Should I be forced to sell my rock, because I'm getting a $500M tax bill from the government because some weird little cult said they would pay $1B for it - regardless of whether I want to sell my rock?
It's somewhat of a game (joke perhaps), usually used in the context of ways to fairly assess land value.
Maybe you can say you don't have to fully abolish property. But it remains especially hard to predict what second order behaviors any particular implementation would bring about, and what steady state would result from them.
Per your example, if the expected ruling of society would be that gp doesn't get to keep the rock because they don't "care" about it... well, maybe people in their position would suddenly find themselves caring about the rock very greatly. Not even cynically -- if the choice presented to you is "value or no value", the limbic system suddenly becomes very persuasive.
The rock is mine because my family bought land a few hundred years ago, and the previous owner thought the rock was ugly and let it for us.
> If the rock means little to you, why should you have it rather than the cult that actually values it?
The rock means a lot to me, because it reminds me of my ancestors. I value it, but I just don't have a billion dollars to attach to it as its value.
> What if the cult wants to preserve the rock but you want to destroy it even though that will cause great pain to those who care about it?
I dunno. I think it is my rock and I can do with it what I want. But I don't want to destroy it, I just want to keep it where it has been for the past 200 years, near my family home's fireplace.
> Why should you have permanent ownership of a rock just because your parents had it?
Because that's how ownership works. If anyone can come take anything from you at any point, then I don't think you can ever be considered to own something.
If you don't want to sell your rock, then set up a family trust to hold the rock with the provision that it can never be sold, then the rock will have effectively zero taxable value and you can keep it in the family forever.
If you don't want to do that because you might want to sell it some day, then it's not really a family heirloom, it's an investment.
Or, put the rock in a trust, tell the cult that they can take ownership in 100 years and have access to it once a year for ceremonies if they'll pay you $100M today.
Tax deference is not tax avoidance.
I pass the rock on to my children and die 20 years later. The 50 million is now worth 74 million.
Both the rock and 74 million are stepped up to their current value when I pass it on to my children. The children repay the loan with their 50 million and now have 24 million and the 1 billion dollar rock still, tax free.
How is that not tax avoidance?
The tax code, today, in practice, already frowns very much on tax deference, and tries to inhibit it when possible. The AMT-schedule is purposely designed to pull tax forward, and precisely discourage strategies for tax deference e.g. to counter the abuses that would arise by using stock-based (or cult rocks) compensation to avoid income tax.
Property tax (which is a wealth tax) is another way to siphon off tax on unrealized wealth.
Now, from a parable perspective, does the post mirror the principle of how wealth taxes work? Maybe, if you're willing to equate the entire market (or whatever communal entity we're using for the basis of assessment) to a weird little cult.
Not to mention, the calculation for wealth would probably be based on something less temporary than a fleeting moment in the markets.
Finally, the government would not directly take shares, so they would always be owned by you. Presumably with the stock price so much reduced you can simply purchase more at a pittance.
They wouldn't take shares, but I would be forced to sell shares in order to pay the tax bill, because I don't actually have that money just laying around. So I had 10M shares @ $1/share, share prices go up to $100/share. I get hit with a $900M tax bill and sell 9M shares in order to pay it. Price goes back down to $1/share, leaving me with 1M shares. How exactly should I purchase more at a pittance? I spent all the money I didn't even have paying the tax bill, there's nothing left in my bank account to buy any shares.
That sounds like horrible financial advice.
By this same standard, maybe Amazon is doing an immense service to humanity, and that is why so many people use the site daily, and actually enjoy doing so. So maybe Bezos should get to keep his billions as well.
Currently, gold retails at $1808 an ounce. So it would take over 15.6 metric tons of gold to be even worth a billion dollars. That is substantially more than an "old pile", and probably of historical worth, like contained in a ruined temple or wartime vault or something
The San Jose galleon as I mentioned is estimated to have about $17B of gold on it. I don't think very much is going to change about the world when it is raised.
Whether you're receiving the value of the asset or not, you're locking up the value of the asset and preventing a larger group of people from benefiting from the value of the asset, which is sort of the point of a wealth tax.
My point is: With a wealth tax, anyone with money can take anything they want from anyone without money, even if the person without money doesn't value something in the same way that the person with money does.
The people that wouldn't sell it for a $1 Billion are the people that would give it a way for free, ie: those that have little value for money.
In actuality it's not a rock of course. For a founder of a company the situation is more like you've spent most of your life building something you believe in and suddenly you have to sell it because a group of strangers believe that your thing is worth more money than you've ever seen in your life, and the government wants taxes based on that belief. That seems fundamentally unfair and wrong at least to me.
So where's the strawman? Would the person in this scenario not be affected by a proposed wealth tax?
Also, I don't really get how it is "simping for billionaires" in the slightest. If I said that billionaires shouldn't be pulled from their mansions and lynched, am I simping for them too?