wealth tax

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Wealth Tax

A tax levied on a person's or company's net assets, as opposed to income. For example, if a person has a net worth of $1 million, the government may assess a wealth tax on this amount over and above the tax on that person's income. Proponents believe this tax promotes equality while critics maintain it discourages accumulation of wealth, which is thought to drive economic growth.
Wealthclick for a larger image
Fig. 89 Wealth. The distribution of marketable wealth in the UK, 2002. The total includes land and dwellings (net of mortgage debt), stocks and shares, bank and building society deposits and other financial assets, but excludes life assurance and pensions. (Source: Social Trends, 2004).

wealth tax

a DIRECT TAX imposed by the government on a person's private assets when those assets are transferred to the person's beneficiaries. Wealth taxes are used by governments principally as a means of promoting social equity by reducing disparities in WEALTH holdings. In the UK INHERITANCE TAX is the current means of taxing wealth.

wealth tax

a TAX levied on a person's private ASSETS when those assets are transferred to the person's beneficiaries. Wealth taxes can be used to redistribute WEALTH within the community as part of government policy on INCOME DISTRIBUTION. The UK's wealth tax has taken various forms over the years, notably estate duties, capital transfer tax and (currently) inheritance tax.

Currently (as at 2005/06) ‘chargeable assets’, such as houses, stocks and shares up to a ‘threshold’ value of £275,000, are tax-exempt. Above £275,000, inheritance tax is levied at a flat rate of 40%. Assets transferred more than seven years before the donor's death are exempt from tax, while assets transferred between three and seven years before death are taxed at a lower rate.

References in periodicals archive ?
The net worth tax I am calling for, which would take a much larger bite and would be aimed at only the wealthiest 2 percent of the population, could cut the deficit by more than $1 trillion.
A net worth tax would recapture some of the money that went to the rich--a kind of reverse refund.
There are some problems that must be solved before a net worth tax could be implemented.
In other words, it would require the current holders of government bonds to exchange them for the stock or the real estate taken in the net worth tax.
This invalidates several state laws that imply that nonphysical presence establishes nexus with a state, such as Pennsylvania's net worth tax and California's franchise tax.
Benefits of the proposed JOBS legislation include: elimination of the outdated net worth tax, a 50 percent reduction of the capital gains tax for all Georgia taxpayers, a quarterly credit towards unemployment insurance tax, and an income tax credit of up to 50 percent of an investment made in small or start-up Georgia businesses with 20 or fewer employees.
The new business privilege tax is a net worth tax imposed on corporations, limited liability entities and disregarded entities (as defined under the new law).
The annual shares tax, which applies only to corporations, is substantially different from the shares tax previously applicable to Alabama corporations; essentially, it is an apportioned net worth tax.
However, in the future, if the tax based on income is higher than the net worth tax, the entire Ohio tax is required to be added back in determining Virginia taxable income.