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Harris’s unrealized gains tax was to apply only to taxpayers with a net wealth of over $100 million. So it would have had no implications for a typical startup

by foldr 1y ago

Harris’s unrealized gains tax was to apply only to taxpayers with a net wealth of over $100 million. So it would have had no implications for a typical startup worker hoping for an eventual equity payday. Given that you yourself mention the figure of $100 million, did you perhaps misunderstand the proposal and think that it applied to unrealized gains on any asset theoretically worth more than $100 million? The criteria proposed were not such that merely having share options in a private company with some theoretical $100 million valuation would classify you as having $100 million in wealth for the purposes of the tax.

aurareturn 1y ago
Harris’s unrealized gains tax was to apply only to taxpayers with a net wealth of over $100 million. So it would have had no implications for a typical startup worker hoping for an eventual equity payday. Which is still dumb. I can incorporate a new company and give myself 100% of the shares. My friend comes along and decides he wants to give me $100,000 for only 0.01% of shares the next day. Suddenly, my company is worth $100m and now I owe the government tens of millions of dollars. Do you not see how dumb that is? Value can be anything. I can create a $1 trillion company right now out of thin air. All I have to do is give myself 0.000000000001% of shares for $1.
- foldr 1y ago
  Your scenario seems unrealistic at best. If you artificially inflate the valuation of your company then possibly you might pay more taxes. So, don't do that. But I don't think Harris's proposed law would have led to you paying more taxes in this weird scenario in any case, as you need to have $100m or more in assets.
  - aurareturn 1y ago
    It’s unrealistic but technically true. That’s a bad law.
    - tldrthelaw 1y ago
      No, it's a bad hypothetical.
      - aurareturn 1y ago
        No it isn’t. That’s exactly why taxing non realized gains isn’t common around the world.
        tldrthelaw 1y ago
        As above, it is common. See: property taxes and mark to market. It is perceived as being administratively infeasible because the folks who would be paying the biggest bills want you to believe that.
    - foldr 1y ago
      I don’t think it’s technically true that your shares in your company would be worth a multiple of what someone else paid for their shares when your shares were valued as part of your overall wealth for tax purposes.

by foldr 1y ago

aurareturn 1y ago

Harris’s unrealized gains tax was to apply only to taxpayers with a net wealth of over $100 million. So it would have had no implications for a typical startup worker hoping for an eventual equity payday. Which is still dumb. I can incorporate a new company and give myself 100% of the shares. My friend comes along and decides he wants to give me $100,000 for only 0.01% of shares the next day. Suddenly, my company is worth $100m and now I owe the government tens of millions of dollars. Do you not see how dumb that is? Value can be anything. I can create a $1 trillion company right now out of thin air. All I have to do is give myself 0.000000000001% of shares for $1.

foldr 1y ago
Your scenario seems unrealistic at best. If you artificially inflate the valuation of your company then possibly you might pay more taxes. So, don't do that. But I don't think Harris's proposed law would have led to you paying more taxes in this weird scenario in any case, as you need to have $100m or more in assets.
- aurareturn 1y ago
  It’s unrealistic but technically true. That’s a bad law.
  - tldrthelaw 1y ago
    No, it's a bad hypothetical.
    - aurareturn 1y ago
      No it isn’t. That’s exactly why taxing non realized gains isn’t common around the world.
      - tldrthelaw 1y ago
        As above, it is common. See: property taxes and mark to market. It is perceived as being administratively infeasible because the folks who would be paying the biggest bills want you to believe that.
  - foldr 1y ago
    I don’t think it’s technically true that your shares in your company would be worth a multiple of what someone else paid for their shares when your shares were valued as part of your overall wealth for tax purposes.