> facing an unrealized gains wealth tax bill many times higher than my net income…. I still don’t know how I was supposed to pay the tax
…Perhaps by realizing a portion of the gains and handing over the resulting wealth?
…Perhaps by realizing a portion of the gains and handing over the resulting wealth?
That means the state forces you to sell your company if people start to believe in it. Why can't they instead tax you once you do realize the gains of your own free will?
You start a co and have a million shares. Some guy buys a share for a thousand bucks, which means you get classified as a billionaire.
Then the state says "Hey pay us ten million of that billion".
When you start to sell your shares, you discover that the first guy was insane and nobody wants your shares. That 1000 bucks is all you have.
And the state goes "Better borrow for that ten million you owe us"
Of course the normal situation is that a company makes money and shares don't collapse in value - but what I describe can 100% happen exactly like that.
It's a kafkaesque dystopian nightmare that should not be possible in a democracy IMO.
I like the idea of taxing personal loans where shares are used as security. That seems to be the main loophole for getting tax-free liquidity today.
If any government wants a cut of people’s equity they should be bankrolling it in the first place.
This seems incompatible with the claim of "unrealized gains".
Perhaps you're realizing why this makes no sense?
For those who don’t know, just because you have a valuable asset, e.g. stock in a private company, that does not necessarily mean you can sell it for cash. I’ve experienced this the hard way throughout my career
Then how can you claim it is valuable?