The Great Divergence

[Maitre]

[snip]

Now, if only we might convince the IRS to tax us at a flat rate according to net worth, . . .

Thereby discouraging investing or saving. Rent your house, don't buy it. Buying it adds to your net worth. Buy that bottle of hundred year old cognac -- that'll reduce your net worth by a couple of hundred. Don't start your own business, that becomes part of your net worth. Work for somebody else, let him pay the taxes.

[snip]
--Pete

Actually Pete, I'm not so sure that renting would be the way to go. I think the way to go would be my personal situation: buy a home at the peak of the housing market, then watch your home value disappear while the debt you incurred to get it doesn't. Now you "own" your home and pay your property taxes, but you're net worth is barely positive because your primary asset isn't currently worth what you paid for it. Oh, and nobody's likely to help you out because you actually manage to pay your bills on time every month and have something in the bank at the end.

I'm starting to like this idea of taxation based on net worth. Maybe I should go about getting more debt to cancel the assets I do have. Oh, no, better idea: go out and get some student loan debt so I can increase my earning potential without increasing my taxation, because all my new income will by cancelled by the debt I incurred to get it.

If I can generate enough negative net worth, would I then get a rebate check instead of a tax bill?

[In case I'm being too obtuse here: government policies should NOT ENCOURAGE DEBT ACCRUAL. Don't give undisciplined people a reason to flaunt their spending. It takes a lot of energy to try and do it the right way, and even when you do, it may not work out. Don't offer bad shortcuts to those who aren't looking at what's in the other hand of the person helping them up.]