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When Jeff Bezos buys a yacht, he doesn't buy it with Amazon stock. He cashes out that stock and then buys the yacht. I think a fair approach would be to use th
by LargeWu 5y ago
When Jeff Bezos buys a yacht, he doesn't buy it with Amazon stock. He cashes out that stock and then buys the yacht.
I think a fair approach would be to use their total net worth as the threshhold for which wealth taxes apply, but taxes are only paid when that stock is turned into actual money, or equivalent. If you're not cashing out your company holdings, if your wealth is only "on paper", then you owe nothing. But if you try to start cashing that out, then you owe the wealth tax, and you don't get any proceeds until you pay off that tax first. Note that this would be on top of capital gains taxes.
- jvanderbot 5y agoBut the article lays out wealth as a baseline, stating that taxes paid are a small percentage of the wealth increases. Wealth is mostly unliquidated because it is stock. If I'm understanding the argument correctly, the proposition is that we should ( morally, not legally ) have levied additional taxes on these folks because their net worth has gone up as calculated by the value of things they own, like stock. I find that surprising and somewhat unintuitive. Thanks for clarifying.
- LargeWu 5y agoI think you're correct in how you're characterizing the general consensus around wealth tax - that people should be taxed based on all accumulated wealth, including unrealized gains. I don't know how practical that is. I think an approach that frames it as 100% capital gains and/or marginal income tax rate on equivalent to the first 2-3% of your total gross wealth is more workable.
- kasey_junk 5y agoHe almost certainly doesn’t cash out his stock because of the tax impact. He gets a loan collateralized by his shares.