“But I don’t pay any… I’m Not Rich” you say… Nay, Nay, Fluffay!!… everyone pays Wealth Taxes. Lets start with a definition of what a “Wealth Tax” is:

Tax levied and collected on the Value of Assets of any type, either Income Producing or Non-Income Producing, that you are obligated to pay for no other reason than your ownership of them and that continues to re-occur on a set time interval.

For further clarification on the discussion ANY monies collected by any government entity are considered “Tax”… irrespective of what they are called… a “fee” is still a tax.

There are only a few nations left that collect a Wealth Tax and still have the cojones to call it that… France being the the most visible… their tax is actually called the “Solidarity Tax on Wealth” and it’s triggered at a net asset value of below Euro 800,000.

In the United States, though, using the label “Wealth Tax” would get any politician lynched so they use a whole slew of other names for them. Yes, there are quite of few of them! While many of them are considered “good” taxes and necessary for people to pay, irrespective of what the money is ultimately used for, they are still in the end result taxes on wealth.

The first and foremost that the most all people pay is one called “Property Tax” and even people who don’t actually hold title to a piece of Real Estate pay it through higher rents… the landlord just being the conduit from the renters pocket to the Governments.

“Documentary Stamp Taxes” on the financing contracts fall under the Property Tax label as well.

The next most prevalent are those that deal with the ownership of a Motor Vehicle.

License Plates are a form of Wealth Tax as in almost all states the cost is based on either the size of the vehicle (weight~Florida, and generally the more it weighs the more valuable it is) and in a number of states you pay “Tangible Personal Property Tax” based on the current value of the vehicle. Ergo the more Valuable the vehicle you own the more you pay… Do I smell wolf under Bo Peep’s dress?

The cost of a Drivers License falls under this category as well since if you can’t afford (or don’t want) a car you technically don’t need a license. And don’t forget state mandated “fees” on the disposal of vehicle batteries and old tires as well… you only pay them if you own them. (Federal Excise Taxes on tires and batteries and a number of other things fall into the Wealth Tax category as well.)

You could go so far as to add tolls paid on Toll Roads as well. No Car = No Tolls.

A number of states have what are called “Tangible Personal Property Tax” and “Intangible Personal Property Tax”.

In many states the Tangible Personal Property Tax is assessed mainly against the assets of Businesses (though see above about Personal Vehicles) from your equipment down to the chair you sit in… a business that requires a heavy capital outlay in equipment pays more money that is passed on to you the customer in the form of Higher Prices. Home Based Businesses are not exempt from it either.

Intangible Personal Property Tax is normally assessed on the value of Financial Instruments… Stocks, Bonds, Promissory Notes, etc. though Certificates of Deposit and Bank Accounts are notably absent from the list in almost all jurisdictions… Thank the Bankers Lobby for that.

Further on the State Level while Income Tax is not a tax on what you actually own there are Two States that have, in effect, a Wealth Tax. They are New Hampshire and Tennessee… breaks my heart too… my family is originally from New Hampshire and I entertained Ideas of moving back when I originally retired.

Neither state has a Personal Income Tax EXCEPT one levied on Dividend and Interest Income. This is effectively a Wealth Tax as only those who have saved their money and own sufficient “Intangible Property” will cross the threshold levels

In Tennessee Interest and Dividend income is taxed at 6% above a threshold of $1250 single/$2500 joint and New Hampshire levies 5% on Interest and Dividend income that exceeds $2400 single/$4800 joint.

All you need is to come up with CD’s worth $48,000 in New Hampshire or $25,000 in Tennessee earning 5% to become subject to tax.

Way to go guys… drive off all the well-to-do retirees who get their income from Interest and Dividends that might have been looking at your states as great places to retire.

On the Federal Level there aren’t really any Wealth Taxes that meet the definition of recurring or are applied directly to individuals… though there are plenty of others that can be argued as being such forms of taxes that generally flow through to you as the end buyer if goods and services… “Universal Service Fund” fee on your phone bill is an example as is the Annual Heavy Vehicle Excise Tax (commonly called 2290 after the IRS form number) that has to be paid on all Diesel powered vehicles over a certain weight regardless of how old the vehicle is… currently $550 per year on a Road Tractor… you own it, you pay it… No Payee, No Taggee. Pass on to the Grocery Store as Part of Delivery costs.

So what other things do you think you pay that can be construed as a “Wealth Tax”?

Photo credit: stock.xchng.