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This will crash asset values, won't work. The whole system of debt and income is built off expected money, change the expectations and watch things break. And I
by ldjkfkdsjnv 4y ago
This will crash asset values, won't work. The whole system of debt and income is built off expected money, change the expectations and watch things break. And I get your retort, "let it break", but I am telling you, wont work
- endisneigh 4y agoWhy exactly would it crash asset values?
- stevedewald 4y agoMost investors care about after-tax returns, so increasing the tax rate on certain assets will decrease demand for them.
- endisneigh 4y agoI agree that there will be decreased demand, but I don’t see any evidence of a crash. Equities would still out perform most other investments
- sokoloff 4y agoAsset values can be thought of as a series of future cash flows, each discounted back to today (for uncertainty and inflation). Raising taxes on those future cash flows makes the assets less valuable today. The contemplated change isn’t this drastic, but imagine that you have an asset today that’s worth $X. Suddenly, overnight, everyone in the market for that asset learns that all future benefits from that asset will be permanently exactly half as valuable as they were yesterday. What would you expect the price of that asset to reconverge to? I’d expect it to converge to pretty close to half of $X.
- deleted 4y ago[deleted]