Don’t wait for billionaires to sell their stock. Tax their riches now(washingtonpost.com) |
Don’t wait for billionaires to sell their stock. Tax their riches now(washingtonpost.com) |
You can't (IMO) reasonably ask someone to pay a cash tax based on a notional value for a transaction that never happened as that notional value will not account for the inevitable execution slippage that will happen if the shares are actually sold later. Let the government eat that slippage.
I think the people should not ask, nor accept equity payment as taxation.
I also think that taxation should only be on income. Wealth tax doesn't work well, and only hurts those who would use that wealth to produce more wealth (to the detriment of all). Taxing consumption is the best, but that's a little regressive, so taxing income is the next best thing.
As a matter of historical fact, governments do sometimes take equity in something, in exchange for what's owed. Like with the financial crisis bailouts.
It's a normal thing among and between capitalists, but also when the government interacts with them. I'm unclear on what principle would forbid it, when you start from the assumption that it's normal, rather than unheard of.
they are getting loans using their unrealized capital gains as collateral. And these loans are not interest free, and would have to be paid back at some point in the future. And in order to pay the interest on the loan, they will have to realize _some_ gains as income. So that gets taxed.
Is it better that these billionaires don't obtain their mansions and yachts, or that they do and don't get taxed?
Not sure if it actually works well or is overly complex nowadays.
You're taxing people of what other people think the company is worth, not on what the company has.
A good example would be McDonald's, its got a 170 billion market cap, but if you were to liquidate the company it would still owe money to creditors and shareholders would get zero
If you let people pay taxes in assets then demand for dollars would drop, and that’s a big source of American soft power.
As a business it’s really not that much more complex. Add VAT to all the invoices you send out. Keep track of how much was charged to you by your suppliers. Pay the difference to the tax man.
And i'm sure the banks lending out the money will want to have a way to hold on to the collateral.
And the interest payment is profit to the banks/lender, and thus, they pay tax on profits (less expenses).
And then you do it again next year.
The 6% tax with founders owning 50% tank the valuation of the first company to 20 million. Which means anyone who invested at the beginning just had their returns cut by 60%. That's just not going to work for most investors, and in all likelihood this company never gets funded and has the chance to contribute to the economy. The fidget spinner company, on the other hand, barely notices the tax, what with its valuation only having been cut by 6%. End result, everyone lives for the short term and sells fidget spinners because you've literally introduced a 6%/year discount rate for everything in the future.