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But what is the solution? Most wealth of people like Elon Musk and Jeff Bezos is tied to ownership shares in their companies. I don't think it's fair to force t

But what is the solution? Most wealth of people like Elon Musk and Jeff Bezos is tied to ownership shares in their companies. I don't think it's fair to force them to sell shares so they can cover higher taxes. I also fear efforts to extract more tax money from them will ultimately just raise the bill for the middle class. The ultra wealthy can afford to hire a team of accountants to find the loopholes while small businesses are stuck with higher corporate tax rates.

frankbreetz 5y ago
The simple solution is to close the loopholes. Complexity is a tax on the middle class
mupuff1234 5y ago
Why is it not fair to force them? I don't think it's any more or less fair than forcing people to pay income tax.
- robryan 5y ago
  There may be unintended consequences in forcing successful founders to over time sell down a controlling stake in their company.
  - idiotsecant 5y ago
    This is like saying that homeowners are being forced to sell their homes over time to pay for property tax.
    - aaronschroeder 5y ago
      Some are. We live in an area where annual taxes are about 2% the value of the home. Home values have been skyrocketing and taxes along with them. Some people on fixed incomes can't afford it so are forced to sell. I think property tax should be abolished in general, but the problem with taxing ownership of a company is that owners are then forced to spend that much less on expenses to cover their tax burden (fewer jobs, or lower salaries for employees). A lot of companies operate close to break-even or even at a loss. What happens with the owner of a $2m / year company must come up with a 10% wealth tax amounting to $200k, but the company is operating at break-even? Expenses must be cut to pay the tax. Ultimately hurts the lower and middle class the most.
  - qqqwerty 5y ago
    Why would they need to sell anything? Just take a salary large enough to cover the wealth taxes. A CEO with a $100M net worth should easily be able to command a salary greater than $1M.
zorak8me 5y ago
One solution- if someone is taking out personal loans that function like income, let’s tax it like income. If someone really wants to live on 80k a year, that’s fine. But if they’re reporting 80k income but spending 10M, maybe they should be paying their fair share on that. Edit- this has the benefit of completely avoiding the issue of unrealized gains and sticks to the issue of income...
- idiotsecant 5y ago
  I think this might upset the millions of people who take large loan to do things like purchase real estate to live in.
  - zorak8me 5y ago
    A mortgage is not a personal loan.
- spikels 5y ago
  When does a loan "function like income"? What happens when they pay the loan back? Does the lender get a deduction? > But if they’re reporting 80k income but spending 10M, maybe they should be paying their fair share on that. A tax on spending (i.e. a sales tax) is a much more efficient means to achieve this.
  - zorak8me 5y ago
    It functions like income when they treat it like an average person treats their income. Spending on their home, their car, travel, etc. They’re using the loan to avoid taking income or realizing gains. But yeah, I would be down for a more sensible sales tax situation. I’m sure there are a hundred ways to skin this cat. Edit: ways
    - Dracophoenix 5y ago
      How is that any different than paying with a credit card or using reward points? Those aren't taxable or treated like income so why should loans and mortgages be?
alkonaut 5y ago
> I don't think it's fair to force them to sell shares so they can cover higher taxes. If the treshold is high (say $1B) then I don’t think it would be that unfair to tax stock like property at e.g 1% a year. Diluting power would just be a secondary benefit in megacorps.
- aaronschroeder 5y ago
  I just don't see that working in practice. I've worked hard to build a small company and can't imagine losing 1% a year. The longer I work the less I own. If this was the reality, people would find a way around it even if it meant incorporating in another country entirely. And lets be honest, it would start at 1% and go up from there. We pay almost 2% / year of our home value in property tax.
  - BlueDingo 5y ago
    Perhaps the parent comment was edited, but surely the 1bn threshold would cover your situation?
lamontcg 5y ago
> I also fear efforts to extract more tax money from them will ultimately just raise the bill for the middle class. This is bonkers logic. You stick the middle class with the tax bill because otherwise the middle class might be stuck with the tax bill.
- aaronschroeder 5y ago
  I'm not saying to stick the middle class with the tax bill - just pointing out that taxes on the rich usually end up being paid by the middle class whether intended or not. The better solution is to cut spending and the need for more taxes in general.

frankbreetz 5y ago

The simple solution is to close the loopholes. Complexity is a tax on the middle class

mupuff1234 5y ago

Why is it not fair to force them? I don't think it's any more or less fair than forcing people to pay income tax.

robryan 5y ago
There may be unintended consequences in forcing successful founders to over time sell down a controlling stake in their company.
- idiotsecant 5y ago
  This is like saying that homeowners are being forced to sell their homes over time to pay for property tax.
  - aaronschroeder 5y ago
    Some are. We live in an area where annual taxes are about 2% the value of the home. Home values have been skyrocketing and taxes along with them. Some people on fixed incomes can't afford it so are forced to sell. I think property tax should be abolished in general, but the problem with taxing ownership of a company is that owners are then forced to spend that much less on expenses to cover their tax burden (fewer jobs, or lower salaries for employees). A lot of companies operate close to break-even or even at a loss. What happens with the owner of a $2m / year company must come up with a 10% wealth tax amounting to $200k, but the company is operating at break-even? Expenses must be cut to pay the tax. Ultimately hurts the lower and middle class the most.
- qqqwerty 5y ago
  Why would they need to sell anything? Just take a salary large enough to cover the wealth taxes. A CEO with a $100M net worth should easily be able to command a salary greater than $1M.

zorak8me 5y ago

One solution- if someone is taking out personal loans that function like income, let’s tax it like income. If someone really wants to live on 80k a year, that’s fine. But if they’re reporting 80k income but spending 10M, maybe they should be paying their fair share on that. Edit- this has the benefit of completely avoiding the issue of unrealized gains and sticks to the issue of income...

idiotsecant 5y ago
I think this might upset the millions of people who take large loan to do things like purchase real estate to live in.
- zorak8me 5y ago
  A mortgage is not a personal loan.
spikels 5y ago
When does a loan "function like income"? What happens when they pay the loan back? Does the lender get a deduction? > But if they’re reporting 80k income but spending 10M, maybe they should be paying their fair share on that. A tax on spending (i.e. a sales tax) is a much more efficient means to achieve this.
- zorak8me 5y ago
  It functions like income when they treat it like an average person treats their income. Spending on their home, their car, travel, etc. They’re using the loan to avoid taking income or realizing gains. But yeah, I would be down for a more sensible sales tax situation. I’m sure there are a hundred ways to skin this cat. Edit: ways
  - Dracophoenix 5y ago
    How is that any different than paying with a credit card or using reward points? Those aren't taxable or treated like income so why should loans and mortgages be?

alkonaut 5y ago

> I don't think it's fair to force them to sell shares so they can cover higher taxes. If the treshold is high (say $1B) then I don’t think it would be that unfair to tax stock like property at e.g 1% a year. Diluting power would just be a secondary benefit in megacorps.

aaronschroeder 5y ago
I just don't see that working in practice. I've worked hard to build a small company and can't imagine losing 1% a year. The longer I work the less I own. If this was the reality, people would find a way around it even if it meant incorporating in another country entirely. And lets be honest, it would start at 1% and go up from there. We pay almost 2% / year of our home value in property tax.
- BlueDingo 5y ago
  Perhaps the parent comment was edited, but surely the 1bn threshold would cover your situation?

lamontcg 5y ago

> I also fear efforts to extract more tax money from them will ultimately just raise the bill for the middle class. This is bonkers logic. You stick the middle class with the tax bill because otherwise the middle class might be stuck with the tax bill.

aaronschroeder 5y ago
I'm not saying to stick the middle class with the tax bill - just pointing out that taxes on the rich usually end up being paid by the middle class whether intended or not. The better solution is to cut spending and the need for more taxes in general.