This is to once again mistake net worth for money. Net worth is not real. It is not a good measure of the money someone may be able to realise. They do not have hundreds of billions. There is nothing to tax until they sell some shares.
Good way to find out it this is the case: take it away. Not real, right? Why would they mind?
Is it Zuck's networth or salary that makes it possible for him to own his ranch in Hawaii?
In the rare cases where contract law makes the transfer impossible legally the government could trivially step in to make it possible
And certainly ceejayoz was being a bit glib by suggesting we take all of it, but it would not be remotely insurmountable to tax billionaire wealth.
This is, ironically, more of a guess/estimate than determining Musk's net worth is. We don't actually know that!
whats the complication? if its not worth anything whos gonna worry, especially if the government then compensates you in dollars
Oh, are those real now?
Valuing assets is a routine, widespread thing.
You can't just handwave away the fact that the real world exists.
A painting can be valued. A vintage car can be valued. A movie script can be valued. My house's value changed a bunch during COVID; I'm still taxed on it! Each is an asset; none of these examples can be perfectly valuated; each may see its value change dramatically over time, but you can still estimate its worth pretty well.
Hell, I can put my house address on Zillow and get an estimate in real time.
these other assets like musk's stocks are still quite divisible, and theyre as liquid as the government wants them to be. just because musk hasnt written the liquidity into his government sponsored contracts doesnt mean the government cant say yes, 10% of your private spaceX stock is liquid and belongs to donald trump now
its real and thus it is taxable
Take what away? I'm saying if I own 51% of Tesla, you cannot tell what amount of money that amounts to until I sell it.
C'mon, man. We know Musk's net worth. It's public knowledge!
No we don't.
>It's public knowledge!
No it's not. We estimate his net worth based on public filings. We know next to nothing about his nonpublic holdings.
https://en.wikipedia.org/wiki/Wealth_of_Elon_Musk
That the estimates vary a bit on the edges doesn't mean they've no value. It was public knowledge when his net worth confirmably hit a trillion dollars in share holdings.
"with an estimated"
You made my point for me, thank you.
>That the estimates vary a bit on the edges
We don't know that. It could vary widely, intra-day even.
>doesn't mean they've no value.
I did not make this claim.
>It was public knowledge when his net worth confirmably hit a trillion dollars in share holdings.
It was "public knowledge" when his estimated net worth hit a trillion.
If your point is "we can't tax people because estimates aren't perfect", sure. But it's a silly point. We already tax people off estimates - if you own a house, your property taxes are assessed in exactly this fashion - an estimate of its value.
> It was "public knowledge" when his estimated net worth hit a trillion.
No. It was public knowledge when his known numbers of shares in his publicly traded companies reached a known price point.
Don't try to deflect or move the goalposts. My point is you stated "we know Musk's net worth" when we don't. This is a false claim.
>No
Yes.
>It was public knowledge when his known numbers of shares in his publicly traded companies reached a known price point.
An estimate based on the valuation of his publically known stakes at a specific point in time, not his net worth.
But even in California's case this doesn't feel like anything anybody would object to. Given how much California Billionaires liquidate using loans on their wealth, I bet, they could do a middle class tax cut too to offset it a little bit too.
I am little baffled as to why the politicos haven't latched on to this whole-heartedly. You can still proudly say you're taxing Billionaire wealth. Because you are! Just more sensibly.
And the answer to that was "if you're so afraid that selling will tank the value of the stock, then we [the government] will happily take your taxes as stocks directly, and we take on the risk that selling it will reduce its value".
Yes indeed. It's basically saying "don't bother starting everything because the government will gradually just own it all anyway".
It's harder for private companies sure, but who will stand in the way of govts if they said we will sanction your if you buy X or Y company?
This entire argument doesn't really hold IMHO
The SEC exists. As do many other mechanisms by which the government regulates direct and brokered securities trades and sales. You can make the case that some of those controls are poorly/ineffectively implemented, but you can’t claim that it’s not something the government routinely regulates, intervenes in, and sometimes prohibits outright.
https://www.sec.gov/files/forms-3-4-5.pdf
Here are Musk’s. https://www.secform4.com/insider-trading/1494730.htm
high frequency traders dont have a right to a business model.
if they want faster trades, they can take full liability for what they own
Because the building is standing right where it is, in the open, lit by the sun every day. If you don't pay your tax, the government can just take it.
This compensates for the several philosophical and moral problems with it, and I've seen several economists declare it the best form of taxation there is.
Your comment added literally no value except to whine.
Try holding yourself to at _least_ as high of standards as you hold others. People will be less likely to think you're a worthless asshole.
If a majority stock holder in a company sells all of their stock, the price first the first share sold is likely going to be completely different (and substantially less!) than the last share sold.
Personally my favorite idea for this stuff that I have heard thrown around is to allow people to self value everything. However, that self valuation then becomes a price tag. Let a billionaire's accountants put their own evaluation on their equity in a business. But that becomes a binding offer and some other billionaire could come along and buy them out at that valuation. That creates pricing pressure in both directions, the person is prevented from underpricing their assets due to the threat of another buyer coming in and a person is prevented from overpricing because it increases their taxes. And suddenly all the problems regarding how the government appraises these things disappears.
And that ignores that it trivially enables large-scale exploitation and looting by construction.
Once again, this is simply haggling over price. Name the premium you think is justified and add that into the law.
If the owner is required to invent a fake risk premium then it virtually guarantees that the risk will be mis-priced. Forced rampant mis-pricing is an exploitable arbitrage opportunity of epic proportions. Every quant worth a damn will make a fortune looting this. No serious policy can ignore this defect. It has the additional political downside that no one can ever own anything anymore in a meaningful way, which won’t be popular.
No one takes this idea seriously because anyone with a modicum of finance math background can see that the math doesn’t math. Political ideology doesn’t even figure into it.
For example, imagine we only apply this to people with a net worth over $500B. That's literally only Elon Musk. He has plenty of money to hire his own team of quants to price his assets. We can even be generous with this law and make the purchase price double the valuation. Hell, we can even restrict it to only apply to stock of publicly traded companies so the wealth valuations are highly informed by market pricing. We can just keep adding rules like this until you're out of economic reasons for why a wealth tax and/or this form of valuation can't work. At that point the debate is lost and "we're just haggling over price" because once we apply it to Musk, how can you argue against applying it to Bezos...
This type of forced sale happens all the time with public companies. For example, only like 60% of Twitter shareholders approved the sale to Musk, but the other 40% were forced to go along with it regardless of their preference. If Musk can do that to other people, why should some hypothetically richer person not be able to do it to Musk?
And to repeat myself for a third time, we don't need to haggle over price. If we only want this to apply to billionaires, assets worth $50 million, or whatever, that's fine. If one of the people impacted truly doesn't want to sell, let them set the price as high as makes them feel safe. I'm not going to lose any sleep over taxing the emotional desires of billionaires.
They signed up to that, though. Tagalonpg/dragalong rights are priced into the share price. That's not the same thing.
I think a lot of tax authorities also don't really aggressively reassess that regularly without a sale, so it also kind of ends up baked in that if you didn't pay that much for the property, it's only theoretically worth that much.
I don't like property taxes either, and at minimum would rather they were called something else, and preferably replaced with per-service charges where possible.
But either way they exist to pay for things, and not to just degrade the value of your property simply because you worked to own it.
It seems there are many many more people heavily invested in preventing land tax all of a sudden and are very informed whereas when that guy made a land tax visualizer a few months ago... crickets.
https://news.ycombinator.com/item?id=45425770
> but I struggle to even conceptualize what land value means
One of the first comments. Now there are dozens of people who are suddenly well versed in "georgeism"?
Another evident thing is that people will start retreating from the internet as this gets worse (With LLMs accelerating the trend).
I disagree with you on what is being drip-fed. It's factual that deranged levels of wealth inequality are causing problems, even the billionaire wannabes on HN are starting to see that.
This is circular. Wealth inequality:
1. Isn't real. It's a paper value that would not survive contact with reality.
2. Doesn't matter. What matters is the absolute level of poverty and whether that's getting better. Someone in poverty in the UK today will still get healthcare, eyecare and dental care beyond the dreams of Henry VIII.
3. Is genuinely a stupid measure. You could "fix" it by burning everyone's possessions until everyone has the same: nothing. Zero inequality, and yet somehow doesn't sound great.
> What the wealthy and powerful are funding is division, fascism, the far-right and immigrant hate, so that they don't have to pay more taxes. It's the same divide and rule playbook since forever.
This is just your media consumption showing.
And humans are wealthier than any time in history. They have access to robot slaves that can wash dishes and clothes for them. They can access fruits grown over 1000 miles away for 69c. They have potions that can cure cancer. They have the database of all human intelligence in their pocket, accessible from anywhere on the globe. They have individualized transportation that can travel over 2 miles a minute. They have super intelligent thinking machines for cents.
Life has never been better for mankind.
The last thing you should do at that point is vote for more policies that will destroy economic activity in the name of "fairness". That's how you got here.
If you have 100B to your name even if it's post IPO stock in a possibly ponzi company that's your current wealth and you can easily convert a staggering portion of it into material realized wealth depending on several factors.
If I use cash to buy 1B dollars in Microsoft shares today, am I not worth a Billion dollars...?
The value may not be exactly convertible agreed so let's just force everyone to book all gains every year, and force sell a net percent of your share.
Not 100B$ of share, but 2% of 100 Million units of stock that you own. Why does this not work?
If I take 2% of your shares why can't it work the same way? I can then pick and sell it over the next year or two however I see fit, in case of govt they can slowly sell back this share to not affect the prices too much.
I am baffled by the fact that we have a tractible quantity and people call it hard to use to measure money.
Paintings, Jewels, etc. are what's truly the hard part of the wealth equation not the stocks, which is over 99% of what a wealthy billionaire owns.
I am not even considering pro or against taxes on billions people make but it's ridiculous to say stocks aren't money? Then what is money really... Currency is also traded, it's value can also go up or down....
if the owner thinks its worth more than what the government proposes, they can pay tax on the higher amount.
its still not that hard
This is utter madness. What will happen is businesses will move en masse to places with economic systems not overrun by those driven clinically insane by years of listening to their favourite pundit blame billionaires for everything.
Who says that the price you paid per share was the actual market value of the shares? For example, let's say that you inherited 10 million options to purchase Microsoft stock at $1/share, and in so exercising the options (by writing a check for, say, $10 million to Microsoft), you then end up with 10 million shares, which on paper, with the current stock price close to $500/share, would be worth close to $5 billion. But could you actually get that much money from selling 10 million shares? Definitely not overnight - so many shares getting dumped on the market at once would materially affect the stock price. The $5 billion number is a hypothetical that depends on other people backing up the hypothetical numbers with their own money (i.e. buying at the hypothetical price) - it is not the same as "I have $5 billion in a bank account and could use that to go buy a yacht and buy political ads etc. with it"
On the contrary - it's trivial for controlling shareholders to direct the company to issue more stock to them and thus dilute the shares that were taxed. What do you propose, that companies can no longer issue stock after some of the stock has been taxed?
And what about non-divisible assets like real estate? There's nothing that prevents the government from forcing real estate to be held by LLCs instead of individuals, then shares in the LLC could slowly be taxed by the government. So what happens in 20 years when the government owns 50.1% of all the LLC shares that comprise the ownership of the $100 million Hollywood mansion? You're going to let a bureaucrat kick out the A-lister who lives there and put it up for auction? Attempt to sell it to someone who knows full well the same would happen to him?
It's very, very hard to design a wealth tax that doesn't end up being an assault on private ownership in all forms.
No. It will be higher. Say you spend your money on shares advertised at different prices, buying the cheapest first, like this:
800000 shares at $500 $400,000,000
300000 shares at $750 $225,000,000
200000 shares at $1000 $200,000,000
100000 shares at $1250 $125,000,000
33333 shares at $1500 $ 50,000,000
Total number of shares: 1433333
Net worth (1433333 * $1500): $2,149,999,500
That's why net worth is stupid.
Would you rather have 1M dollars in cash or 10B in stock that you can't sell?
> It is not a good measure of the money someone may be able to realise.
And as such, when you get into the higher ranges, net worth is quite a good indicator.
What is Cargill “worth”? Suppose the families announced they were selling 90% of it on Monday. Would they get that figure?
What is Jensen Huang’s share of nVidia worth? If he announced he was selling all of in October, why would he not end up with that figure?
It’s quite different for a bank to lend Jensen (or Larry Ellison or Elon) 5% of that notional figure. They don’t need to care whether the true value is 30% or 50% of the notional to make that loan.
Loans must be paid back. Loans are cash flow neutral (cash flow negative with interest) over the maturity. That's why loans are not counted as income.
When the market grows it makes the collateral worth more, which lets the borrower keep refinancing the debt instead of selling assets and realizing taxable gains. As long as the assets appreciate faster than the debt grows, the borrowing can effectively roll forward for decades. Eventually the estate pays the debt out of the assets themselves, but this is not necessarily out of taxable income earned during the person's lifetime. The US markets has seen exceptional genuine growth, but the trillions of 401(k), IRA, etc money flowing in to them over the last 40 years is no small consideration.
And even so, you could say it all settles out in the end, but that ignores the fact that there have constant constant efforts (and successes) in eroding away the e̶s̶t̶a̶t̶e̶ ̶t̶a̶x̶ "death tax" during this same period.
Long maturity products still have to be repaid. There are no "infinite" maturity loan products for retail customers.
>It's questionable that whether such loans are cash flow neutral.
There's zero question: loans are cash flow negative (for customers) with interest. Banks are not going to offer products that are not cash flow positive for the bank.
> Especially with how the market has been lately, the gains erase any burden of the loan.
And when the market goes down, you get a margin call and get wiped out.
You’d think they’d jump over each other to lend money against such a stable, secure asset right?
Except they’ll say “sorry, this isn’t allowed. IRS treats borrowing against an untaxed retirement account as an early withdrawal, even if the asset itself stays untouched.”
Turns out the government fully understands the concepts of stocks, gains, unrealized net worth and more, and has laws on the books to make sure you are being taxed appropriately for them.
Meanwhile billionaires have convinced you – through their machinery of media, influencers, politicians and more – that this exact same reasoning absolutely cannot be applied to their own wealth. Because it’s “paper money”. It doesn’t exist. There’s nothing to tax. Just cannot be done, or it’ll bend the laws of spacetime.
Quite the opposite: Socialist politicans and their media lapdogs have dishonestly convinced you that wealthy people are escaping taxes en-masse by taking out loans and that this can only be stopped by eye watering wealth taxes. They frequently use a motte and bailey confusing unrealized gains (which certainly exist in huge amounts but are also significantly fiction) with tax escape via loans collateralized by securities.
But it's not true: were there meaningful tax escape that way it could be addressed by establishing rules with conditions where taking a loan against securities can be treated as realizing gains (and adjusting cost basis accordingly). Doing so would be minimally disruptive and distorting and have relatively little legal complication (at least compared to wealth taxes!).
But the reality is that the claimed tax escape isn't happening (at least not at any significant scale) particularly in the current interest rate environment, so a reasonable policy change to address it would be a no-op.
... and to grow and maintain their political standing they specifically need to push a NON-SOLUTION because they can't campaign on something that was simply done and solved, and to retain your (highly monetizable) attention they need to rile you up against an Enemy, and certainly never address the state's addiction to wasteful spending and buying votes with tax dollars as one half of the revenue vs expenses equation.
they dislike wealth taxes, which are an old roman concept predating socialism, because the wealth tax covers all the work arounds they can think of.
it is a proper solution to the overall problem which is extreme wealth concentration.
the obvious alternative is nationalization of all assets worth more than 100M.
DOGE has pretty conclusively proved that the government has been incredibly efficient with spending and doesnt have an addiction to wasteful spending. instead the problem is wasteful monopolization and wealth concentration. society writ large has an addiction to giving a small cadre too much power and control, and they arent the government
[0] https://factually.co/fact-checks/business/did-elon-pay-11b-i...
> buying votes with tax dollars
This was more convincing of an attack on "Socialist politicians" before Sept. 9, when Trump did it more openly than they ever have. I guess you could believe his claims it won't come from tax dollars. But if the government has $1 trillion lying around for this and chooses not to unconditionally lower taxes for everybody, is it any different?
The head of the anti-socialist, anti-wasteful-spending party is spending billions on a more impressive Air Force One, golf days, family vacations, vanity renovations, DHS ads starring a POTUS wannabe, DOGE effectively paying people not to work, etc.
Purely an accounting artifact. We can pass a wealth tax tomorrow and it’ll suddenly be taxable.
Net worth is real money, and is usually a very accurate measure of what people can realize. There are a few outliers who own so much that they’d move the market if they sold it all. Selling 2% to cover taxes? Not going to move the market very much.
That is what makes the timeline GGP laid out impossible:
> We can pass a wealth tax tomorrow and it’ll suddenly be taxable.
Unless we don’t share a common definition of “tomorrow” or “suddenly”. (For reference, the 16th Amendment process took about 3 years and 7½ months from Senator Norris Brown’s initial formal proposal to ratification by the then-necessary 36th state. [You would need 38 states today.])
The point is that we can do it if we want to.
When you meant "shortly before Memorial Day of 2030", it's not clear that 51% of the misunderstanding is on the reader.
Income for what though? Personal spending? Building a factory to great jobs?
Capital gains for what though? Personal spending? Building a factory to great jobs?
Property for what though? Personal spending? Building a factory to great jobs?
Inheritance for what though? Personal spending? Building a factory to great jobs?
What a strange question.
Which currently require interest payments of ~6-8% APR. Meaning that you need to be able to invest that money that is being borrowed back into the economy to hopefully get a return more than that. And if your investment fails you will have to realize a different investment. The interest being paid doesn't get hoarded either and is used to make other investments, pay employees, build products, etc.
The idea that a bunch of people are just hoarding their money and not reinvesting it back into the system is flawed. Taxes actually have the opposite effect to contributing to the system. Taxes are like if someone was to come and start hoarding money under their mattress for himself and not contribute back to society.
I don't know what point you were trying to get across with your link, so I gave my general thoughts on the article.
Forced liquidation hurts more than the sticker price, but with billionaire taxes, that's a feature, not a bug. They make the most sense as a check on concentrated power rather than a revenue driver.
Yes, businesses are allowed to buy and sell things without being taxed on the sales. If you want to change that rule, you are going to change a giant number of things purely to get at the billionaires you've spent the last few years being trained to hate.
> Forced liquidation hurts more than the sticker price, but with billionaire taxes, that's a feature, not a bug. They make the most sense as a check on concentrated power rather than a revenue driver.
It's missing the planetwide jungle for the trees if you think giving politicians the ability to reach into ownership percentages of businesses and deciding how much they want to charge you for owning a business is a check on power.
You wont mind if we tax it then will you?
You do, of course.
p.s. liquidity != wealth. try not to confuse them.
You can't take net worth away because it's just an estimate of what someone is worth. It may eventually be possible to turned into dollars and cents without losing too much in the process, but almost universally it can't immediately be exchanged in such a fashion.
Even more so when we're talking shares in a company that is not yet public, e.g. a founder's shares. At that point the valuation is complete speculation, based on what the company may be worth in some hypothetical future IPO. There's no actual price discovery since there's no public trading of such shares.
illiquid wealth != unreal wealth.
as I said, if it were unreal you wouldn't mind losing it.
if it is illiquid, you clearly do.
economic illiteracy is not the best foundation for arguing against taxing the wealthy. by pretending the wealth "doesnt really exist" and "isnt there" to tax it highlights the underlying greed motivating the argument.
if you dont agree, perhaps elucidate on a more legitimate reason you might have had for confusing unreal with illiquid?
But sure, how do you propose to pay taxes with assets that can't be liquidated and may not even be possible to valuate?
Even if you somehow pay taxes in assets that can't be liquidated, now the government has the same problem instead. What is the government gonna do, pay its employees in unlisted stocks, yachts and famous paintings? How will it even know how much taxes it's gathered?
If the tax isn't isn't just satisfying some sense of petty envy, and the tax is intended to cover some budget deficit, I don't see how this would help.
there are plenty of ways to handle the problem of taxing illiquid wealth but I dont think there is much value in discussing it with somebody pretending that means it is "not real".
it would be like discussing the science behind vaccines with somebody who persisted in calling them "poisons".
most people have very little illiquid wealth, and its generally in the form of a house.
billionaires are a tiny propertion of people, and their situation is as atypical as it comes. theres no reason to make super special accomodations for them, when theyre responsible for making their own dumb situation where they have too many assets to make them liquid on a hurry
An overlooked issue in popular discourse is that notional asset values are tightly coupled to who owns them — it isn’t transferable. Concepts like “dead equity” have been in the finance literature for a very long time. Elon Musk’s equity only has the value it does because he owns it. He couldn’t convert it into cash even if he wanted to.
no it isnt. illiquid doesnt mean unpriceable and illiquid doesnt mean can't be liquidated. people liquidate their illiquid assets all the time to pay their tax bills.
it being "complex to collect" is a criticism of many taxes which are already being paid. sales tax and VAT are horrendously complicated (far more so than a wealth tax) to collect but we still do it.
>An overlooked issue in popular discourse is that notional asset values are tightly coupled to who owns them — it isn’t transferable. Concepts like “dead equity” have been in the finance literature for a very long time. Elon Musk’s equity only has the value it does because he owns it
even if it were true, it's not a good reason not to tax him.
in fact, it might even help bring some sanity to the capital markets if he and every other billionaire were forced to price their illiquid assets for tax purposes.
theres no efficiency or impossibility argument that prevents this. the only argument boils down to stamping one's feet declaring that it's not fair (that I would have to value my illiquid assets and might be forced to sell them if I underpriced them).
> He couldn’t convert it into cash even if he wanted to.
Elon musk has been converting his assets into cash recently and he has had no problem doing it.
Bill Gates similarly liquidated his assets to fund his charity and didnt have a problem doing that.
Why is liquidating their shareholdings suddenly a problem only when they need to pay taxes?
It's not, and I don't think anyone said it was.
The problem is in the calculation of "net worth". And, more importantly, the difference is that people choosing to put their money into something is not the same as enabling it to be taken by force.
Yeah you did. You wrote "he couldnt turn it [his illiquid assets] into cash even if he wanted to".
>The problem is in the calculation of "net worth".
That is not a problem.
Let them value their own assets. If they value their ming vase at $10k then the government reserves the right to buy it for...$10k. They might get away with avoiding paying taxes. Or the government might get a bargain. The incentive, though, is to be scrupulously honest and accurate.
Some people obviously wouldn't like being put in such a position.
> And, more importantly, the difference is that people choosing to put their money into something is not the same as enabling it to be taken by force.
Im not 100% sure but I think this falls under the category of just saying "wealth taxes not fair!"
Well then why are people able to borrow against it and then also deduct taxes on the interest on that borrowed amount?
Also I pay property taxes. Somehow the worth of the property goes up every year and gets gets taxed accordingly. Then why can’t wealth get the same treatment?
I doubt they can borrow against the full amount of it, because that changes. They'll be borrowing against a much smaller value, so the lender has a safety margin. Same as if you have a mortgage you pay less interest the less you borrow vs the value of your house, except I imagine it will be far more conservative.
> Also I pay property taxes. Somehow the worth of the property goes up every year and gets gets taxed accordingly. Then why can’t wealth get the same treatment?
Well, three things.
Firstly, as an aside, it's incredible that you would want this. That is a bad system. You should get taxed according to the services you consume, along with a flat rate for common services, rather than punished with taxes for daring to spend money on improving your house.
Secondly, "wealth" is far less tangible than property prices. Property prices are very well understood. A share price can fluctuate wildly, and saying "well your net worth for today is the number of shares you have times the last share sale price" is just a terrible measure.
Thirdly, what will those shares be worth to sell when they are taxed? Investing is a gamble. Housing is different: we need housing to live, and we want a nice house. No one wants shares. They want a return, and for it they'll stump up a giant amount of money, that will fund many jobs for years, and generate lots of taxes, and who will want to do that when their share will be eroded year on year? There's no benefit to shares except the return. Decreasing the return will have a direct impact on innovation and jobs.
This is a very strange claim when we have property taxes. Shares are property so they can be taxed just like houses and land.
Yes, everyone in the US can play the same clever little game by taking out a loan against a property and deducting the interest against their income.
> and the estate value is reduced so the heirs won’t pay as much (or any) estate tax
This is just madness. The estate value is reduced so their heirs won't get as much. You still pay inheritance tax on what you get. Anyone can avoid inheritance tax by just not passing anything on.
if you are claiming the high net worth, almost certainly you have raised significant actual money on things you own. a wealth tax means that if you dont actually think your business is worth a billion, you cant raise money as if it was.
thays a net good thing.
if peter theil is lying about being rich and he only has a couple hundred thousand bucks to his name, the publiv overall deserves to know, and it should cost him quite a lot to raise or borrow money.
these people are commiting fraud and should be forced into texas prisons without AC because theyre lying to banks about the value of their assets, and the bankers too beed to go to those same prisons because theyre defrauding their depositors.
this is only a good thing for routing how whos lying about their worth
That's tautological. I mean, it's true under current federal tax law. It's obviously not true under new California law, which is what the article is about.
Clearly the government can tax non-cash assets, and they do all the time. People act like "wealth taxes" are some moral horror or logical impossibility, while tossing their mortgage statement into a big file and pretending to ignore the property tax line on the escrow account.
Are there practical problems like "wealth has feet"? Sure. Taxation is hard and all systems can be gamed. But let's not pretend that there's a greater principle at work here.
Edit to point out a subtlety: this is an argument at cross purposes. If the economic impact of all this personal wealth growth is so high that liquidating it would move whole markets, then very clearly it represents significant missed tax revenue.
There are cases where taxes can hurt investment, but you're really talking about quite high rates. For instance, the US peak rate of income tax used to be 94%. That almost certainly _did_ hurt investment.
Why can't they pay tax in shares?* If net worth isn't real it shouldn't really matter...right?
*Please no pedantry about how the IRS doesn't currently accept shares as payment for taxes. If laws can be written to add wealth taxes on stocks and bonds, they can easily have a clause to allow payment in kind. Address the question I'm actually asking.
$24 B unaccounted for and lost that was supposed to be for homelessness. $12 B already spent on high speed rail and they want $120 B more. $50 B in EDD unemployment fraud during the pandemic.
This is just in California in the last year or two.
How much more fraud and corruption and incompetence is there that we just don't know about?
There is no way I will agree to any increase in taxes just to see it wasted and going to corruption and political buddies on every side of the aisle.
Zero taxes is the only right answer. Any talk of taxation means that you have already given in to being exploited, because it's a slippery slope. Let's be realistic - corruption will never end. The only way to reduce it is to starve the beast.
The point is to lower the economic power of single individuals that compete against the entire rest of the nation.
(I'm in agreement with the thesis of the article)
Read somewhere that SF spends roughly 50k$-80k$ per homeless person per year.
Taxing more doesn't solve a massively inefficient system at it's core. Just like US education, we spend more than any country on earth, why is it still bad?
Answering that question with a "if only we had more money" is a really poor argument. The CA tax fundamentals are bad, pooring more cash onto the fire will not fix that.
The population that's already living in those houses?
Note that "native-born Californians are ~37% of San Francisco County. That percentage has remained relatively flat over recent decades"
natural population change was positive in San Francisco County, CA, with births exceeding deaths by 574
I think it's more socialist/communist motivation to seize production I don't think they care about the rich as much as control.
In addition, there should probably be changes to laws/regulations to address companies that exploit the poorest.
And, many people who are poor have persistent mental/physical disabilities, so part of that spending is because many of these people have it the hardest.
With that said, we could likely fix all of these things and significantly unequal wealth distribution would still result in a lot of poverty.
This same thing was observed during the Gold Rush in California in the 1800s; extreme wealth also resulted in extreme poverty. And there's a great way to solve this: tax the land and redistribute it equally to everyone. Land can't be moved, it's something that belongs to all of us, and you can't make more of it.
Economic land is any capital that has a fixed amount, that you can't make more of. When the local governments in the Bay Area started capping the amount of buildable square feet, they greatly accelerated inequality by converting regular living space and working space into economic land, just like the real land it sits upon.
This is why economic inequality skyrocketed so much. Rentierism resulted in so much being stolen from anybody who doesn't own the land, and blocks out so many people from even having access to the economic system.
In contrast when you have enormously wealthy people like Marc Andreessen fighting against higher density zoning there is no such excuse and it's pure greed. Nothing could actually be an existential disruption to the wealthy in the same way. There is no reason to listen to the rich like Andreessen at all.
The equitable thing would be to focus on redeveloping wealthy homeowner areas and limit redevelopment in areas occupied by poor renters, but somehow that option never seems to be on the table. Only the reverse.
If anything, these "tenant" groups only advocate for the interests of a small subset of tenants, those who have their forever home, and do so at the expense of tenants in general. It's "pure greed" too, at the expense of others in their same general social, economic, and political class!
I say this as someone who continues to advocate alongside tenant groups on policy for better protections, for rent registries, etc. And as someone who spent many years giving small donations to local tenant advocacy groups. At least Andreesen is transparent in his greed, and not hiding it. I regret all those years of donations to the groups that hurt people, but when it comes to the few good things they do I'll be there with them still. Marc Andreesen and the wealthy funders of "tenant" groups are not harmed at all by better tenant protection policy, but boy are they harmed if real power were handed back to tenants in the form of having enough housing, and therefore ultimate power over the landlords.
> They are nearly 100% funded by wealth foundations that have exactly the same motivations as Marc Andreesen, and the people carrying out the wishes of the wealthy foundations are merely woke-washing really bad behavior.These "tenant" groups fight the types of change that would redevelop wealthy areas, precisely because of their funding sources, and they do it just as hard if not harder than stopping housing going up in other areas.
Certainly not the case in my jurisdiction of Vancouver, where such political groups (eg. COPE) have explicitly advocated for apartment development in the wealthiest areas of the city. Maybe this is the case somewhere but a big [citation needed] here. If there are somewhere tenant advocacy orgs that aren't in favour of turning low density detached homes into apartments for workers that's certainly not one I recognize.
> If anything, these "tenant" groups only advocate for the interests of a small subset of tenants, those who have their forever home, and do so at the expense of tenants in general. It's "pure greed" too, at the expense of others in their same general social, economic, and political class!
Yes this is the point of my last comment. The solution is to increase the amount of people who have their forever home. The most equitable way to do that is to "destroy" the forever homes of the very rich for whom that is really no big disruptive deal, not to destroy the forever homes of the poor for whom it would be incredibly existentially disruptive. It is not "greedy" for people to want to keep their toehold on their long term home. To be clear the stakes here are not simply moving somewhere else but being priced out of the city entirely.
Landlords could have collectively agreed to keep rents at $1K/month and not lobby against building more housing complexes, but they decided to be greedy instead.
I think one could argue that taxation should be higher, and harder to dodge, and I would agree with that.
But once you start saying that some people shouldn't have more than others to some degree, that's a very slippery slope. Where do you draw the line? Why is it okay for middle class Americans to buy nicer clothes and move into bigger apartments when people are out there starving? If it's not okay for someone to have the net worth of Qatar, why would it be okay for someone to live in an apartment that's worth more than a poor township in South Africa?
At some point we have to accept that inequality exists, and that although almost everyone could do something to minimize it, there's an ethical and practical line that needs to also respect individuality to a large degree, if we want people to feel incentivized to do things, to feel ownership, to maintain autonomy. And where to draw that line is tough to say exactly, but it probably shouldn't be a line, it should probably be smooth, or at least smooth-ish. So I feel like we're just coming back around to progressive taxation. Which we already have.
That, exactly, is the problem. It's not even about money and tax evasion but power. Why should one person have more say over the company they work for than 10,000 other employees? Or even worse they don't even work there anymore and just control it from outside?
Even if they are a perfectly good and business smart person who never makes bad decisions or abuses their workers. They will eventually die or sell their share, and in either case it will end up with people who care less about the company's long term health than the founder did. Profit maximizers with no ethics and no feeling of responsibility.
I think the concept of shareholders is the problem. Layoffs, cartels and price inflation happen when the people who make decisions get all the benefits but none of the downsides. If it was up to me I would ban stocks and replace them with time limited shares that give you a right to part of the profits for 1 or 5 or 10 years, but zero control over the company. Leave power to workers and returns to investors but never bind the two together.
Why shouldn't they?
That's how pretty much every organization works. Every military, every government, every sports team, every space mission, every classroom, etc., they all have some person or small group up people with more more decision-making power, or "more say," as you put it.
I fail to see the problem with that. In fact, there's a very real benefit in that it's generally more effective. For example, today people are completely free to create organizations that work differently, and they rarely choose to, and when they do, they rarely out-compete the alternative. So the proof is in the pudding that there's something less effective about it.
If I had to wager a guess: decision-making isn't something that scales well. Bodies might have dozens of organs, but they only really need one brain to control them all.
> They will eventually die or sell their share, and in either case it will end up with people who care less about the company's long term health than the founder did. Profit maximizers with no ethics and no feeling of responsibility.
1. There are plenty of counterexamples where the leader of a company ensures its long-term success after their tenure ends.
2. Even if this were somehow a downside of owner-led companies, you always have to ask the question, "...compared to what?" It's not like the alternative doesn't have its own slew of downsides, as evidenced by the dearth of competitive co-ops that compete successfully with owner-led companies. In other words, organizations are always going to have issues and errors and flaws, no matter how you set up decision-making.
After all, businessmen often use strategies like aiming to be acquired/purchased by a much larger company, merging with their competitors or partners, or anticipating bankruptcy by draining every viable resource and asset they can reach.
At the same time, observers such as JB Crawford have also pointed out that very large corporations function like a religion. For example, telecommunications. https://computer.rip/2024-09-08-private-lines.html
Of course I mean this metaphor internally, as if we were regarding each corporation as a sovereign microstate, which they aren't... hopefully...
If the ideal CEO has psychopathic qualities, and the ideal capitalist corporation is comparable simultaneously to a new religious movement and fascist organ, and the corporations are the primary unit of American culture, then where does that leave us?
If we need revenue to fund useful government programs, great, let's tax Larry. But I don't understand what problem is solved by expropriation qua expropriation.
it does have monopoly power and anticompetitive power all over the place though.
google bans are quite intrusive, but google could pretty easily with their graph knowledge apply secondary or tertiary sanctions, at which point you would not be able to do much of anything, same as if the US government sanctioned you
Yes. They should be broken up because competition is good for consumers and society. If we had functional anti-trust enforcement Google would not have a near-monopoly on search ads where they own both the ad inventory and the marketplace where you have to buy those placements.
The question of a fair tax burden for the ultrarich is a separate (but related) one from "how big is too big?" for megacorps.
In theory, maybe, but in practice that is not what happened over the past decade(s). Instead our retirement funds are paying it back.
When the market grows it makes the collateral worth more, which lets the holder keep refinancing the debt instead of selling assets and realizing taxable gains. As long as the assets appreciate faster than the debt grows, the borrowing can effectively roll forward for decades. Eventually the estate pays the debt out of the assets themselves, but this is not necessarily out of taxable income earned during the person's lifetime. The US markets has seen exceptional genuine growth, but the trillions of 401(k), IRA, etc money flowing in to them over the last 40 years is no small consideration.
> Well, why does something have to be done about this, exactly?
The something here is what's required to have a functional tax system. Without addressing this situation I do see an argument that we have one. How important that is to one is another question.
he doesnt necessarily have to pay it back either. he could just take out another loan against his same now higher valued assets to pay off the old loan
And this is not just theoretical. Larry Page has already sold and paid taxes on tons of stock in reality.
like, if a company's market cap gets too big, the law should stop applying to them? they should be allowed to start their own militaries and enforce martial law a la east india company?
how does a founder keep a single digit of their company after theyve been dead for a thousand years?
These arent nearly as absolute as you are making them to be.
a founder can keep their percent by paying their taxes with other money they have, or by decreasing the worth of their company. theyre a founder, they have control. Maybe founders wont be so keen to enshittify their products if theres a downside to continued growth forever. considering google dropped "dont be evil" in exchange for making larry page's 1% grow for the sake of growing, how's society at large benefiting from continuing to subsidize it?
Larry would still be rich as heck, but probably... less rich..
The broken tax system is that I get taxed about 50% on my marginal income dollar --- the system doesn't wait for me to spend it first --- but when his stock portfolio appreciates by a dollar, he's not taxed! Not until he sells in order to spend. Why are we taxing labor so much more than capital?
And no, I don't think that inventing pagerank really entitles two people to $200B. Although in their case I don't think they've done as much harm with it as some other billionaires.
And, sure, super-rich people can in theory use the appreciated stock as collateral for loans and not pay taxes, but in practice Larry and most other centi-billionaires actually sell loads of stock and pay a lot in capital gains taxes because having your status as super rich dude who owns a huge yacht be totally dependent on Google's stock price is a dumb risk to take on, and it's worth paying some taxes to eliminate that risk.
No.. many cents of it are withheld, by law.
Elon uses his vast wealth to influence, intimidate, and generally get away with lawlessness. He effectively took huge loans from banks to buy a giant bullhorn in Twitter. Those loans are collaterized by unrealized capital gains. And more generally, billionaires have the ear of politicians because of what they could do with their money. So you don't need to realize gains (gains which are taxed at a more or less flat rate!) to make use of your wealth.
Though like I said, Larry is not really a bad guy in the world of billionaires. I would only support taxing him more than I would support levying additional taxes on w2 income assuming CA actually had a provable need for more money. (Right now I think they waste most of the budget.)
"Let someone"? I guess the right to pursue one's happiness is not all that self-evident after all. One should first ask permission, and, if we are in a good mood, we might "let them" pursue their happiness.
yes... this is called the law...
Lots of peoples "pursuit of happiness" is hindered by the law because we've deemed it not good for society.
I actually lived in a society where this was illegal and we were all starving and freezing.
Meanwhile, when you're in an "already too late" situation, it's already too late. You still have to deal with it.
While stock markets provide useful liquidity for investors entering and exiting positions, they are also rampant with finbro kids doing nothing more than jumped-up gambling. We don’t know which market trades fall into the serious wheels-of-capitalism bucket, and which are gambling, because we don’t have to know. The real world works in dollars so, to date, the state taxes people on the realized capital gain in dollars.
If a bunch of kids are selling handfuls of leaves to each other for a nickel each is the state now valuing my unkempt forest at $99bn? The state is welcome to pull up a chair and watch me try to sell 5 kilotons of leaves to every kindergarten playground in the country. If I succeed then it will take its cut of the capital gain. If I fail, it will not.
When the state starts looking inside the market black box and guesses, based on little Johnny and Becky’s recent playground trades, that I might be able to get at least $300 a tonne for my damp, rotting leaves, then the state is doing something at best weird and at worst unfair, and states doing unfair things is really bad.
Fix the system properly: when you inherit stock, you inherit the cost basis as well. Rinsing off capital gains liabilities through “buy/borrow/die” is the real villain here.
Absolutely not. 100% you can take it.
It's only too late if you're timid and wimpy.
"I'm passing this law that is effective the exact millisecond I sign it, tough shit if you don't like it" is tyranny and despotism. But based on your comment I think you know that.
A wealth tax is not a retroactive law, nor something that targets an individual person. It's a "general law" in your parlance. Think about it.
> If you pass a general law (which could very well have reasonable objections), people have to have a chance to leave.
I don't think so. By what legal authority is that required?
> "I'm passing this law that is effective the exact millisecond I sign it, tough shit if you don't like it" is tyranny and despotism. But based on your comment I think you know that.
No, it's not, and don't be ridiculous. When they passed laws against date-rape, would you have judged it "tyranny and despotism" unless the law was delayed to give the date-rapers time to finish up the date-rapes they'd planned?
There's no justice in giving the wealthy the maximum opportunity to pick and choose the laws that apply to them.
ultrawealthy people just cant spend as much or give useful market signals the way the masses can
its hyperbolic to say laws that are active when passed are tyranny and despotism
They did give people that chance.. That's kind of what the entire article is about. They literally did leave.
if the voters and legislature have the “bravery” to pass the wealth tax law, it will be aggressively enforced by the FTB
the second-order effects, whatever they may be, would be clearly visible within a couple years.