PG ignores that most wealth tax proposals have a high minimum wealth - in the $50mm range. So there is no early compounding of the tax. Adding this into the model, the wealthy founder ends up with $3.3 billion after 60 years.
With no wealth tax, this hypothetical founder ends up with $4.3 billion. So, yes the government has taxed a total of ~ 25% over 60 years, but the founder ends up quite wealthy.