I know this is a very common technique that people use to effectively liquidate assets without incurring taxes, but I think it can (and should be!) solved without penalizing people who simply hold an asset.
254 karma · joined January 29, 2025
I know this is a very common technique that people use to effectively liquidate assets without incurring taxes, but I think it can (and should be!) solved without penalizing people who simply hold an asset.
Any claim of valuation is really only meaningful as a purchase offer.
Early stage companies have a high valuation on paper as an artifact of selling small amounts of equity for relatively large sums of money. This leaves you with purely theoretical wealth in the form of equity which you have not yet sold, and potentially can't sell.
As a concrete example, let's say your tax rate is 15%. If you start a business, and give an investor a 10% stake in that business in exchange for $1M, your remaining 90% stake in the company is now worth $9M. Congratulations, you're wealthy! Now you need to "pay your dues" of 15% of that $9M... good luck with that. You are now bankrupt and deeply in dept to the government.
If I buy a house for $100k, and next year some idiot pays $1M for a very similar house three streets down, did I just magically make $900k? Should I be taxed on that gain immediately? Should I be forced to sell part of my property to cover it? What happens when that sale occurs at a much lower price, due to my need to liquidate, did that lower the prices of all the houses in the neighborhood back to normal? Does only the first person to actually pay the tax owe the tax?
That's the reasoning we're applying if we tax unrealized gains on stocks (or any other asset). We take what the highest bidder is willing to pay for some tiny percentage of an asset, and assume that means everyone else could get the same price, yielding these theoretical valuations that have no bearing on reality.
Property taxes have a similar problem but that is a whole other can of worms. I'd love to live in a world where the local tax assessor is obligated to purchase your property on demand for 80% of what they say it is worth -- surely they would jump at the chance to realize an instant profit, right?
You simply can't establish value without an actual transaction. Without a buyer and a seller you are just making up numbers.
Wealthy people and large companies do generally employ security, but that is merely supplemental. They enjoy the backdrop of a society where the vast majority of people at least recognize the basic concept of ownership, and where protection from external state actors is provided. More to the point, they live in a system where most people see negative expected return from just killing them and taking their stuff
Abstractions like insurance further require a system where agreements can be made and mostly enforced, and where the need for the insurance is low enough for the premium to be workable.
The small security team at any given company is there to handle the the exceptions that don't conform to the larger society's rules. It doesn't replace that protection entirely. You'd need a standing army for that, and you'd have to work full time just to maintain its loyalty.
Even with no direct services whatsoever, people benefit from society in more or less direct proportion to their wealth -- and arguably the benefit accrues exponentially as wealth increases, given that this enables the exponential growth of capital.
I don't share your fatalism, but I can't criticize it. It is an understandable position. With that said, if your desire is truly to remove yourself from existence in the aftermath of such an event it is better to have some plan to do so already laid in. The majority of immediate casualties will not be deaths, you are very likely to regret relying on the weapons.
That would also grant you the chance to reconsider whether the resulting world is actually not worth living it -- or at very least to confirm that it is in fact so bleak.
The reality, to me, seems to be that universities sell credentials with learning as a sort of sideshow or window dressing.
I've met a lot of excellent engineers who didn't have degrees. I have met a lot of terrible ones who did. I can tell you which group has an easier time getting hired... and I don't think I am focusing on edge cases. The system is broken.
So do whatever you have to to get that permission slip to work from the education-industrial complex. By all means, please learn your trade as well, but let's not pretend like "knowledge" is what you are paying six figures for at a university. Knowledge is available for free. It's certification that costs as much as a house.
I wouldn't describe the entire series as torture-porn just for that, personally, though I would agree that the work would be better if they were removed or at least toned way down.
In any case the corporate entity as a whole is not conscious. A strictly behavioralist approach is appropriate there. If it does the good thing it gets the carrot, if it does the bad thing it gets the stick. We can't win it's heart and mind because it has neither, so we have to settle for keeping it's behavior in line.
This is an interesting point, and it certainly affects the incentives involved and the amount of resources allocated to mitigating the problems.
I do think cyber security incidents with real consequences are likely to become more common going forward (infrastructure etc). We haven't experienced large state actors being malicious in a war time footing (yet).
Will we able to better mitigate attacks given better incentives? I think that is an open question. We will certainly throw more resources at the problem, and we will weight outcomes more heavily when designing processes, but whether we know how to prevent cybersecurity incidents even if we really want to... that I wonder about.
Cybersecurity is about adversarial hazards. When you mitigate them they actively try to unmitigated themselves.
It is more analogous to TSA security checks than to FAA equipment checklists. The checklist approach can prevent copycats from repeating past exploits but is largely useless for preventing new and creative problems.
They do not solve the problem of getting people to think things through and recognize novel issues.
There are some jobs you can't do well. You can do them adequately or screw them up. Checklists are helpful in those jobs.
I seem to be a conscious entity, and I have access to the physical memory store in my brain, but am "I" actually going to survive falling asleep tonight? Or am "I" like a fire that gets extinguished, with a new one to be lit in my place tomorrow morning, using the same pile of half burnt logs?
The old sci-fi/philosophy teleportation question addresses this with the concept of physically destroying and reconstructing a body, but I don't know if we need near magic tech to elicit the problem.
We turn our conscious selves off for periods of deep sleep every day (or two, or three... but there is a definite limit). Do we really survive this transition?
This might get better in the future though. We seem to be reaching the end of technology's exponential growth phase (famous last words, I know). Perhaps the pace of change will slow and standards will start lasting longer as a result.
I know that this is the entire point of limited liability corporations -- to divorce ownership from responsibility -- but maybe that wasn't such a good idea.
Apple is still doing business, has three years of profits from the malicious compliance, and appears to have attracted not much more than a sternly worded letter from a judge, and possible criminal contempt charges for a couple of individuals.
What real world consequences does Apple face for this behavior?
In general that cost doesn't scale linearly with size, so bigger companies are proportionally less impacted.
Sometimes an attempt is made to compensate for this by exempting organizations under a certain size criteria.
#1 seems more probable given a human being that has been selected to head one of the most valuable companies on the planet. That's his entire job -- to play a carefully crafted role for the public, the share holders and the media. He isn't paid to stand up at a shareholder meeting and let any sort of genuine feelings slip through, unless those feelings happen to be the right ones for that role at that moment.
The single example that ascended to be the CEO of Apple though? That selection process would seem more relevant than any personal background.
My base assumption is that any impressions we have about Tim Cook (or any other executive of a company that size) are a carefully crafted artifact of marketing and PR. He may be a real person behind the scenes, but his (and everyone's) media persona is a fictional character he is portraying.