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I keep reading (John Mauldin, etc..) that the Gov (state and fed) will need to pay for all the public pension obligations coming due and one idea that has been mentioned is a "wealth tax". Tax the wealthy.

I don't see any wealth tax hitting home values (i.e. if you have a high value home, I don't think the Gov would expect people to sell their homes to pay for the wealth tax). I see bank accounts, money market funds, etc.. (liquid assets) being hit. Wealth were the tax payment can be made fast. I understand that this was done by the Italian government to their citizens some years ago.

My question is this - assuming that hard assets are not hit (homes, cars), could buying gold bars be considered a hard asset and remain protected ?

IE - buy $100K in gold bars and no matter what the wealth tax could be on liquid assets, the value of the gold bars will remain untouched since they are considered as "not liquid". (Assuming gold remained at a constant price). Almost like if a person owned a $1M boat. That is not considered as part of their wealth and could not be expected to liquidate fast.

Any issue with purchasing such large amount of gold ?

Thanks for any input/thoughts.
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My question is this - assuming that hard assets are not hit (homes, cars), could buying gold bars be considered a hard asset and remain protected ?

IE - buy $100K in gold bars and no matter what the wealth tax could be on liquid assets, the value of the gold bars will remain untouched since they are considered as "not liquid". (Assuming gold remained at a constant price). Almost like if a person owned a $1M boat. That is not considered as part of their wealth and could not be expected to liquidate fast.

</snip>


Assuming "hard assets" would be excluded is a pretty big assumption. If we did a "wealth tax", it would probably cover the same items as the current "estate tax" -- which includes "gold bars" and $1 million boats.

intercst
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" I keep reading (John Mauldin, etc..) that the Gov (state and fed) will need to pay for all the public pension obligations coming due and one idea that has been mentioned is a "wealth tax". Tax the wealthy.

Thanks for any input/thoughts. "

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Stay calm and stay nimble. Moving can always be an option.

Howie52
The PBGC would not exist if there really were a guaranteed pension.
Somehow or other - there will more likely be an overall tax increase
at the state and/or local level or a sales tax "surcharge" specific to
"pension reform".
For "pension reform" you might read "pension robbery".
Not all "Promissory Notes" end up being paid and "government" generally
feels itself exempt from laws until "pushed".
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I don't see any wealth tax hitting home values

I don't know about home values, but NJ has what they call a McMansion Tax. When you sell, the state collects taxes in addition to income taxes on gains over a modest sum.

Hence, you are trapped paying higher taxes. You can declare residency in another state (as with a winter home in Florida) to avoid state income tax, but if you own real estate they still get you.
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I keep reading (John Mauldin, etc..) that the Gov (state and fed) will need to pay for all the public pension obligations coming due and one idea that has been mentioned is a "wealth tax". Tax the wealthy.

A federal wealth tax would require changing the Constitution. That's almost impossible even for things that are relatively popular.
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Hence, you are trapped paying higher taxes. You can declare residency in another state (as with a winter home in Florida) to avoid state income tax, but if you own real estate they still get you.

I'm glad I never bought a house back when I lived in NJ. And I'm even gladder that I moved out after Florio put them on their current path of destruction!
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I keep reading (John Mauldin, etc..) that the Gov (state and fed) will need to pay for all the public pension obligations coming due and one idea that has been mentioned is a "wealth tax". Tax the wealthy.

1. Mauldin is a crank.

2. You have to tax the wealthy, that’s where the money is.

3. It is extremely difficult to (successfully) administer an assets tax, people will find a way to evade/avoid it, as you are thinking about doing. Imagine if you had *real* assets, like the Koch’s or whoever. It’s easy to tax transactions, like home sales, personal income from an employer, and so on because there’s a record (ignoring the small amount of underground economy). It’s very hard to total up how many boats and cars, not to mention antiques, furniture, art, gold bars in safe deposit boxes and so on that somebody owns. I’m not saying it’s impossible, just that its inefficient, prone to government snooping in private lives, and easy to dodge.

4. It’s not Constitutionally enabled, so there’s that.

5. Mauldin is a crank. There are far bigger worries about taxation that this.
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Hmmmm, . . . Taxes, wealth taxes; another "First World" concern.



sunray
a man paying taxes & collecting Palindromes since the previous century
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after Florio put them on their current path of destruction!

I think it was really the state supreme court that is the cause of much of the problem. Florio misinterpreted public support for his efforts to comply with the court decision. And that cost him his political career.

Others have muddled through. I think we expected Jon Corzine to work some magic given his background in finance at Goldman Sachs. But looks like the votes in the state legislature he needed were not there.

One day the bill will come due. Who will pay it?
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It is extremely difficult to (successfully) administer an assets tax, people will find a way to evade/avoid it, as you are thinking about doing. Imagine if you had *real* assets, like the Koch’s or whoever.

Keep in mind that after hyperinflation wiped out the purchasing power of the German currency in the 1920s, they refinanced using the value of real estate.

That would seem to suggest that any real estate you own has multiple layers to it. One owned by the state and one owned by the feds in addition to your personal ownership.

Yes, constitutional changes may be needed to tap those other layers, but when push comes to shove (and the alternative is economic chaos) those changes may not be so difficult to imagine.
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Sunrayman: a man paying taxes & collecting Palindromes since the previous century

Heh. Haven't seen anyone collect a palindrome in several years.

CNC
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Haven't seen anyone collect a palindrome in several years.


+++
+++



They're STILL non-taxable!
{Shussss, don't tell the IRS}

sunray

;-)
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One day the bill will come due. Who will pay it?

Well, it'll start with the people of NJ. They've been voting for people who prefer to spend the tax money on civil service benefits/pensions over other things. And if that's what they've chosen, then that's what they will pay for. Normally, I would say that eventually the feds would bail them out one way or another, but that might take a long time. And because there may be more than one state (NJ, IL, etc) that needs bailing out at roughly the same time, it might be difficult to get political support to do so. I'm not sure if the people of CA and NY will be willing to bail out NJ and IL. We shall see.
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it'll start with the people of NJ.

I think the NJ problem comes mostly from a strong blue state coalition that has an iron clad grip on state politics. They have to screw up pretty badly to get kicked out of office. Its a coalition of liberals, unions, and inner city minorities. The unions provide vans to get the vote out on election day. When you go to a political meeting, its usually the Dems splitting up the public pie. Cronyism. Politicians who get credit for a full years service in the state pension plans by working at a contract for $1000. Easy to work last few years at full pay to get full pension. Lots of mayors and political bosses who double dip by also serving on state legislature. Tax payers/voters do not have a prayer. They are caught in a cage.

eventually the feds would bail them out one way or another

Detroit, Harrisburg, PA, and now Puerto Rico all provide a guide for what might be possible. I don't think the feds put up lots of money. Mostly they required strict austerity. And its bond holders who took it on the chin.

If we use the auto industry as an example, the feds offered loans, but the loans had to be repaid.

I doubt the blue states are powerful enough in Congress to make major bailouts possible. The red states will hold out for austerity first.
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Gold has never been a good investment, historically. It’s hard to liquidate and it doesn’t grow as well as a diversified portfolio. Unless you’re qualified to test for volume and purity you could be dropping a fortune on gold covered lead bars. Color me unimpressed. Doomsday prophets hawking gold on TV are sharks in search of suckers....

My portfolio is cash, low fee index funds, tax free municipal bonds (tax free! There’s some key words) and good old fashioned investment real estate, a great hedge for inflation and an income generator as people always need a place to live.

I do have some gold. It’s very pretty and hangs around my neck and fingers but I don’t expect it to buy dinner....
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