3 ms·

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

by 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.
Wolfenstein98k 6y ago
No, it's equal and fair. Bernie owns a range of houses, and my understanding is his capital gains will be levied equally on any/all of them. Which is fair. Some people like collecting houses, some like collecting stocks, some like spending on holidays. Differential taxation is an inefficient activity that conjures very perverse incentives. "Never reason from a price change."
_ph_ 6y ago
Actually, there are plenty of parallels. So yes, if you only own the home you are living in, there should be a protection against taxation. Once you own more than the home you are living in, that property should be fully taxable, as far as property by itself is taxable (some countries don't have property taxes, other have small property taxes to exactly avoid the problems of this bill). With stocks it is the same. If you own a wide-range portfolio as an investment, this could be taxed of course, but with the people listed in the article, they own those shares not because they miraculously got rich and bought these shares with their money, they got the shares because they founded and built their respective companies. They hold to their shares not for capital gains, but to keep control of their companies. In this respect it is very much like the house you own. Not to mention the disruption to the stock market, if suddenly stock in the value several hundred of billions of dollars get sold - this would especially hit the non-billionaires, that is everyone who has some savings (for retirement for example).

by 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.

Wolfenstein98k 6y ago

No, it's equal and fair. Bernie owns a range of houses, and my understanding is his capital gains will be levied equally on any/all of them. Which is fair. Some people like collecting houses, some like collecting stocks, some like spending on holidays. Differential taxation is an inefficient activity that conjures very perverse incentives. "Never reason from a price change."

_ph_ 6y ago

Actually, there are plenty of parallels. So yes, if you only own the home you are living in, there should be a protection against taxation. Once you own more than the home you are living in, that property should be fully taxable, as far as property by itself is taxable (some countries don't have property taxes, other have small property taxes to exactly avoid the problems of this bill). With stocks it is the same. If you own a wide-range portfolio as an investment, this could be taxed of course, but with the people listed in the article, they own those shares not because they miraculously got rich and bought these shares with their money, they got the shares because they founded and built their respective companies. They hold to their shares not for capital gains, but to keep control of their companies. In this respect it is very much like the house you own. Not to mention the disruption to the stock market, if suddenly stock in the value several hundred of billions of dollars get sold - this would especially hit the non-billionaires, that is everyone who has some savings (for retirement for example).