4 ms·

Google is almost a 2T company. The amount of wealth that big google shareholders hold in the 1T+ tech companies is mind boggling. Perhaps US should consider r

by nojvek 3y ago

Google is almost a 2T company. The amount of wealth that big google shareholders hold in the 1T+ tech companies is mind boggling. Perhaps US should consider raising capital gains tax.

snappyTertle 3y ago
How is that relevant to the layoffs?
- no_wizard 3y ago
  I don't know if its implied, but I would say since we are now talking about it, the money raised from this could go to meaningfully increasing things like unemployment benefits, for example.
scoofy 3y ago
When it comes to large shareholders that wouldn't actually do anything. Nobody sells in these new blue chips; they just borrow against their positions. I've thought about this for a long time. If we wanted to actually tax this wealth, we should just make people pay capital gains on marked-to-market positions every 10 years. Now before everyone starts shouting "yea, but the valuations aren't value," you could easily tax them on the lowest reasonable marked-to-market nominal value over the last decade, and you'd still get that tax revenue, just a decade later. It's just a way to have a property tax on a very speculative type of property. I've been a casual investor my entire life, and I still think it's ridiculous that you can just hold an asset forever and never pay a property tax on it, but some guy scraping together a life for his wife and kid has to pay property taxes on his house every year.
- riffraff 3y ago
  If you wanted to tax the wealth.. have a wealth tax? It's a thing in countries including Norway and Switzerland, and similar things exist in others (e.g. Italy taxes assets in some weird non linear way).
  - Matumio 3y ago
    Yes there is a wealth tax in Switzerland, but... it would have to be much higher to make a difference. Raising it will not pass a referendum, which it practically has to in Switzerland. It has one big advantage, though: official numbers about wealth distribution. I think micro taxation on all transactions (including at ATMs) would work better. Easier to explain, harder to avoid since you tax both sides of each transaction.
    - Panzer04 3y ago
      This is what a GST/VAT is, but far less disruptive. Taxing transactions that don't actually exchange ownership would be bonkers.
    - wh0knows 3y ago
      Aren’t these taxations generally regressive given poor people spend ~100% of their income and ultra rich people spend <1%. So you’re taxing the poor person on all of their money but barely taxing the rich person.
  - janalsncm 3y ago
    Makes sense to me. We already have a wealth tax of sorts. It’s called “property tax” which is mostly a house tax. We can tax other property too, including virtual assets such as shares.
  - scoofy 3y ago
    This is a scheme to tax capital gains, not wealth. The point of this prescription isn't that "the rich have too much money," it is that we have gotten to the point where some of the largest capital gains go untaxed, period. The idea that a gain isn't a gain until the asset is sold is nonsense. That'd literally be like saying that Bill Gates or Warren Buffett never made a dime on any of their stock that they are giving the charity. It's a ludicrous conception of capital gains, but it's exactly the one we use.
    - riffraff 3y ago
      I answered the way I did cause you wrote "if we wanted to tax this wealth". Which is the point, really, cause nobody cares about the small person who got a 1000% return on 50$ of Bitcoin, we care about massive assets owned by a tiny minority who is able to dodge capital gains tax even if their asset growth is only 4% per year.
- InitialLastName 3y ago
  You could generate a lot of revenue via a rule (enforcement TBD) that requires people to establish a reasonable valuation on an asset before they can use the asset as collateral for a loan. Then anyone who wanted material benefit off of their wealth would be required to pay taxes on it, rather than "benefit now, leave the gains to my estate".
- RestlessMind 3y ago
  Why not treat collateralization the same as a sale? Bezos puts 1B worth of AMZN as collateral? Sure, but now treat that as a capital gains event and trigger appropriate taxes. When the loan is repaid and AMZN is uncollaterized, treat it as a new buy event with a new cost basis.
  - kuchenbecker 3y ago
    I have no expertise in the matter, but largely agree "realization" should be when "value is assessed and used for gain" and not a strict sale. That being said, I don't want the Pandora's box of redefining "realization" opened.
    - RestlessMind 3y ago
      You can do it carefully and one clear scenario at a time. First, go with collaterization. Then, when billionaires find something else, go with that. And on and on.
- hajile 3y ago
  Tax the sale of everything and the entire problem goes away. At that point, it doesn't matter that they borrowed against their positions because spending the money they borrowed still taxes their stocks indirectly.
  - strix_varius 3y ago
    Exactly, people constantly debate this but it's a solved problem. Don't tax input, tax output. It also gives you a better scalpel. Instead of trying to wrangle the different income structures (blends of w2, 1099, stocks, bonds, real estate, etc etc), differentiate via the purchases: - superyachts: very high tax - luxury cars: high tax - vacation homes: high tax - clothes: low tax - staple groceries: no tax
- catothedev 3y ago
  Derivatives would make what youre talking about not work. Or lead to very convoluted rules which is bad.
anonymouse008 3y ago
Funny enough, this is already a response to a tax. 174 capitalizes software and general unproven R&D as the default now… ruining the cash position of many businesses that “made taxable GAAP profits” The rules of the game have changed. We were allowed to expense all employee compensation tied to software or R&D in the year in which we paid it. Now we can only expense a small fraction of that because we have to capitalize the expense. That means if you paid and developer $100 to develop a piece of software then sold subscriptions totaling $100 you now have a profit. The old model you have zero dollars in profit the new model says you have something like $80 in profit that you know have to pay taxes on… with what cash?
- hasty_pudding 3y ago
  The company used the developer that year and made the profit that year. It doesn't make sense to me why they would they have to expense it over 5 years.
  - InitialLastName 3y ago
    It's not like the developer is a plumber, where the company gets paid per toilet they can replace in a year. The IP that the developer developed is an asset that will keep earning a return in ensuing years; in every other field of business, yearly depreciation is how you account for the cost of your assets.
    - hasty_pudding 3y ago
      Not all but a good chunk of my career has been digital plumbing whether I'm in a developer or an ops role. And then theres engineers devoted to maintenance of the systems full-time. Do ops/infra people fall under this?
      - tjconsult 3y ago
        No, DevOps/SRE salaries are considered COGS (cost of goods and services) so they’re accounted for the same as a cloud hosting bill–i.e. _not_ a capital investment

by nojvek 3y ago

Google is almost a 2T company. The amount of wealth that big google shareholders hold in the 1T+ tech companies is mind boggling. Perhaps US should consider raising capital gains tax.

snappyTertle 3y ago

How is that relevant to the layoffs?

no_wizard 3y ago
I don't know if its implied, but I would say since we are now talking about it, the money raised from this could go to meaningfully increasing things like unemployment benefits, for example.

scoofy 3y ago

When it comes to large shareholders that wouldn't actually do anything. Nobody sells in these new blue chips; they just borrow against their positions. I've thought about this for a long time. If we wanted to actually tax this wealth, we should just make people pay capital gains on marked-to-market positions every 10 years. Now before everyone starts shouting "yea, but the valuations aren't value," you could easily tax them on the lowest reasonable marked-to-market nominal value over the last decade, and you'd still get that tax revenue, just a decade later. It's just a way to have a property tax on a very speculative type of property. I've been a casual investor my entire life, and I still think it's ridiculous that you can just hold an asset forever and never pay a property tax on it, but some guy scraping together a life for his wife and kid has to pay property taxes on his house every year.

riffraff 3y ago
If you wanted to tax the wealth.. have a wealth tax? It's a thing in countries including Norway and Switzerland, and similar things exist in others (e.g. Italy taxes assets in some weird non linear way).
- Matumio 3y ago
  Yes there is a wealth tax in Switzerland, but... it would have to be much higher to make a difference. Raising it will not pass a referendum, which it practically has to in Switzerland. It has one big advantage, though: official numbers about wealth distribution. I think micro taxation on all transactions (including at ATMs) would work better. Easier to explain, harder to avoid since you tax both sides of each transaction.
  - Panzer04 3y ago
    This is what a GST/VAT is, but far less disruptive. Taxing transactions that don't actually exchange ownership would be bonkers.
  - wh0knows 3y ago
    Aren’t these taxations generally regressive given poor people spend ~100% of their income and ultra rich people spend <1%. So you’re taxing the poor person on all of their money but barely taxing the rich person.
- janalsncm 3y ago
  Makes sense to me. We already have a wealth tax of sorts. It’s called “property tax” which is mostly a house tax. We can tax other property too, including virtual assets such as shares.
- scoofy 3y ago
  This is a scheme to tax capital gains, not wealth. The point of this prescription isn't that "the rich have too much money," it is that we have gotten to the point where some of the largest capital gains go untaxed, period. The idea that a gain isn't a gain until the asset is sold is nonsense. That'd literally be like saying that Bill Gates or Warren Buffett never made a dime on any of their stock that they are giving the charity. It's a ludicrous conception of capital gains, but it's exactly the one we use.
  - riffraff 3y ago
    I answered the way I did cause you wrote "if we wanted to tax this wealth". Which is the point, really, cause nobody cares about the small person who got a 1000% return on 50$ of Bitcoin, we care about massive assets owned by a tiny minority who is able to dodge capital gains tax even if their asset growth is only 4% per year.
InitialLastName 3y ago
You could generate a lot of revenue via a rule (enforcement TBD) that requires people to establish a reasonable valuation on an asset before they can use the asset as collateral for a loan. Then anyone who wanted material benefit off of their wealth would be required to pay taxes on it, rather than "benefit now, leave the gains to my estate".
RestlessMind 3y ago
Why not treat collateralization the same as a sale? Bezos puts 1B worth of AMZN as collateral? Sure, but now treat that as a capital gains event and trigger appropriate taxes. When the loan is repaid and AMZN is uncollaterized, treat it as a new buy event with a new cost basis.
- kuchenbecker 3y ago
  I have no expertise in the matter, but largely agree "realization" should be when "value is assessed and used for gain" and not a strict sale. That being said, I don't want the Pandora's box of redefining "realization" opened.
  - RestlessMind 3y ago
    You can do it carefully and one clear scenario at a time. First, go with collaterization. Then, when billionaires find something else, go with that. And on and on.
hajile 3y ago
Tax the sale of everything and the entire problem goes away. At that point, it doesn't matter that they borrowed against their positions because spending the money they borrowed still taxes their stocks indirectly.
- strix_varius 3y ago
  Exactly, people constantly debate this but it's a solved problem. Don't tax input, tax output. It also gives you a better scalpel. Instead of trying to wrangle the different income structures (blends of w2, 1099, stocks, bonds, real estate, etc etc), differentiate via the purchases: - superyachts: very high tax - luxury cars: high tax - vacation homes: high tax - clothes: low tax - staple groceries: no tax
catothedev 3y ago
Derivatives would make what youre talking about not work. Or lead to very convoluted rules which is bad.

anonymouse008 3y ago

Funny enough, this is already a response to a tax. 174 capitalizes software and general unproven R&D as the default now… ruining the cash position of many businesses that “made taxable GAAP profits” The rules of the game have changed. We were allowed to expense all employee compensation tied to software or R&D in the year in which we paid it. Now we can only expense a small fraction of that because we have to capitalize the expense. That means if you paid and developer $100 to develop a piece of software then sold subscriptions totaling $100 you now have a profit. The old model you have zero dollars in profit the new model says you have something like $80 in profit that you know have to pay taxes on… with what cash?

hasty_pudding 3y ago
The company used the developer that year and made the profit that year. It doesn't make sense to me why they would they have to expense it over 5 years.
- InitialLastName 3y ago
  It's not like the developer is a plumber, where the company gets paid per toilet they can replace in a year. The IP that the developer developed is an asset that will keep earning a return in ensuing years; in every other field of business, yearly depreciation is how you account for the cost of your assets.
  - hasty_pudding 3y ago
    Not all but a good chunk of my career has been digital plumbing whether I'm in a developer or an ops role. And then theres engineers devoted to maintenance of the systems full-time. Do ops/infra people fall under this?
    - tjconsult 3y ago
      No, DevOps/SRE salaries are considered COGS (cost of goods and services) so they’re accounted for the same as a cloud hosting bill–i.e. _not_ a capital investment