A Calculator for the Billionaires – Elizabeth Warren
elizabethwarren.com
elizabethwarren.com
Imagine you're a startup founder who has a high-flying startup. You own 20%. It just got valued at $800,000,000. Now you're worth $160,000,000 ON PAPER. That's awesome. But it's not the same is being rich.
Imagine your salary is $150,000. With the Warren plan you now owe $2,200,000 PER YEAR in taxes from cash you don't actually have. So you now what, sell your company? Try to secondary? Congrats you just got taxed real money on fantasy paper gains that you never realized.
Also IIUC This seems to be a number that need paid (19MM per Billion?) every year - is that right? About a 2% tax.
When the news came out this week the Uber dropped in price it was naturally accepted it was because the lock out for employee stock sales ended.
Also IIUC startup equity value (for tax purposes) is typically based on the startup's 409(a) price, which I think is pretty different from investor valuations, since investors get preferred stock (among other differences)
Yes.
> At this point, wouldn't your business have hundreds of employees?
Also yes. Why does this imply you'd be making more than $150k?
In most places outside of SV, $150k is enough to qualify as "Affluent".
You're right, an owner of $160M paper money might not have 2m/year liquid, but I am sure there will be many banks willing to provide equity secured debt (perhaps no payment needed until exit!) to pay for the taxes. Also, if this pushes startups to profitability/IPO earlier, I think that's probably a good thing.
Many countries have tried taxing net worth. The result is always the same: billionaires leave the country and investors think twice about building a business there...which means less jobs and a worse-off economy for the rest of us.
The government just isn't good at innovating and will waste that money on 'administrative costs'.
The funny thing is that the rich already pay the majority of federal taxes in the US. This isn't including all of the people they employ that are also contributing taxes to the government till.
It never seems to be enough because all of that money is pissed away and nobody is ever held accountable.
Some of these poor people made poor desicisons (due to how they were raisedin their early life)that still hold them back and have lots of mental problems due to family bringing and the environment they grew up in.
I will say the same thing that many say when they want the middle class and anyone earning money to become more of a slave to the government: They need to pay their fair share.
When all of the wealthy people leave, the next ones on the chopping block will be the middle class. Why should everyone successful be punished for making the right decisions in life?
"Some of these poor people made poor desicisons (due to how they were raisedin their early life)that still hold them back and have lots of mental problems due to family bringing and the environment they grew up in."
This is making lots of assumptions about poor people with no proof to back any of it up. Giving someone free money for making poor decisions will only lead to future generations of people being dependent on government handouts. We need to stop this trend, not continue it.
>Since poor people can't pay very much in taxes, how about we have required government work programs to make up the difference?
Maybe we should have a living wage. If the threat of wealth taxes is the catalyst that gets us there then good. The extremely wealthy will always hire people to hide their assets and minimize their tax burden regardless of whether the govt implements an appeasement policy. Hoarding capital and removing it from the economy also harms everyone, taxing that effect seems entirely reasonable.
We already have a living wage. Amazon is paying at least $15/hour in all their warehouses and many other companies pay well over minimum wage for jobs that require little to no education. The amount of truly minimum wage jobs is miniscule.
"If the threat of wealth taxes is the catalyst that gets us there then good"
A wealth tax won't get us there. The wealthy will move to a country that has less-restrictive tax laws (and most of these countries would be happy to have the new income) and the customer and the middle class will end up paying more out of their pockets.
a "living wage" is always a moving goal post and doesn't really mean anything. If I'm single and have 3 kids to support, my 'living wage' will be much higher than a person that is single with no kids.
Why should a company pay for the poor life decisions of all its employees?
There are better ways to do what the wealth tax candidates want but they aren't imaginative enough for that task.