5 ms·

Seems like it's not in anyone's interests for company shares to be heritable. How many companies have been burned to the ground because someone inherited them a

Seems like it's not in anyone's interests for company shares to be heritable. How many companies have been burned to the ground because someone inherited them and had no idea how to run such a company? Is there any movement to force owners to liquidate their shares upon their death? I'm surely not the first one to think of something like this.

jaredandrews 5y ago
"Estate tax"
- klyrs 5y ago
  Especially, closing the step-up basis loophole. https://www.thebalance.com/how-the-stepped-up-basis-loophole-works-357485 https://www.thebalance.com/how-the-stepped-up-basis-loophole...
- jimbob45 5y ago
  Is it really a tax if your net worth never changes? You're selling at full price.
ultrarunner 5y ago
Seems like it'd be in the family's best interest, being one of the best ways to build generational wealth?
tiahura 5y ago
If Bob's Muffler Shop is incorporated, why shouldn't it be heritable? In the US we generally don't confiscate companies from private individuals because we think we can run the company better. Additionally, shareholders would simply place the shares in a trust, or give the shares to their heirs before they die. So, no. There really isn't any movement to force sales of family business at death.
- georgeecollins 5y ago
  If a thing is heritable indefinitely it is a title in the feudal sense. If my family could control Bob's Muffler Shop for ten generations aren't we sort of the Earls of Bob's Muffler Shop?
  - yjftsjthsd-h 5y ago
    > If my family could control Bob's Muffler Shop for ten generations aren't we sort of the Earls of Bob's Muffler Shop? I dunno, are you the Earl of your great grandfather's pocket watch, or the Duke of the Heirloom Dresser?
  - actually_a_dog 5y ago
    Owning Bob’s Muffler Shop doesn’t give you any of the privileges granted to feudal lords, though. That’s a terrible analogy.
barry-cotter 5y ago
People own their own property and they can decide what to do with it. That’s what property means. They can leave a company to whoever they want, just like they can leave Aunt Gertrude’s silverware. Companies are property and people can make extremely foolish decisions with them if they want because they are their property. I can buy an original Hiroshige print and use it to light a fire if I want. By the same token you can leave your billion dollar company to your feckless coke snorting, whore frequenting grandson if you want. That’s what owning something means.
- jedberg 5y ago
  Sure but at some point when the company gets to be that big and employ that many people, there is a public interest to see it continue to exist. Also as a public company they have a fiduciary duty to the shareholders to keep it running well. There's some pretty good arguments to be made that when a major shareholder of a public company dies, their shares should be distributed by the board and not their will.
  - barry-cotter 5y ago
    Taking (a part of) someone’s property is a tax. Deciding that you will do that to companies above a certain size is a tax on getting big, a discouragement to do so. Security of property rights is a pretty compelling public interest. Keeping a particular company going is not on remotely on the same order. The fiduciary duty is a red herring. If you want to destroy your own property you can. If you make poor decisions about your own property that’s on you. Public companies are actively traded. If you don’t like management sell the shares. There are an uncountable number of ways that management can mess up. Why mess with property rights for one particular small class of ways companies can be messed up? If there is an argument for taking someone’s property upon their death and give it to other people because they are co-owners of a company please make it.
    - jedberg 5y ago
      You talk about a red herring and then say this: > Deciding that you will do that to companies above a certain size is a tax on getting big, a discouragement to do so. That's the biggest lie of all. High taxes has never discouraged someone from starting or growing a company. No one ever says, "gee I have a great idea but I don't want to pay a lot of tax on my windfall earnings so I just won't bother". But if you're so worried about discouraging growth, then fine. Make it apply to the death of any shareholder -- upon death the board gets to say where the voting rights of the shares go. Let the owner will the value of the shares to whomever they want, but let the board decide where the voting power goes.
hackernewds 5y ago
anyone? are you sure?

jaredandrews 5y ago

"Estate tax"

klyrs 5y ago
Especially, closing the step-up basis loophole. https://www.thebalance.com/how-the-stepped-up-basis-loophole-works-357485 https://www.thebalance.com/how-the-stepped-up-basis-loophole...
jimbob45 5y ago
Is it really a tax if your net worth never changes? You're selling at full price.

ultrarunner 5y ago

Seems like it'd be in the family's best interest, being one of the best ways to build generational wealth?

tiahura 5y ago

If Bob's Muffler Shop is incorporated, why shouldn't it be heritable? In the US we generally don't confiscate companies from private individuals because we think we can run the company better. Additionally, shareholders would simply place the shares in a trust, or give the shares to their heirs before they die. So, no. There really isn't any movement to force sales of family business at death.

georgeecollins 5y ago
If a thing is heritable indefinitely it is a title in the feudal sense. If my family could control Bob's Muffler Shop for ten generations aren't we sort of the Earls of Bob's Muffler Shop?
- yjftsjthsd-h 5y ago
  > If my family could control Bob's Muffler Shop for ten generations aren't we sort of the Earls of Bob's Muffler Shop? I dunno, are you the Earl of your great grandfather's pocket watch, or the Duke of the Heirloom Dresser?
- actually_a_dog 5y ago
  Owning Bob’s Muffler Shop doesn’t give you any of the privileges granted to feudal lords, though. That’s a terrible analogy.

barry-cotter 5y ago

People own their own property and they can decide what to do with it. That’s what property means. They can leave a company to whoever they want, just like they can leave Aunt Gertrude’s silverware. Companies are property and people can make extremely foolish decisions with them if they want because they are their property. I can buy an original Hiroshige print and use it to light a fire if I want. By the same token you can leave your billion dollar company to your feckless coke snorting, whore frequenting grandson if you want. That’s what owning something means.

jedberg 5y ago
Sure but at some point when the company gets to be that big and employ that many people, there is a public interest to see it continue to exist. Also as a public company they have a fiduciary duty to the shareholders to keep it running well. There's some pretty good arguments to be made that when a major shareholder of a public company dies, their shares should be distributed by the board and not their will.
- barry-cotter 5y ago
  Taking (a part of) someone’s property is a tax. Deciding that you will do that to companies above a certain size is a tax on getting big, a discouragement to do so. Security of property rights is a pretty compelling public interest. Keeping a particular company going is not on remotely on the same order. The fiduciary duty is a red herring. If you want to destroy your own property you can. If you make poor decisions about your own property that’s on you. Public companies are actively traded. If you don’t like management sell the shares. There are an uncountable number of ways that management can mess up. Why mess with property rights for one particular small class of ways companies can be messed up? If there is an argument for taking someone’s property upon their death and give it to other people because they are co-owners of a company please make it.
  - jedberg 5y ago
    You talk about a red herring and then say this: > Deciding that you will do that to companies above a certain size is a tax on getting big, a discouragement to do so. That's the biggest lie of all. High taxes has never discouraged someone from starting or growing a company. No one ever says, "gee I have a great idea but I don't want to pay a lot of tax on my windfall earnings so I just won't bother". But if you're so worried about discouraging growth, then fine. Make it apply to the death of any shareholder -- upon death the board gets to say where the voting rights of the shares go. Let the owner will the value of the shares to whomever they want, but let the board decide where the voting power goes.

hackernewds 5y ago

anyone? are you sure?