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> Taxing non-liquid wealth… I would rather address the "Buy, Borrow, Die" paradigm… like restricting the classes of assets one can borrow money against to force

by zahlman 2mo ago

> Taxing non-liquid wealth… I would rather address the "Buy, Borrow, Die" paradigm… like restricting the classes of assets one can borrow money against to force liquidation The point is that to justify the concentration of capital, the company should be doing well enough to tank the tax. If they can borrow money against the equity then that gives them liquidity, and they can use it to pay a wealth tax; and if they can't repay the loan (presumably because their equity didn't appreciate to a point where they could re-negotiate the loan terms) then there's your forced liquidity.

hingler36 2mo ago
I see your point, but in this scenario how do you handle the problem of levying an accurate tax? I suppose we could rely on banks to value assets instead of the government, but since the banks are the ones giving out the loans to pay the tax this feels a bit circular
- geoka9 2mo ago
  Banks are actually pretty good at valuing assets. They don't want to overvalue because that's their collateral. And lowballing will make the borrower choose another bank.
like_any_other 2mo ago
> The point is that to justify the concentration of capital Why does that need additional justification, beyond investor confidence? And why does "justification" take the form of paying money? That's not any kind of moral justification, it's just an indulgence. > the company should be doing well enough to tank the tax. Saying it should be doing well enough now to tank a tax based on estimated future earnings requires that a lot of otherwise unnecessary assumptions about access to financing and revenue timelines hold. It's all just throwing a bunch of extra stress at entrepreneurs when they're most vulnerable, instead of waiting for when their labors bear fruit. Since the state is extremely able to endure that wait, it all just comes across as malice.
- zahlman 2mo ago
  > Why does that need additional justification, beyond investor confidence? Because capital that's in one place is not capital moving around the economy. > And why does "justification" take the form of paying money? That's not what I said. Justification takes the form of superior return (which makes it possible to pay the tax and remain ahead). The return shows that it's fine to leave the capital in place, because it's empowering a successful venture.

by zahlman 2mo ago

hingler36 2mo ago

I see your point, but in this scenario how do you handle the problem of levying an accurate tax? I suppose we could rely on banks to value assets instead of the government, but since the banks are the ones giving out the loans to pay the tax this feels a bit circular

geoka9 2mo ago
Banks are actually pretty good at valuing assets. They don't want to overvalue because that's their collateral. And lowballing will make the borrower choose another bank.

like_any_other 2mo ago

> The point is that to justify the concentration of capital Why does that need additional justification, beyond investor confidence? And why does "justification" take the form of paying money? That's not any kind of moral justification, it's just an indulgence. > the company should be doing well enough to tank the tax. Saying it should be doing well enough now to tank a tax based on estimated future earnings requires that a lot of otherwise unnecessary assumptions about access to financing and revenue timelines hold. It's all just throwing a bunch of extra stress at entrepreneurs when they're most vulnerable, instead of waiting for when their labors bear fruit. Since the state is extremely able to endure that wait, it all just comes across as malice.

zahlman 2mo ago
> Why does that need additional justification, beyond investor confidence? Because capital that's in one place is not capital moving around the economy. > And why does "justification" take the form of paying money? That's not what I said. Justification takes the form of superior return (which makes it possible to pay the tax and remain ahead). The return shows that it's fine to leave the capital in place, because it's empowering a successful venture.