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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 wea

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.

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.