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Steve Ballmer saved $100 million in taxes selling $2B in MSFT stock
- gvb 16y agoThis is a concrete example of an intuitive fact. There is a limit to how much a government can tax the "rich." This limit will be the tax differential between locations, investment vehicles, or over time, plus the cost of moving the money. An example of tax rate differences by location is Michael Arrington: California vs. Washington (http://news.ycombinator.com/item?id=1736265 http://news.ycombinator.com/item?id=1736265). Ballmer's sale appears to be the result of a time-based tax rate differential. IRAs are also time-based tax rate differentials: the premise is that the investor defers paying taxes on the IRA investment until he retires and (he hopes) is taxed at a lower rate. Examples of investment vehicle-based tax differentials are tax free (government) bonds, Roth IRA (interest is tax-free), special "economic investment zones", etc.