Wealth tax: The time to tax wealth is with estate tax. Have a generous exclusion to help kick-start the next generation, pass on family farms and small business, etc. (all part of the "The American Dream") and then substantial tax (35%-50%) on the rest without non-charity loopholes to avoid it. Don't allow family trusts. A generous exclusion would be something like $10 million, indexed to inflation.

Fraud: The US has been writing the laws over the past several decades to make fraud difficult to prosecute, particularly require "intent" to be proven. If you avoid writing e-mails and texts telling co-workers that you are planning to commit fraud, it is difficult to prove. There has also been institutional hesitancy to even investigate it. So no fraud prosecutions came out of the 2000s housing debacle and subsequent financial crisis (Madoff actually turned himself in because his fund was collapsing under its own weight and there was no potential for it not to be fraud). They struggled to get Enron and Theranos prosecuted. Rich person tax fraud is rarely audited and prosecuted because the tax code is so complicated and then you have to show "intent". It is good to see that they are starting to go after some of the Covid PPP fraud. If people get investigated and prosecuted for fraud, there will be less of it.

Labor: Despite a reduction in labor force participation rates, the number of people employed in the US has quietly risen to all time highs. in the 2022 Q4. https://fred.stlouisfed.org/series/CE16OV

I think the bigger issue is that many US employers are reluctant to offer full-time work due to extra benefit costs. They are reluctantly raising hourly wages because competition for labor is forcing that. Labor participation rate is still down at late 1970s levels, so employers are still not making employment attractive enough to pull people from the sidelines.

The fact that employers are still complaining about labor shortages despite the greatest number of people employed in US history indicates that the economy is still "hot". I think 2023 is when labor costs, desire to maintain revenue despite rising labor costs, number of employed (I think more important statistic than unemployment rate), and interest rate costs to companies are going to be an intricate dance with economic, financial, and stock market implications.

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“..debate about wealth taxes, which hasn’t stopped seven states from floating bills to increase taxes on wealth. This is still a terrible idea. It is the most inefficient of all taxes, which means more distortions and less growth. The rates that states are proposing (on top of federal capital gains taxes) reduce the return on risky investments to a hair above the risk-free rate.”

Could you please provide link where I might find detail as to your determination of the resultant risky investment returns?

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High tax rates on wealth didn't discourage the post WWII economy, it might have even helped--businesses reinvest profits to grow instead of buying ridiculously large yachts.

One other thing---as taxes have been lowered for the wealthy over the decades (Reagan, Bush tax cuts, Trump tax cuts, etc.) the deficit has spiraled upward, now going parabolic.

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