4 ms·
When you tax wealth, like say land or stocks, if the person is illiquid, they have to sell their assets to pay the tax. I would imagine that markets would crash
by Clubber 2y ago
When you tax wealth, like say land or stocks, if the person is illiquid, they have to sell their assets to pay the tax. I would imagine that markets would crash every tax cycle due to people trying to pay their tax obligation.
- andy_ppp 2y agoIs this impossible to work out?
- Clubber 2y agoWell, say you inherited 185 acres in the middle of nowhere that is valued at $500K. You make $150K a year. You can't really do anything with the land, it's all scrub brush by now and the government wants 30% in wealth tax to tune tune of $160K. What do you do? Say you put all your savings into the market. You have $400K in assets and the government wants 20% of it ($80K), you either tighten your belt or you sell assets. The wealthy, of course, will be in much better shape to handle this than your average guy who invested some of their income.
- aaomidi 2y agoIf the market is crashing once a year it’s no longer a crash. It’s arguably a prevention of a bubble forming.
- bufferoverflow 2y agoAnd the more they sell, the more they have to sell after, driving the prices even lower. It's definitely a good recipe to crash the markets.