4 ms·

The fix for this is to give people the option to sell the items to the government at some high fraction (eg 75%) of the valuation, instead of paying the taxes.

rjtavares 14y ago
Give people the option to sell art at an arbitrary percentage of a made-up valuation? I'm sure that would end well...
- miahi 14y ago
  The valuation is given by IRS, so if they value it so high to get taxes (they jumped from 15M to 60+M just like that), they should also be able to buy it at the valued rate.
oelmekki 14y ago
Or to report the tax payment to the day some corrective law makes the item possible to sell, should it happens. Of course, there can be an immediate arrangement if they just give away the item to a museum.
skibrah 14y ago
The last thing the government wants to be involved with is selling real estate, art and other illiquid assets. There is a very real possibility that the government would lose money if it is unable to sell the asset at the original valuation.
- kylec 14y ago
  I think this is the idea - if the item is unable to be sold at the original valuation, the valuation is wrong.
crazygringo 14y ago
Well the reality right now isn't too different. Ignoring the bald-eagle situation, they sell some of the items to pay for the tax bill, and keep the remainder. The government wants cash, it has no use for paintings!
zipdog 14y ago
I think Nascar uses this system to discourage undervaluing entries: owners declare a value for their car, and Nascar has the right to buy the car at that valuation. They would only do this if the car was under by a significant margin, so there's a huge incentive to give a fair estimate for the car. Its also a little similar to a system used to resolve splitting a 50/50 owned company: the person who wants to buy out the other partner must first give the price they'll pay, and then the second partner must choose between buying them out at that price, or selling their share.
- esrauch 14y ago
  Pretty much the same as the "one splits, the other chooses which half they want" that my brother and I would use to guarantee fair splits of cookies or cake.
cma 14y ago
Guatamala tried the reverse of that--they paid Chiquita chiquita's declared tax value for their land... pennies per acre. The US overthrew their democratically elected government over it.

rjtavares 14y ago

Give people the option to sell art at an arbitrary percentage of a made-up valuation? I'm sure that would end well...

miahi 14y ago
The valuation is given by IRS, so if they value it so high to get taxes (they jumped from 15M to 60+M just like that), they should also be able to buy it at the valued rate.

oelmekki 14y ago

Or to report the tax payment to the day some corrective law makes the item possible to sell, should it happens. Of course, there can be an immediate arrangement if they just give away the item to a museum.

skibrah 14y ago

The last thing the government wants to be involved with is selling real estate, art and other illiquid assets. There is a very real possibility that the government would lose money if it is unable to sell the asset at the original valuation.

kylec 14y ago
I think this is the idea - if the item is unable to be sold at the original valuation, the valuation is wrong.

crazygringo 14y ago

Well the reality right now isn't too different. Ignoring the bald-eagle situation, they sell some of the items to pay for the tax bill, and keep the remainder. The government wants cash, it has no use for paintings!

zipdog 14y ago

I think Nascar uses this system to discourage undervaluing entries: owners declare a value for their car, and Nascar has the right to buy the car at that valuation. They would only do this if the car was under by a significant margin, so there's a huge incentive to give a fair estimate for the car. Its also a little similar to a system used to resolve splitting a 50/50 owned company: the person who wants to buy out the other partner must first give the price they'll pay, and then the second partner must choose between buying them out at that price, or selling their share.

esrauch 14y ago
Pretty much the same as the "one splits, the other chooses which half they want" that my brother and I would use to guarantee fair splits of cookies or cake.

cma 14y ago

Guatamala tried the reverse of that--they paid Chiquita chiquita's declared tax value for their land... pennies per acre. The US overthrew their democratically elected government over it.