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Sam's idea of taxing market cap would cause much more than the 15% depreciation than he seems to expect. Any company with a P/E of 40 or more immediately would
by colinmhayes 6y ago
Sam's idea of taxing market cap would cause much more than the 15% depreciation than he seems to expect. Any company with a P/E of 40 or more immediately would be losing money. Companies with P/E of 20 would lose half their profit. That's most companies. I would expect a 50% drop of the S&P if this policy was enacted. Even if this tax is somehow enacted it would only collect half as much as Sam expects.
- missedthecue 6y agoSam is a pretty smart guy... How on Earth does he assume that this is a reasonable idea?
- conradev 6y agoIn the paragraph before: > What follows is an idea in the spirit of a conversation starter.
- deleted 6y ago[deleted]
- TimJRobinson 6y agoCompanies could do this by creating new shares, not having to pay in cash. This could be automated by the government, each year all companies listed on a USA exchange create 2.5% new shares which are then given to the government. The government then gives these shares evenly to all adults in the USA. It's then up those people if they want to hold them or sell their fraction on existing marketplaces (which I assume in 10 years will mostly support fractional shares, especially if this is coming).
- colinmhayes 6y agoThere is effectively no difference between a dividend and a buyback. You're trying to claim that doing a reverse buyback is different than just paying taxes, but they would have the same effect.