Why do we not tax the very wealthy? Say above 10 million

I often write on Quora.com, where I am the most viewed writer on financial matters, with over 488.2 million views in recent years.

In the answers below I focused on the following topics and issues:

• Why do we not tax the very wealthy? Say above 10 million
• Should we have an excess corporate profit tax?
• What are some realistic ways to get rich in 5 to 7 years?

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Why do we not tax the very wealthy? Say above 10 million

I will be unusually succinct.

A picture tells a thousand words.

It should be obvious why an appreciation or fluctuation tax on unrealised gains doesn’t make sense, when capital gains and dividends are already taxable.

What are some realistic ways to get rich in 5 to 7 years?

This quote says it all:

There are plenty of people who get rich quick on the surface, but when you look into it, it is usually because of previous work.

Some examples:

1. Sports and entertainment stars. Many start getting rich at 18-22. Few make it in these industries, but the ones that do, make a lot. Yet most started practicing at age 5 or 10, and didn’t make any money pursuing this when they were students
2. Start-up workers. Some workers in Silicon Valley and beyond get paid in stock options. Few firms make it to IPO. For those that do, even fairly average IT engineers can make millions. Yet many of those people studied for 3-4 years and then had to wait much longer to get the pay out.
3. You might think that these two examples aren’t realistic for most people. The more realistic way to get rich quickly is to start your own business in an area where you already have experience. If you are a dentist, you could make it big if you get the model right in your own dental practice, within a few years. The same with most industries. Again though, most of the people who make great money within a few years of starting their own business had 5-10 years of experience “in the field”

One of the first lessons I got concerning the latter point was when I was a student and volunteering overseas during the summer holidays.

One of the participants made great money working for a firm. He had a low salary and high commissions.

He started his own business and made really great money even in year one, after he took many of the clients from his previous employer.

He agreed to pay a one-off lump sum to his previous employer to avoid a court case as the contract had such a clause.

Despite the hefty upfront payment, he made money as he was building on what he had created for his previous boss. The clients trusted him and joined him, and he then scaled the business quickly.

Of course, luck can sometimes change these dynamics, but it isn’t realistic to rely on that.

What is also important to know is that many of the people who get sustainable wealthy don’t chase money in all circumstances and are happy to get rich slowly as well, if that is what it takes.

Should we have an excess corporate profit tax?

Thanks for the question.

I think it would make no sense, and will discourage investment.

The only exception is if there is a strong case of corruption. Let’s say it is proven that an arms company, or oil & gas firm, has actually campaigned for a war to increase profits, then I can understand it more.

Ultimately, Bezos and Amazon didn’t campaign for lock down and there is no evidence that any oil & gas companies encouraged the war in Ukraine.

Yes, they benefited from luck, but that is how business works. Sometimes firms gain, or lose, due to randomness or luck.

Breaking up bigger companies for competition (anti-trust) is a better way of dealing with occasions when monopolies form, and they take advantage of that.

It is clearly wrong, for example, if you have just one or two firms in an industry for an essential good, and they take advantage of that.