Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Usually wealth taxes don't appropriate the wealth (apart from transfers to other people such as in the case of inheritance), they are levied over the increase in wealth that is over the increase in wealth for which the owner did no work.

The family enterprise inheritance issue is often overstated but certainly an issue. There are really two issues. On the one had is the child contining the buisiness or just cashing out? After all, inheriting and then selling it off is no different from directly inheriting a large sum of money and should be taxed accordingly. On the other hand there is the size. The child of a farmer or baker should be able to take over their parents business without going into large debt, but why should for example the Waltons have  control over a gigantic corporation with all the political power that entails purely by virtue of their parent/grandparent?  

by Anspen on Fri Jan 20th, 2012 at 09:31:40 AM EST
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sorry, under wealth tax I understand taxing wealth, not the increase in wealth. Taxing an increase in wealth is OK because when wealth increased this is usually an income although it sometimes a bit tricky to do. Appreciation of real estate is, of course, a bit tricky to tax until it is sold (at which point I would tax it) or until the rent is increased (which is already taxed).

Re the business issue, as I said, there are many easy solutions to that, but they just have to makes sure it doesn't kill the small compnies. If they are big and especially if they are listed on an exchange it's relatively easy...

by crankykarsten (cranky (where?) gmx dot organisation) on Fri Jan 20th, 2012 at 09:44:40 AM EST
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Taxing real estate when sold, as Prop. 11 in California has demonstrated, is a way to transfer the tax burden from corporations (who transfer without selling) to individuals. Is this really what you have in mind?
by gk (gk (gk quattro due due sette @gmail.com)) on Fri Jan 20th, 2012 at 09:51:03 AM EST
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I have not clue whatsoever about a weird law in a crazy state in a faraway country :-))

Very generally, it should not matter if an individual or a company sells something, it should be taxed regardless.

Out of curiosity, if a company in California sells a real estate to another company it is called transfer and not taxed??? That is so nuts I don't know where to begin with, my brain hurst to much trying to understand the reason for that law...

by crankykarsten (cranky (where?) gmx dot organisation) on Fri Jan 20th, 2012 at 09:57:28 AM EST
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my brain hurst to much trying to understand the reason for that law

To allow corporations to not pay taxes, thereby allowing owners of corporations to accrue wealth without paying taxes?

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Fri Jan 20th, 2012 at 10:38:50 AM EST
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Oh yeah, it's weird and crazy out here, but that's because of immigrants from the upper 48. We don't have any border controls east and north.

The way it works is, that corporations are persons, but very special kinds of persons, persons who can split themselves up into parts and sell the parts off, so while the corporation never sells the property to cause a taxable event, the corporation itself is constantly being bought and sold.

This simple fact was not made clear to the voters who gave us Prop 13.  Maybe smoke and mirrors got in their eyes. They of course replied, something deep inside, cannot be denied.

by greatferm (greatferm-at-email.com) on Fri Jan 20th, 2012 at 01:29:08 PM EST
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The French wealth tax excludes the company you own and work in from the taxable base, which avoids that problem.

Wind power
by Jerome a Paris (etg@eurotrib.com) on Fri Jan 20th, 2012 at 11:09:17 AM EST
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