[PEN-L:4884] asset tax

[ROSSERJB@xxxxxxxxxxxxxxxx]

     Mike Meeropol is certainly correct that
a minimum bracket moderates potential regressivity
of an asset tax, although Bruce McFarling's point
(and mine) remains well taken and unanswered.
     Paul Cockshott legitimately asks what happens
when intangible assets are included.  There is no
simple answer, but I think it is worth realizing
that what is being proposed is very similar to the
Islamic _zakat_, one of the "five pillars of Islam."
Zakat in the _Qur'an_ is theoretically a voluntary
charitable almsgiving which is 2.5% per year of one's
wealth.  The _Qur'an_ (Muhammed was a merchant) lists
specific assets to be counted (not land) but including
gold and silver, the "money" of the day.  Modern Islamic
economists have updated the list to include stocks,
bonds, and other assets not existing in the 7th century.
     In modern practice fundamentalist Sunni Islamic states
such as Pakistan and Sudan impose zakat as a tax (Shi'i
Iran does not), the fiscal base of the Islamic state.  In
this regard, at least one study shows little positive
impact on income distribution, Faiz Mohammed, "Prospects
of Poverty Eradication Through the Existing Zakat System
in Pakistan," _Pakistan Development Review_, 1991, vol. 30,
pp. 1119-1129.  For more on this see the forthcoming book
due out this fall from Irwin by me and Marina V. Rosser,
_Comparative Economics in a Transforming World Economy_.
Barkley Rosser
James Madison University