3 ms·

What if the 2% only kicks in for people with over $100M in assets?

• seanmcdirmid 3y ago
  I’m not sure how that is workable. If they have investments, they deprecate at 2%/year no matter what after $100m? Of course, the IRS doesn’t take a share of those assets, only cash, so they have to liquidate 2% of their assets each year, but only if they are worth more than $100m (assets - debts I guess?). Sounds like an auto economic cash given what has to be liquidated each year.
• robocat 3y ago
  Then no founder continues building their business once they near having $100M equity. Basically it creates a cap on private business size? Maybe reasonable, maybe not. It is a negative incentive to never try to work more to earn more. Suddenly you lose your serial entrepreneurs. Disincentives matter as much as incentives. In New Zealand, the party suggesting a wealth tax, was going to levy it if you had more than $1 million equity. There is no reason they wouldn't reduce the limit from $100M over time. Politicians want power, why would they want to allow anyone to have significant assets? One fundamental strength of capitalism is that it finds compromises between competing needs - compromises that our politicians can't or won't make.