[PEN-L:4844] Re: Asset tax

[Jim Devine <JNDF%LMUACAD.BITNET@xxxxxxxxxxxxxxxxx>]

One worry about a 3% asset tax:

Suppose that the after-tax rate of profit on asset-ownership is
currently 10% in the US and 10% in the rest of the world.

Now, the tax is imposed. Wouldn't the movement of assets
and changes in the amount of investment eventually lead to
a situation where the after-tax rate of profit on asset-ownership
in the US would return to 10%, so that the pre-tax rate of
profit would rise by 3 percentage points? (some of the
smaller asset-holders might be driven out of business in
the process, BTW)

In a less arithmetic way, this can be stated as saying that
the capitalists have a tremendous amount of social power.
If they're taxed by the state, they can tax society (specifically
the working class) to compensate, no?

This assumes that capital would allow such a tax to go through
in the first place. The bosses would not look kindly on the
transition period, no matter how pleasant the final result.

in pen-l solidarity,

Jim Devine
jndf@xxxxxxxxxxxxxx or jdevine@xxxxxxxxxxxxxxx
Econ. Dept., Loyola Marymount Univ., Los Angeles, CA 90045-2699 USA
310/338-2948 (daytime, during workweek); FAX: 310/338-1950
"Segui il tuo corso, e lascia dir le genti." (Go your own way
and let people talk.) -- K. Marx, paraphrasing Dante A.