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Of course it is a contrived, fantastical scenario. But the point is: Does it meaningfully deviate from the key points for any wealth tax scenario?
by googlryas 4y ago
Of course it is a contrived, fantastical scenario. But the point is: Does it meaningfully deviate from the key points for any wealth tax scenario?
- Apocryphon 4y agoA wealth tax scenario, like all taxes in real life, will have its share of exceptions, carve-outs, and loopholes. Meaning the wealth assessment process will inevitably be far more involved than "a weird little cult offered a billion dollars for it." Now, from a parable perspective, does the post mirror the principle of how wealth taxes work? Maybe, if you're willing to equate the entire market (or whatever communal entity we're using for the basis of assessment) to a weird little cult.
- googlryas 4y agoOk, it is not a weird little cult, but literally everyone in the world who wants my rock because it is so beautiful. I don't see how that tangibly affects any part of the parable - which is forcing me to sell something I own because someone else with more money than I have wants it.
- Apocryphon 4y agoPresumably physical collectible assets (maybe also virtual ones too for the NFT crowd) will be assessed differently from more liquid assets for the basis of evaluating a wealth tax, especially in the event of surging valuations from the collectibles market. If real life taxes, like say property tax in California, can be reined in by measures like Proposition 13, then there's no reason why a real-life wealth tax won't be subject to all sorts of internal controls and effects from lobbying. Thus protecting the "run of the mill average Joe" from having to suddenly sell his mythical rock.
- googlryas 4y agoWhat about surging valuations in the equities market? If I'm worth $1B for a few moments because of a surging valuation, and then the government takes $900M of that, and then the stock crashes back to 1/100th of its peak, do I get my shares back?
- Apocryphon 4y agoJust as current income taxes have a hard deadline in which financial assets are assessed, your extreme edge case is only applicable one day a year, rendering it ever the more trivial. Not to mention, the calculation for wealth would probably be based on something less temporary than a fleeting moment in the markets. Finally, the government would not directly take shares, so they would always be owned by you. Presumably with the stock price so much reduced you can simply purchase more at a pittance.
- googlryas 4y agoI'm not sure if I would particularly care that it was just an edge case that caused me to miss out on $99M. They wouldn't take shares, but I would be forced to sell shares in order to pay the tax bill, because I don't actually have that money just laying around. So I had 10M shares @ $1/share, share prices go up to $100/share. I get hit with a $900M tax bill and sell 9M shares in order to pay it. Price goes back down to $1/share, leaving me with 1M shares. How exactly should I purchase more at a pittance? I spent all the money I didn't even have paying the tax bill, there's nothing left in my bank account to buy any shares.
- Apocryphon 4y agoBuy it on margin, if the price has gone down so low you can easily get it approved
- googlryas 4y agoTaking out a loan against an asset to buy more of that asset sounds like a horrible financial move.