4 ms·

If Mark Zuckerberg and his wife is hit by a truck tomorrow. Is the US government taking over FB? Cause I don't see the kid getting $50 billion to pay the tax bi

by NhanH 10y ago

If Mark Zuckerberg and his wife is hit by a truck tomorrow. Is the US government taking over FB? Cause I don't see the kid getting $50 billion to pay the tax bill.

morgante 10y ago
Obviously, he can sell stock to pay the tax bill. Or the government could directly take ownership and sell the stock. We have an existing estate tax. It's not a novel concept.
- NhanH 10y ago
  You're proposing that a) Selling $50 billion worth of stock in a company, b) Government takes ownership of Facebook, or some combination thereof of the two actions. Yes, it is novel to do that.
  - morgante 10y ago
    I didn't suggest that the government should own Facebook over the long term. It should simply impose a tax on the estate, which would require that stock be liquidated to meet that obligation. There's already a 40% inheritance tax. How do you think it works in the status quo?
    - NhanH 10y ago
      The difference is in the number. 40% means that I can realistically leverage my own share of the stock to get money and pay the tax. 100% means that I walk away and the government can figure out what to deal with the ownership.
      - morgante 10y ago
        I don't know why you think it would be so hard for the government to deal with the ownership. There are plenty of people who would be interested in buying Facebook stock. Plenty of estates have to be liquidated to settle debts and taxes today. It's hardly unprecedented.
        NhanH 10y ago
        No it isn't precedented. Ownership of a company is a lot different than real estates or other physical wealth. It would take years to sell off $50 billion of stocks without crashing the company. Even if they are patience and manage to do that, alot of people, myself included, would have trouble with the government being in de-facto control of the company. If you dismissed either of the two reasons above, I guess I don't see a point in continuing the discussion.
        morgante 10y ago
        Uh, do you honestly think that estates never include equity holdings? I agree. It's not worth continuing this discussion if you believe that it takes 10 years to sell off $50 billion of stocks.
- prostoalex 10y ago
  The economic incentives that come with high estate tax encourage rent-seeking and quick cash-outs versus long-term building. Russian oligarchy is an illustration of this - the inheritance tax is effectively 100%, with the understanding that the property can be taken and re-gifted away any day, so most enterprises are stripped of their cash as soon as possible with money redirected towards conspicuous consumption.
  - morgante 10y ago
    Stripping enterprises of their cash quickly is hardly an example of rent-seeking. If money is directed towards conspicuous consumption, it recirculates into the economy. I definitely consider that superior to inflating unearned fortunes. The Russian example seems to be more a testament to the danger of unstable political regimes, not the problems of a high inheritance tax.

by NhanH 10y ago

If Mark Zuckerberg and his wife is hit by a truck tomorrow. Is the US government taking over FB? Cause I don't see the kid getting $50 billion to pay the tax bill.

morgante 10y ago

Obviously, he can sell stock to pay the tax bill. Or the government could directly take ownership and sell the stock. We have an existing estate tax. It's not a novel concept.

NhanH 10y ago
You're proposing that a) Selling $50 billion worth of stock in a company, b) Government takes ownership of Facebook, or some combination thereof of the two actions. Yes, it is novel to do that.
- morgante 10y ago
  I didn't suggest that the government should own Facebook over the long term. It should simply impose a tax on the estate, which would require that stock be liquidated to meet that obligation. There's already a 40% inheritance tax. How do you think it works in the status quo?
  - NhanH 10y ago
    The difference is in the number. 40% means that I can realistically leverage my own share of the stock to get money and pay the tax. 100% means that I walk away and the government can figure out what to deal with the ownership.
    - morgante 10y ago
      I don't know why you think it would be so hard for the government to deal with the ownership. There are plenty of people who would be interested in buying Facebook stock. Plenty of estates have to be liquidated to settle debts and taxes today. It's hardly unprecedented.
      - NhanH 10y ago
        No it isn't precedented. Ownership of a company is a lot different than real estates or other physical wealth. It would take years to sell off $50 billion of stocks without crashing the company. Even if they are patience and manage to do that, alot of people, myself included, would have trouble with the government being in de-facto control of the company. If you dismissed either of the two reasons above, I guess I don't see a point in continuing the discussion.
        morgante 10y ago
        Uh, do you honestly think that estates never include equity holdings? I agree. It's not worth continuing this discussion if you believe that it takes 10 years to sell off $50 billion of stocks.
prostoalex 10y ago
The economic incentives that come with high estate tax encourage rent-seeking and quick cash-outs versus long-term building. Russian oligarchy is an illustration of this - the inheritance tax is effectively 100%, with the understanding that the property can be taken and re-gifted away any day, so most enterprises are stripped of their cash as soon as possible with money redirected towards conspicuous consumption.
- morgante 10y ago
  Stripping enterprises of their cash quickly is hardly an example of rent-seeking. If money is directed towards conspicuous consumption, it recirculates into the economy. I definitely consider that superior to inflating unearned fortunes. The Russian example seems to be more a testament to the danger of unstable political regimes, not the problems of a high inheritance tax.