Global wealth disclosure as a step toward redistribution

2018-12-05

in Economics, Law, Politics

It’s a fantasy to imagine that today’s governments would confront the wealthy in this way, but it’s nonetheless of some value to think about some of the barriers to major global redistribution and potential means through which they might be surmounted.

As with other major global challenges like nuclear proliferation there is a coordination problem in establishing more redistributive policies. People say that if one country starts taxing wealth, or land, or otherwise working to rebalance income and wealth across their society, those with the most will simply move elsewhere, either physically or legally for tax purposes.

As a preliminary step, there may be some value is simply compelling ‘high net worth’ individuals to disclose their worldwide financial dealings to any country where they want major government benefits, from the protection of their intellectual property to government contracts and support for their businesses. Remember that private property is a fiction that governments choose to uphold, not a fact of the universe or something that individuals can meaningfully assert for themselves. Every major country could agree on a financial disclosure standard that is (a) intended to capture a person’s economic activity all over the world and (b) designed to overcome deliberate obfuscation through corporations, trusts, and other legal mechanisms which can conceal who owns and benefits from what.

Governments have many potential levers to compel compliance, from visa rules to the tax system, and it’s especially plausible that the rich would comply if most appealing jurisdictions to live in acted simultaneously: say, the EU (including poor muddled Britain), the US and Canada, Japan and China, Australia and New Zealand, and a few others to start with. Doubtless such a reporting obligation would drive a flurry of new consulting activity to help rich people avoid it or minimize what they disclose, but it would nonetheless be a step toward transparency and an important reminder that even those with the freedom to travel and live wherever they like ultimately derive much of their wealth from countries with capable bureaucracies and that they aren’t immune from the sovereignty of those states.

{ 3 comments… read them below or add one }

. December 5, 2018 at 11:55 am

French government reconsiders wealth tax as protests intensify

Solidarity tax on wealth may be reimposed amid widening gilets jaunes movement

. December 5, 2018 at 11:56 am
anon December 5, 2018 at 7:18 pm

Another stick that could be used to encourage compliance would be saying that all undeclared assets can be seized by whichever state they’re in.

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