OK, so let’s nick all the money off Elon Musk then

Now that Elon’s apparently worth three quarters of a trillion obviously there are those insisting we should just take that off him and with that we can do such things. Say, and just to pick one of those saying that:

That could house every homeless person in America. Permanently. With change.

Erase all medial debt in the USA. With change.

Provide clean drinking water for the whole world.

End global poverty. For years.

Ensure every child worldwide has education.

Let us just pretend that those things could be done with that sum. Just so that we can explore the logic.

The thing is that we can’t take that sum off Elon. On the obvious basis that he’s not got it. What he has is share certificates which apparently have that value. So, OK, we demand taxes on some or all of that pile of share certificates. Elon then has to sell some shares to pay the taxes. Elon’s wealth goes down, tax revenue happens, things can be then done with the money.

At which point victory to be declared? Well, no. Because someone has had to buy those shares in order to produce that money that is then paid in tax. So, money from somewhere else in the economy has moved into that pile of share certificates. The money that’s been paid in tax hasn’t, in fact, come from Elon, it’s come from those who have bought the shares.

That money that was used to buy the shares has come from somewhere else of course. Where, if it wasn’t used to buy shares it could have been used to build housing, end medical (sic) debt, cure global poverty and so on. We could also have taxed that money elsewhere in order to fund those things.

Taxing a pile of share certificates doesn’t, in fact, produce any more money to do things with. It also most certainly doesn’t produce more real resources we can then do things with.

Taxing Elon might be a convenient place to tax, might be an easy place to gain public acceptance for taxation. Might even be an easy to whip up the madding crowd method. But taxing wealth in this manner does not, in fact, produce any more money. By definition, however much is squeezed out of Elon’s pile of share certificates must have been put into those same share certificates by someone else. Because the taxes to be paid must come from someone buying the shares off Elon. At the end of the process we’ve the same amount of money/wealth tied up in those share certificates as we started with. We’ve not liberated anything with which we can do such things.

There are other arguments of course. But this one is still true. Changing who owns assets doesn’t liberate either money or resources to do other things with.

Tim Worstall