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It will also add very odd incentive to not grow your company after you reach the billionaire tax-level. A. you'll maintain ownership B. you wont have to pay t

It will also add very odd incentive to not grow your company after you reach the billionaire tax-level. A. you'll maintain ownership B. you wont have to pay taxes on the gains Tons lot of founders care about 'A' a lot more than is "rational". It sounds okay, but the USA will miss out on a lot of potential wealth and tax revenue from people who choose not to grow their companies into huge multinational corporations.

xbar 5y ago
It is hard to overstate the harm this will do to entrepreneurial enterprise as a result of these anti-growth incentives.
nicoburns 5y ago
Smaller companies may be a net benefit over the long term. These super large companies tend to become over dominant in their markets and and start engaging in anti-competetive behaviours.
- randyrand 5y ago
  I'd expect that we'd just see more large companies overseas, and fewer in America.
  - WalterBright 5y ago
    If the government succeeds in breaking up America's huge companies, the US's economic advantage will be ceded to other countries. All the FAANG companies are American. What country wouldn't like to have just one of them?
- dcolkitt 5y ago
  Decades of economic research has consistently confirmed that large corporations have substantially higher productivity and efficiency.
  - WalterBright 5y ago
    Big businesses are the engines the drive the economy. Small businesses are the future big businesses. A healthy economy needs both. After Japan was burned to the ground in WW2, the US sent in academics to structure the economic recovery. They thought big business was bad, and only allowed small companies to operate. The economy flatlined. Finally, they allowed big business to resume operations. The economy went straight up until 1990 or so when it became moribund for other reasons.
- WalterBright 5y ago
  > These super large companies tend to become over dominant in their markets and and start engaging in anti-competetive behaviours. This complaint I've heard my entire life about the dominant companies of the day that have since collapsed of their own accord. Companies like RCA, IBM, Sears, Kodak, etc. 10 biggest companies by market cap 20 years ago: GE Cisco Exxon Phizer Microsoft Walmart Citigroup Vodafone Intel Royal Dutch Shell and today: Apple Microsoft Alphabet Amazon Facebook Tesla Berkshire Hathaway TSMC Tencent Nvidia
  - enumjorge 5y ago
    The fact that giant companies eventually collapse under the weight of their own greed and complacency doesn’t mean they don’t engage in anticompetitive behavior while they’re at the top.
    - WalterBright 5y ago
      It means they were not successful at crushing their competitors.
      - mywittyname 5y ago
        Those largest companies from 20 years ago didn't fail, they are all doing very well (well, GE excepted), they just did not grow nearly as fast as new tech did.
        WalterBright 5y ago
        They were bad investments over that time period. I'm still smarting over my disastrous Cisco investment. How's Intel doing lately? Nvidia ate their ice cream. Cisco and Intel could do no wrong prior to 2000.
      - enumjorge 5y ago
        My point is huge companies can engage can have negative effects on competition even if they eventually fall. How many businesses has Amazon whipped out in the retail space by leaning on the profits from the cloud division? Just the other day we saw documents from the DOJ’s lawsuit against Google for anticompetitive behavior. In the those documents we saw internal communication about a desire for Google to use their dominance in the browser space to create the web into a walled garden [0]. [0] https://news.ycombinator.com/item?id=28974798 https://news.ycombinator.com/item?id=28974798
gonehome 5y ago
I think the law is bad policy, but you can get around this stuff with things like Class F shares: https://thebusinessprofessor.com/en_US/business-governance/class-f-stock https://thebusinessprofessor.com/en_US/business-governance/c...
- randyrand 5y ago
  If you own solely class F shares you'll need to liquidate your class F shares to pay this tax. If you're lucky you'll have enough common stock to sell off. But eventually you'll run out.
  - gonehome 5y ago
    They can be structured so that the still retain (nearly) total control (I personally think this is a good thing). See: https://techcrunch.com/2020/08/21/palantir-three-class-voting/ https://techcrunch.com/2020/08/21/palantir-three-class-votin... "Palantir wants to push the envelope further though with a three-class structure that would prioritize Thiel, Karp, and Cohen above all others. In Palantir’s model, there would be a Class A share with 1 vote, a Class B share with 10 votes, and a special “Class F” share with variable votes. Class F shares would share 49.999999% (six 9s in the decimal – I counted twice) of the voting power of Palantir at all times, regardless of the underlying ownership of shares. Important to note that that is not a “majority” and thus they will not have literally a controlling stake in the public company."

xbar 5y ago

It is hard to overstate the harm this will do to entrepreneurial enterprise as a result of these anti-growth incentives.

nicoburns 5y ago

Smaller companies may be a net benefit over the long term. These super large companies tend to become over dominant in their markets and and start engaging in anti-competetive behaviours.

randyrand 5y ago
I'd expect that we'd just see more large companies overseas, and fewer in America.
- WalterBright 5y ago
  If the government succeeds in breaking up America's huge companies, the US's economic advantage will be ceded to other countries. All the FAANG companies are American. What country wouldn't like to have just one of them?
dcolkitt 5y ago
Decades of economic research has consistently confirmed that large corporations have substantially higher productivity and efficiency.
- WalterBright 5y ago
  Big businesses are the engines the drive the economy. Small businesses are the future big businesses. A healthy economy needs both. After Japan was burned to the ground in WW2, the US sent in academics to structure the economic recovery. They thought big business was bad, and only allowed small companies to operate. The economy flatlined. Finally, they allowed big business to resume operations. The economy went straight up until 1990 or so when it became moribund for other reasons.
WalterBright 5y ago
> These super large companies tend to become over dominant in their markets and and start engaging in anti-competetive behaviours. This complaint I've heard my entire life about the dominant companies of the day that have since collapsed of their own accord. Companies like RCA, IBM, Sears, Kodak, etc. 10 biggest companies by market cap 20 years ago: GE Cisco Exxon Phizer Microsoft Walmart Citigroup Vodafone Intel Royal Dutch Shell and today: Apple Microsoft Alphabet Amazon Facebook Tesla Berkshire Hathaway TSMC Tencent Nvidia
- enumjorge 5y ago
  The fact that giant companies eventually collapse under the weight of their own greed and complacency doesn’t mean they don’t engage in anticompetitive behavior while they’re at the top.
  - WalterBright 5y ago
    It means they were not successful at crushing their competitors.
    - mywittyname 5y ago
      Those largest companies from 20 years ago didn't fail, they are all doing very well (well, GE excepted), they just did not grow nearly as fast as new tech did.
      - WalterBright 5y ago
        They were bad investments over that time period. I'm still smarting over my disastrous Cisco investment. How's Intel doing lately? Nvidia ate their ice cream. Cisco and Intel could do no wrong prior to 2000.
    - enumjorge 5y ago
      My point is huge companies can engage can have negative effects on competition even if they eventually fall. How many businesses has Amazon whipped out in the retail space by leaning on the profits from the cloud division? Just the other day we saw documents from the DOJ’s lawsuit against Google for anticompetitive behavior. In the those documents we saw internal communication about a desire for Google to use their dominance in the browser space to create the web into a walled garden [0]. [0] https://news.ycombinator.com/item?id=28974798 https://news.ycombinator.com/item?id=28974798

gonehome 5y ago

I think the law is bad policy, but you can get around this stuff with things like Class F shares: https://thebusinessprofessor.com/en_US/business-governance/class-f-stock https://thebusinessprofessor.com/en_US/business-governance/c...

randyrand 5y ago
If you own solely class F shares you'll need to liquidate your class F shares to pay this tax. If you're lucky you'll have enough common stock to sell off. But eventually you'll run out.
- gonehome 5y ago
  They can be structured so that the still retain (nearly) total control (I personally think this is a good thing). See: https://techcrunch.com/2020/08/21/palantir-three-class-voting/ https://techcrunch.com/2020/08/21/palantir-three-class-votin... "Palantir wants to push the envelope further though with a three-class structure that would prioritize Thiel, Karp, and Cohen above all others. In Palantir’s model, there would be a Class A share with 1 vote, a Class B share with 10 votes, and a special “Class F” share with variable votes. Class F shares would share 49.999999% (six 9s in the decimal – I counted twice) of the voting power of Palantir at all times, regardless of the underlying ownership of shares. Important to note that that is not a “majority” and thus they will not have literally a controlling stake in the public company."