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I see no reason to be alarmed. It’s highly unlikely the government would be taking from your stock directly. Requiring shareholders to pay cash equivalent to a

I see no reason to be alarmed. It’s highly unlikely the government would be taking from your stock directly. Requiring shareholders to pay cash equivalent to a percentage of their shares is reasonable, although with hyper-growth companies that don’t pay dividends, this could get tricky. Maybe it would incentivize more investment in dividend-paying companies? Also, FWIW, I think it would be better to impose a wealth tax in place of income tax, as much as possible, rather than add the wealth tax on top. Income taxes are fundamentally unfair to people with high healthcare expenses, children in college, etc. A common objection to wealth taxes is the difficulty of tracing assets. But in the Muslim world, for example, a 2.5% tax on wealth was collected more than a thousand years ago, and I would imagine most rational, even moderately wealthy people today keep most of their money with financial institutions, making the government’s job much easier than it was in the past. And the danger of people hiding their wealth in diamonds, paintings, yachts, etc. could easily be avoided with a tax on luxury goods.

nybble41 6y ago
> It’s highly unlikely the government would be taking from your stock directly. It makes no difference whatsoever whether they take the stock directly or force you to sell the stock in order to pay the tax in cash. The end result is the same—your stock is reduced by the amount of the tax.
- ralmidani 6y ago
  That is a valid concern which I acknowledged in my comment. It would probably result in investors seeking investments with an expected return that offsets the wealth tax by a decent margin, while also paying dividends. I am by no means an investment expert, but maybe those are the kinds of investments we should be encouraging people to invest in anyway? Hyper-growth, overvalued companies are often great investments, until they’re not. Edit: if we don’t want the government picking winners and losers, another option could be deferred taxation; when you sell, you pay taxes for however many years you held the stock.
cascom 6y ago
I honestly think your underestimating the amount of wealth stored in private companies, real-estate, art and other il-liquid assets
- theplague42 6y ago
  Dividends? Rental income? People own these things for a reason and it's not necessarily just raw capital appreciation.
  - cascom 6y ago
    My point is that many entrepreneurs have the majority of their wealth tied up in their business, and many people that may be worth 30m might have 10m of that in personal real estate - all of which is hard to value precisely without trying to sell it.

nybble41 6y ago

> It’s highly unlikely the government would be taking from your stock directly. It makes no difference whatsoever whether they take the stock directly or force you to sell the stock in order to pay the tax in cash. The end result is the same—your stock is reduced by the amount of the tax.

ralmidani 6y ago
That is a valid concern which I acknowledged in my comment. It would probably result in investors seeking investments with an expected return that offsets the wealth tax by a decent margin, while also paying dividends. I am by no means an investment expert, but maybe those are the kinds of investments we should be encouraging people to invest in anyway? Hyper-growth, overvalued companies are often great investments, until they’re not. Edit: if we don’t want the government picking winners and losers, another option could be deferred taxation; when you sell, you pay taxes for however many years you held the stock.

cascom 6y ago

I honestly think your underestimating the amount of wealth stored in private companies, real-estate, art and other il-liquid assets

theplague42 6y ago
Dividends? Rental income? People own these things for a reason and it's not necessarily just raw capital appreciation.
- cascom 6y ago
  My point is that many entrepreneurs have the majority of their wealth tied up in their business, and many people that may be worth 30m might have 10m of that in personal real estate - all of which is hard to value precisely without trying to sell it.