It is impossible to solve world hunger.
I have no idea of what you point you are trying to make here.
It’s not real money, but it is real wealth. You can borrow against it, and turn it into money, while still retaining the wealth backing that loan.
Sure, why not?
It’s not that hard. Back when I had a modest stock portfolio, I had a program called “Personal Stock Monitor”, and I would click a button, and it would give me the value of my portfolio within a few seconds.
I can only imagine that tools for monitoring one’s personal wealth have only gotten better over time.
And to make it easy for those “everyday people” with just a “few million” in assets, we can set the wealth tax progressively as well as the income tax. Say you get your first few million tax free before you have to start paying anything.
I don’t get why you want billionaires to pull money out ofmthe productive economy. If Elon Musk leaves his money in SpaceX, that money is doing work for the company. Set up incentives that cause him to cash out some of that money, and you hurt SpaceX.
Why do you care if Billionaires leave their money invested? They aren’t blowing it on mansions and hookers. Setting up incentives that cause billionaires to constantly pull money out of productive enterprises is not wise economic policy.
Furthermore, trying to get revenue by taxing a few hundred very rich people is a very unstable way to fund the government. Billionaire’s fortunes can be very volatile. Every time a stock moves, paper wealth changes by the billions, butnthe fundamentals underlyingmitmdon’t necessarily change that much.
This idea will make inflating bubbles more attractive to governments, will exacerbate the business cycle problems by raising government revenue more in good times and lowering it more in bad times. There are bad incentives baked into this idea that will lead to bad decision-making. What government is going to allow the market to drop when it should, if that drop means losing billions in government revenue? It makes the government the ultimate inside trader.
By tying government revenue to the stock market in this way, we’re setting the stage for even more market manipulation by the government, and more tax avoidance activity by the rich. This is a bad idea.
I think the point was that we already do pay property taxes, as well as a number of other taxes, and we are not forced to sell.
Unless you have some compelling reason as to why having a wealth tax on billionaires would force you to sell your home, it is your point that is not really hitting home well.
The other problem comes in with the volatility of investments- are your gains/losses just a snapshot at a point-in-time, or is it some sort of average?
What’s to stop companies from gaming the system on behalf of shareholders? Like say ALWAYS make negative announcements right before “unrealized gains tax day”, so that the stock prices may be temporarily depressed?
Personally I think taxation on unrealized gains is a horrible idea. They aren’t “gains”, they’re just an idea of the value of what the stock could sell for.
It’s almost as if the Democratic party is so eat up with the idea of penalizing billionaires for being billionaires, that they’re willing to resort to this kind of ghastly nonsense.
And FWIW, lots of everyday people have net worths in the low-single digit millions, especially people close to retirement. It’s not at all uncommon to have a net worth in the few millions if you have robust retirement investments, a home that you own outright, and some other money that you’ve accumulated. Doesn’t make them overly wealthy, just prudent. And they don’t deserve to be penalized for it because someone else had worse breaks or wasn’t prudent with their money.
Sure, but you don’t pay extra based upon your equity. That is wealth.
Oh, make no mistake, people are frequently forced to sell. But yes, the point was I don’t pay taxes on my equity, I pay taxes on the full value of my property regardless of how little equity I have. So the threat to pay taxes based on my equity would be tax relief.
Unless he thinks the rule would be to pay taxes on the full value of my property PLUS the equity I have in that same property, which seems a bit egregious, if you ask me.
Edited to add:
To be fair to the Billionaires out there, I’d only ask they pay tax on the full value of their holdings, and NOT be forced to pay extra if they own those holdings outright.
Look folks, it’s really pretty simple. People who are worth billions of dollars should not pay a lower tax rate than the rest of us. Maybe they should even pay a higher tax rate. And they sure as hell shouldn’t be paying zero.
Right now, a lot of them do pay a lower tax rate because the bulk of federal taxes are based on income, and billionaires have clever and completely legal ways of making sure their taxable income is low or non-existent.
I’m not sure how anyone anywhere on the political spectrum could be okay with this.
If you don’t like the idea of taxing wealth or unrealized gains, fine. What’s your alternative?
Exactly, a wealth tax would ALSO tax you on your equity.
Why would a wealth tax cancel property taxes?
You would pay both, just like with a wealth tax one would pay taxes on the gross value of stocks owned, plus income taxes on any profits when sold.
You are missing the entire point of a wealth tax.
Get rid of the lower capital gains tax rate.
Cut some loophole s out.
Any effective change in the law is made near impossible because they influence what the law is and isn’t much more than we do. Y’all are asking the cat to bell itself.
How do you hurt SpaceX like this?
When Musk sells shares they do not disappear. Someone else is buying those shares.
SpaceX sold that share long ago. They got the money. People selling shares later does not affect them directly.
Nitpick: SpaceX is not publicly traded. I believe there are some companies that invest in SpaceX that are publicly traded, and whose shares are widely viewed as proxies for SpaceX shares, but SpaceX itself is privately held.
Mind I’m not really looking to wade into the NASA spending vs SpaceX spending discussion. I think SpaceX has been really impressive, but I’ll note that one of the main problems with NASA in an efficiency perspective is the politicians who govern it quite deliberate insist that it be a jobs program. When you’re serving the interests of political masters who demand inefficiency so people in Alabama can have jobs, you’re never going to be as efficient as a private entity.
But that is part and parcel of how governments often work. I’ll also note that in the 1960s no entity other than a big government agency like NASA, at the time being funneled vast resources, was going to land a man on the moon, no combination of American entrepreneurs was capable of that. I think government space programs where they are still useful would be for pursuing large projects of societal value that private industry just will never have an interest in.
Anyway all of that is an aside–I more meant with my statement that while space exploration is cool and so would a trip to Mars, just because Musk wants to go to Mars doesn’t mean it’s actually a good goal for humanity, nor does him going to Mars mean he’s spending the money better than government would spend it. For example I’d value beefing up our community college and trade apprentice programs far more than I’d value sending someone to Mars. I’d value roads, airports, and seaports not being borderline third world level over sending someone to Mars.
People often used this argument to complain about property taxes when they were the primary tax people paid. In Europe for example it was often stated that a farmer might have to pay tax regardless of how productive their land was that year, since the tax was often levied on a per-acre basis. That doesn’t necessarily mean it’s a bad way to tax things.
Now that being said, I’m a little skeptical of the mechanics of a tax on unrealized capital gains, while I do think the historical precedent is we generally do tax accumulated wealth, I think there are mechanical problems with easily applying this logic to joint stock share holdings. That’s not to say it’s unworkable, but it’d need to be carefully crafted and considered.
Personal Stock Monitor would also give me a trailing average, on whatever timeframe I put in.
It’s really not that hard. Make it a 12 month trailing average, if you believe that companies will lie about their valuations, and the SEC would have no way of catching them in these lies.
As long as people continue to believe and spread the idea that taxes are a punishment, wealth inequality will continue to rise.
The median net worth of Americans is $161k.
The percent of Americans with a net worth over a million is 6.71%, so right, not all that uncommon, but not exactly representative of the other 93% of the population either.
And if the first few million is tax free, as I said in a previous post, then around 99% of Americans are entirely untouched by this tax.
People who believe that they are simply temporarily embarrassed billionaires, who don’t want to have to pay taxes when their riches inevitably arrive.
And if they hadn’t done that, then there would be no private companies in the space industry today. Massive government spending paved the road for private companies to follow.
We need such expenditures to pave the roads for tomorrow’s companies to follow in new ventures. (And to literally pave the roads, as well.)
On the one hand, you’re right.
On the other hand, my income gets taxed by the Feds and the State, so it isn’t inherently improper to have a tax on a single item be levied by two different agencies.
On the third hand (thanks, Pfizer!), the proposed wealth tax only kicks in when I am in a favorable position financially, that is when I have $1B to my name. Want to lower the threshold to $1M? I think I’ll be able to cough up a few bucks if I have over 7 figures banked, especially if the tax is $0 once I dip under a mil.
How about we start with incentive based stock options (ISOs)?
Those are not taxed. Yet, most CEOs are paid a (relatively) small salary and are instead given ISOs.
That is actual wealth they are being given. Why isn’t it taxed? Assess the value of the stock when it is vested and tax it the same as if they were given cash.
If later they sell the stock at a loss they can take a tax write-off.
And here is the misapprehension that taxation is “pull[ing] money out the productive economy”. Taxes fund fundamental needs such as infrastructure, education, research in basic and applied sciences, social services, law enforcement and national security, et cetera, that private business either cannot or will not support because it offers no direct profits. That these are “externalities” to the core business of SpaceX in launching rockets doesn’t change the fact that these services ensure that the company can focus on that business and have ready availability of well-educated engineers and technicians, access to materials, operate in an environment that isn’t in constant political and social turmoil, et cetera.
In fact, the bulk of SpaceX’s revenue comes from the public purse funded by taxation (and deficit spending), so the idea that making Elon Musk or SpaceX pay taxes is only hurting the company is only true when you exclude how its government customer pays for SpaceX to launch its payloads in the first place. In essence, Musk is an example of corporate entitlement compounded by the belief that both he and his company should be sovereign entities free of any obligations or regulations but should still benefit from taxes paid and deficits supported by everyone else. He is the Randian ideal of a “self-made man” who ignores everything provided for him to be successful, a John Galt for the ages.
The problem with SpaceX and many other companies being so overvalued that paying even a tiny fraction of their wealth as tax is a separate issue regarding the essential problems in speculative market valuation, i.e. pretending that a company will be worth some enormous factor of its current holdings and immediate production even if there is no way it could actually realize that value assuming decades of projected profitability. This kind of fraudulent “wealth creation” is what creates cycles of boom and bust even when companies in an industry are fundamentally sound in terms of their core business (i.e. are able to build products and sell services at profit) and creates perverse incentives to do things to make it appear as if they are far more successful than they actually are. I’d make an Arrested Development reference, except that show is not nearly exaggerated enough so effectively satirize actual scandals of overvaluation. SpaceX certainly isn’t contributing to the economy in the form of jobs in any way proportional to that valuation which gives lie to the argument of just how much massively overvalued businesses and the billionaires who own them are “contributing to the economy”, much less speculators who drive up such valuations.
Stranger