Tim Sweeney: Tax bill would likely end founder control of independent companies
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Re: Tim Sweeney: Tax bill would likely end founder control of independent companies
#2It looks like Epic Games is a private company, so from what I understand in the proposal, this wouldn't affect him, since his shares are not publicly tradable. The proposal might affect him when/if he were to sell any shares, though, since it has a provision to accrue tax liability on illiquid assets like art/etc, to be owed at time of sale.
Re: Tim Sweeney: Tax bill would likely end founder control of independent companies
#3Watch progressives double down and spin this tweet as alt right.
Re: Tim Sweeney: Tax bill would likely end founder control of independent companies
#4I'm actually in favor of this.
I've long held that there should be public liquidity in all companies over a certain valuation and the company should not be allowed to bar you from selling the stock (though it could retain right to beat any pending offers)
It's asinine that companies are allowed to treat equity pay as pay, and IRS can tax it as realized (AMT), but the worker does not in fact have any instrument with which to pay the bill.
Edit: Also this is a really smart tweet IMO
Give yourself a salary that pays for your wealth tax obligations. You don't have to sell anything.
The valuation would grow slower due to burn rate, but the ownership % would not change.
Re: Tim Sweeney: Tax bill would likely end founder control of independent companies
#5An altogether _very_ reasonable price for what we're getting in return.
Re: Tim Sweeney: Tax bill would likely end founder control of independent companies
#6The current tax situation is like property taxes in California before Prop 19: nobody sells, so ownership and control never changes. This facilitates wealth transfer from generation to generation (in the equity case, though the use of trusts) and perpetuates wealth inequality.
Re: Tim Sweeney: Tax bill would likely end founder control of independent companies
#7It looks like Epic Games is a private company, so from what I understand in the proposal, this wouldn't affect him, since his shares are not publicly tradable. The proposal might affect him when/if he were to sell any shares, though, since it has a provision to accrue tax liability on illiquid assets like art/etc, to be owed at time of sale.
From what seems to be the intention of the tax plan it would be regardless of if the asset was available in a stock exchange so if the value of Tim's shares put him above the threshold he would still have to pay the tax. His wealth through epic would likely be less then if it were a publicly traded company though. The effect of paying tax on shares was always true as it becomes a realized capital gain and is already covered under the current tax system.
Re: Tim Sweeney: Tax bill would likely end founder control of independent companies
#8It looks like Epic Games is a private company, so from what I understand in the proposal, this wouldn't affect him, since his shares are not publicly tradable. The proposal might affect him when/if he were to sell any shares, though, since it has a provision to accrue tax liability on illiquid assets like art/etc, to be owed at time of sale.
It still seems problematic. Even if my company goes public, if I haven't actually sold the shares and made any money, why should this be taxed? If there are loopholes that let the founder avoid those taxes at sale time, fix those, but otherwise why should we effectively take away ownership of a company just because someone has built it up successfully.
Re: Tim Sweeney: Tax bill would likely end founder control of independent companies
#9There's some truth to it ... but why is that a bad thing exactly?
Re: Tim Sweeney: Tax bill would likely end founder control of independent companies
#10There's some truth to it ... but why is that a bad thing exactly?
if you start a company you should be able to continue to own that company until you decide you're ready to sell it