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This bill on the face of it is pretty dumb. Most billionaires do not have liquid assets that are easily converted into money. In fact, most of the people's weal

This bill on the face of it is pretty dumb. Most billionaires do not have liquid assets that are easily converted into money. In fact, most of the people's wealth increased due to their company stock price increasing. In order to pay these bills, the people would likely have to break sec laws to sell the stock quickly since there are all kinds of rules in this area. And if they get around that and are forced to sell large amounts of their holdings in companies, I imagine the stock market would crash, or have a local crash. And almost assuredly the stock wouldn't be worth nearly as much, so they would be forced to liquidate nearly everything they own to pay this tax bill. I also imagine these billionaires will find some loophole or simply sue the government and keep this in the courts for years while they figure out a way to nullify it. Honestly, this whole thing is a publicity stunt because the backers all know it has no chance of ever happening. Then they can pretend they care, and that they tried to do something. While in reality, they are doing nothing and never had any plan to do anything achievable.

onetimemanytime 6y ago
well, in theory they can hand their share in company stock to the govt, adjusted for any taxes or whatever. Based on the stock price of the days the bill is passed for example, or x days before. The government then sells or holds it, as it sees fit. That is not a problem, whether it should be passed it is. (I agree that this is a dumb law, taxes should not be a one off thing. If they need to be raised, do it but for all)
- gremlinsinc 6y ago
  We need to move from income to VAT, and maybe land value tax. Then we'll have a much stronger baseline to pay for UBI and single payer. VAT would collect sales tax from everybody including immigrants, so nobody can claim they're mooching. Could make VAT more for non-citizens.
sho 6y ago
What a defeatist attitude. Instead of snarkily poking holes, where's your better solution? Because there has to be a solution. Inequality is reaching levels where it's dangerous. No, it is not good nor stable for 1% of the population to control 99% of the assets, and we'll get there soon enough. Redistribution will happen either by law or by knife and gun. This is not about who earned what or what was inconvenient for XYZ person. This is about the citizens of the country, supposedly equal under law, having no chance whatsoever of ever owning an equal part. It's about aristocracy, basically. And do we all remember how aristocracies end? Real life is not some computer model. In real life, if a father of 6 cannot feed or house his children he will not be satisfied by you saying that "well, Jeff Bezos outcompeted you!". There will be a redistribution. Our only choice is how it happens. This is an attempt.
- babesh 6y ago
  It is not snarky to poke holes. It is snarky to call someone snarky for pointing out issues. You don’t always have to come up with a solution immediately. That would be stupid. Basic income via the printing of money. What do you think those $600 checks were? Inheritance tax. Make education at public schools and universities free. Reform government for greater efficiency.
  - sho 6y ago
    All excellent ideas, and inevitable, IMO.
  - babesh 6y ago
    Universal healthcare.
  - Darmody 6y ago
    Printing money is very risky. The US has the stability to print a lot of money but I'm afraid printing money forever would end up with a huge inflation. Hi Weimar Republic. Hi Venezuela.
    - sho 6y ago
      I guess you have not heard of Quantitative Easing?
      - Darmody 6y ago
        I've heard of it. The question is, have you? Because inflation is precisely the biggest problem when it's applied. It works on certain scenarios but it's not a long term solution.
        sho 6y ago
        I guess I have heard of it since I mentioned it So, where's the inflation because of it? Or are you going to STFU
sudhirj 6y ago
The bill also doesn’t explain what will happen if price of these stocks crashes and the billionaires lose $100B or whatever in a day. Does the government give the money back? Does Bernie not realise that stocks aren’t liquid assets that have already been sold? If he buys a house and it increases in value, or the government doesn’t demand that he sell the house or take out a mortgage and pay 60% of the increase as tax. The governments waits until he sells the house and then taxes the income. If it’s okay to tax people whose assets increase in value without liquidation then shouldn’t every baby boomer sitting in a million dollar home that they bought for 10k or whatever be forced to pay a tax as well?
- iso947 6y ago
  > shouldn’t every baby boomer sitting in a million dollar home that they bought for 10k or whatever be forced to pay a tax as well? Yes.
- Joeri 6y ago
  Please don’t equate owning a single home to owning millions of shares. The notion that these types of wealth are all the same and should be under similar rules is toxic.
  - AnthonyMouse 6y ago
    They are the same. Suppose you're the founder of your company. You sold a 40% stake to investors to raise capital to get started, but it's still 60% yours, so you have control of the company. If you're required to liquidate your shares to pay the tax on them, you lose control of the company -- which in turn could cause the stock to crash because investors trust the founder more than the random MBA they can expect mutual funds to install. And stocks can be volatile. If the company is worth $50B in June, $100B in December and then $50B again in January, did the owner ever really have that much wealth? Do they get the money back from the government next year? Do they get the shares back? Meanwhile nobody is even bothering to do the math on this from the perspective of the government. Because the government can borrow money at close to 0% interest, while index funds have been giving >4% average annual returns, which means taking the money today instead of borrowing it today and taking it whenever they actually sell the shares (including the share appreciation in the meantime) would require the other taxpayers to pay more to make up for the loss of government revenue that would cause.
ImaCake 6y ago
I don't know. Even if it is ultimately unviable it does something no one in the US has dared to do for a long time. Which is to actually go after the wealth accumulated by the rich. I think the US will see more of this kind of thing over the next few years and it will be incredibly popular with the millions of very poor Americans looking to get back at the rich. The leaders of the US would be wise to handle such things carefully if they want to keep capitalism alive.
- mansion7 6y ago
  Since half of the US pays 95% of the US taxes, with the top 5% paying almost 60% alone, it would appear that the poor need the rich much more than the other way around, and that capitalism is a great boon to them. It would behoove them not to scare away the tax cows that pay for their schools, medical care, infrastructure, and create the economy that allows even the very poor to enjoy lives that are the envy of much of the rest of the world.
  - ball_of_lint 6y ago
    I think you have that backwards. There's enough land and natural resources in the US that not only can all of our citizens live, but there is so much extra besides that over half of all taxes are paid by 5% of our population. Considering that right now many people are homeless, jobless, or without health insurance, we need to seriously consider the balance of power and wealth in the US. A better and more equitable society would address those problems in strong and comprehensive ways. If building that society scares away a billionaire or two, so be it; the US has enough wealth even without them.
joe-collins 6y ago
Yes, the wealthy will always find loopholes to shield some fraction of their wealth from taxation. I don't recall the exact source (and it's a nightmare to search for), but I read that the maximum effective tax rate, historically, is somewhere in the ballpark of 30% as a result of that behavior. (I would welcome a link if anyone recognizes this argument.) Seen through that lens, applying higher statutory rates and more complex policies isn't driven by the realistic expectation that those rates will be paid in full. Rather, as some number of the very wealthy will fail to perfectly adjust to the new regime, even small increases in the rate collected are substantial increases in the absolute dollar amount.
- Wolfenstein98k 6y ago
  Which should be carefully weighed up against the costs of the policy (namely collection costs, think about how you value art and stocks and who is going to do that, and how... and when it's valued... and what incentives that produces for the owner...). Not to mention the "trust" aspect for those who are wealthy. It will guarantee preemptive shielding and other arrangements which ultimately just add further mud to the US economic system. Not worth a fistful of dollars to be frittered away on general expenditure anyway. IMHO.
  - joe-collins 6y ago
    The pressures you describe induce diminishing returns, but they are still returns (up to the point that some threshold kicks in and the marginal gain goes straight to zero).
jtolmar 6y ago
It's not a very well-designed bill. A big one-off tax is always just a political stunt. But "stock isn't liquid money!" comes up every time anyone mentions wealth taxes, and I think it's worth digging into this a bit. Stock ultimately derives its value from the attached ability to vote on what the company does (a policy of "maximize profits, buybacks+dividends" is so popular that it's usually implied). So when socialists go around talking about spreading control of the means of production around, stock is what that control looks like in our society. So if we're talking about a mass sale of stock reducing the price, that implies somebody is buying the stock at that new lower price. It's not the billionaires, since they're in the middle of trying to sell all their stock. But no stock is being destroyed either; it has to be going to someone with less net worth, and thus less concentrated ownership of stock. Which is, again, the thing that socialists are trying to do. (Now, as a market socialist, I can think of better ways to do this than forcing the sale of a bunch of stock and hoping it gets spread around more equitably. I did say start with "It's not a very well designed bill.")
- robjan 6y ago
  Taking control from companies like this wouldn't work. All you have to do is split shares into voting and non-voting shares and only liquidate the latter to pay this hypothetical tax.
- bleah1000 6y ago
  The problem is you've now screwed all of the people who own the stock. So you diversify the ownership of this particular company, but all of the mutual funds, and other people who own the stock just get to suffer a huge loss? And what prevents another entity from buying up a huge portion of the stock using a different company? This new entity could be controlled by some other billionaire or group and you gained no diversity at all.
- DuskStar 6y ago
  > So if we're talking about a mass sale of stock reducing the price, that implies somebody is buying the stock at that new lower price. It's not the billionaires, since they're in the middle of trying to sell all their stock. But no stock is being destroyed either; it has to be going to someone with less net worth, and thus less concentrated ownership of stock. Which is, again, the thing that socialists are trying to do. I bet it would be billionaires buying the stock, actually. Just not US ones.
llamaz 6y ago
I'm genuinely curious, how do you think this worked? https://en.wikipedia.org/wiki/Revenue_Act_of_1935 https://en.wikipedia.org/wiki/Revenue_Act_of_1935
- DuskStar 6y ago
  > It was a progressive tax that took up to 75 percent of the highest incomes (over $1 million per year.). It wasn't a wealth tax, as understood today.

onetimemanytime 6y ago

well, in theory they can hand their share in company stock to the govt, adjusted for any taxes or whatever. Based on the stock price of the days the bill is passed for example, or x days before. The government then sells or holds it, as it sees fit. That is not a problem, whether it should be passed it is. (I agree that this is a dumb law, taxes should not be a one off thing. If they need to be raised, do it but for all)

gremlinsinc 6y ago
We need to move from income to VAT, and maybe land value tax. Then we'll have a much stronger baseline to pay for UBI and single payer. VAT would collect sales tax from everybody including immigrants, so nobody can claim they're mooching. Could make VAT more for non-citizens.

sho 6y ago

What a defeatist attitude. Instead of snarkily poking holes, where's your better solution? Because there has to be a solution. Inequality is reaching levels where it's dangerous. No, it is not good nor stable for 1% of the population to control 99% of the assets, and we'll get there soon enough. Redistribution will happen either by law or by knife and gun. This is not about who earned what or what was inconvenient for XYZ person. This is about the citizens of the country, supposedly equal under law, having no chance whatsoever of ever owning an equal part. It's about aristocracy, basically. And do we all remember how aristocracies end? Real life is not some computer model. In real life, if a father of 6 cannot feed or house his children he will not be satisfied by you saying that "well, Jeff Bezos outcompeted you!". There will be a redistribution. Our only choice is how it happens. This is an attempt.

babesh 6y ago
It is not snarky to poke holes. It is snarky to call someone snarky for pointing out issues. You don’t always have to come up with a solution immediately. That would be stupid. Basic income via the printing of money. What do you think those $600 checks were? Inheritance tax. Make education at public schools and universities free. Reform government for greater efficiency.
- sho 6y ago
  All excellent ideas, and inevitable, IMO.
- babesh 6y ago
  Universal healthcare.
- Darmody 6y ago
  Printing money is very risky. The US has the stability to print a lot of money but I'm afraid printing money forever would end up with a huge inflation. Hi Weimar Republic. Hi Venezuela.
  - sho 6y ago
    I guess you have not heard of Quantitative Easing?
    - Darmody 6y ago
      I've heard of it. The question is, have you? Because inflation is precisely the biggest problem when it's applied. It works on certain scenarios but it's not a long term solution.
      - sho 6y ago
        I guess I have heard of it since I mentioned it So, where's the inflation because of it? Or are you going to STFU

sudhirj 6y ago

The bill also doesn’t explain what will happen if price of these stocks crashes and the billionaires lose $100B or whatever in a day. Does the government give the money back? Does Bernie not realise that stocks aren’t liquid assets that have already been sold? If he buys a house and it increases in value, or the government doesn’t demand that he sell the house or take out a mortgage and pay 60% of the increase as tax. The governments waits until he sells the house and then taxes the income. If it’s okay to tax people whose assets increase in value without liquidation then shouldn’t every baby boomer sitting in a million dollar home that they bought for 10k or whatever be forced to pay a tax as well?

iso947 6y ago
> shouldn’t every baby boomer sitting in a million dollar home that they bought for 10k or whatever be forced to pay a tax as well? Yes.
Joeri 6y ago
Please don’t equate owning a single home to owning millions of shares. The notion that these types of wealth are all the same and should be under similar rules is toxic.
- AnthonyMouse 6y ago
  They are the same. Suppose you're the founder of your company. You sold a 40% stake to investors to raise capital to get started, but it's still 60% yours, so you have control of the company. If you're required to liquidate your shares to pay the tax on them, you lose control of the company -- which in turn could cause the stock to crash because investors trust the founder more than the random MBA they can expect mutual funds to install. And stocks can be volatile. If the company is worth $50B in June, $100B in December and then $50B again in January, did the owner ever really have that much wealth? Do they get the money back from the government next year? Do they get the shares back? Meanwhile nobody is even bothering to do the math on this from the perspective of the government. Because the government can borrow money at close to 0% interest, while index funds have been giving >4% average annual returns, which means taking the money today instead of borrowing it today and taking it whenever they actually sell the shares (including the share appreciation in the meantime) would require the other taxpayers to pay more to make up for the loss of government revenue that would cause.

ImaCake 6y ago

I don't know. Even if it is ultimately unviable it does something no one in the US has dared to do for a long time. Which is to actually go after the wealth accumulated by the rich. I think the US will see more of this kind of thing over the next few years and it will be incredibly popular with the millions of very poor Americans looking to get back at the rich. The leaders of the US would be wise to handle such things carefully if they want to keep capitalism alive.

mansion7 6y ago
Since half of the US pays 95% of the US taxes, with the top 5% paying almost 60% alone, it would appear that the poor need the rich much more than the other way around, and that capitalism is a great boon to them. It would behoove them not to scare away the tax cows that pay for their schools, medical care, infrastructure, and create the economy that allows even the very poor to enjoy lives that are the envy of much of the rest of the world.
- ball_of_lint 6y ago
  I think you have that backwards. There's enough land and natural resources in the US that not only can all of our citizens live, but there is so much extra besides that over half of all taxes are paid by 5% of our population. Considering that right now many people are homeless, jobless, or without health insurance, we need to seriously consider the balance of power and wealth in the US. A better and more equitable society would address those problems in strong and comprehensive ways. If building that society scares away a billionaire or two, so be it; the US has enough wealth even without them.

joe-collins 6y ago

Yes, the wealthy will always find loopholes to shield some fraction of their wealth from taxation. I don't recall the exact source (and it's a nightmare to search for), but I read that the maximum effective tax rate, historically, is somewhere in the ballpark of 30% as a result of that behavior. (I would welcome a link if anyone recognizes this argument.) Seen through that lens, applying higher statutory rates and more complex policies isn't driven by the realistic expectation that those rates will be paid in full. Rather, as some number of the very wealthy will fail to perfectly adjust to the new regime, even small increases in the rate collected are substantial increases in the absolute dollar amount.

Wolfenstein98k 6y ago
Which should be carefully weighed up against the costs of the policy (namely collection costs, think about how you value art and stocks and who is going to do that, and how... and when it's valued... and what incentives that produces for the owner...). Not to mention the "trust" aspect for those who are wealthy. It will guarantee preemptive shielding and other arrangements which ultimately just add further mud to the US economic system. Not worth a fistful of dollars to be frittered away on general expenditure anyway. IMHO.
- joe-collins 6y ago
  The pressures you describe induce diminishing returns, but they are still returns (up to the point that some threshold kicks in and the marginal gain goes straight to zero).

jtolmar 6y ago

It's not a very well-designed bill. A big one-off tax is always just a political stunt. But "stock isn't liquid money!" comes up every time anyone mentions wealth taxes, and I think it's worth digging into this a bit. Stock ultimately derives its value from the attached ability to vote on what the company does (a policy of "maximize profits, buybacks+dividends" is so popular that it's usually implied). So when socialists go around talking about spreading control of the means of production around, stock is what that control looks like in our society. So if we're talking about a mass sale of stock reducing the price, that implies somebody is buying the stock at that new lower price. It's not the billionaires, since they're in the middle of trying to sell all their stock. But no stock is being destroyed either; it has to be going to someone with less net worth, and thus less concentrated ownership of stock. Which is, again, the thing that socialists are trying to do. (Now, as a market socialist, I can think of better ways to do this than forcing the sale of a bunch of stock and hoping it gets spread around more equitably. I did say start with "It's not a very well designed bill.")

robjan 6y ago
Taking control from companies like this wouldn't work. All you have to do is split shares into voting and non-voting shares and only liquidate the latter to pay this hypothetical tax.
bleah1000 6y ago
The problem is you've now screwed all of the people who own the stock. So you diversify the ownership of this particular company, but all of the mutual funds, and other people who own the stock just get to suffer a huge loss? And what prevents another entity from buying up a huge portion of the stock using a different company? This new entity could be controlled by some other billionaire or group and you gained no diversity at all.
DuskStar 6y ago
> So if we're talking about a mass sale of stock reducing the price, that implies somebody is buying the stock at that new lower price. It's not the billionaires, since they're in the middle of trying to sell all their stock. But no stock is being destroyed either; it has to be going to someone with less net worth, and thus less concentrated ownership of stock. Which is, again, the thing that socialists are trying to do. I bet it would be billionaires buying the stock, actually. Just not US ones.

llamaz 6y ago

I'm genuinely curious, how do you think this worked? https://en.wikipedia.org/wiki/Revenue_Act_of_1935 https://en.wikipedia.org/wiki/Revenue_Act_of_1935

DuskStar 6y ago
> It was a progressive tax that took up to 75 percent of the highest incomes (over $1 million per year.). It wasn't a wealth tax, as understood today.