the reasonable thing, would be to tax loans underwritten by securities as income. that loophole, of borrowing on stocks you own is pretty much giving a bazooka to sycophants or crooks who are prone to abusing it. look at adam neuman for example. otherwise, this so called bill is gonna punish the people it didn't intend to punish, while leaving the current beneficiaries of low wealth tax unharmed.
Tim Sweeney: Tax bill would likely end founder control of independent companies
51–60 of 498 posts
Re: Tim Sweeney: Tax bill would likely end founder control of independent companies
#52Re: Tim Sweeney: Tax bill would likely end founder control of independent companies
#53Earlier quoted context omitted.
I think the law is bad policy, but you can get around this stuff with things like Class F shares: https://thebusinessprofessor.com/en_US/business-governance/c...
If you own solely class F shares you'll need to liquidate your class F shares to pay this tax. If you're lucky you'll have enough common stock to sell off. But eventually you'll run out.
They can be structured so that the still retain (nearly) total control (I personally think this is a good thing).
See: https://techcrunch.com/2020/08/21/palantir-three-class-votin...
"Palantir wants to push the envelope further though with a three-class structure that would prioritize Thiel, Karp, and Cohen above all others. In Palantir’s model, there would be a Class A share with 1 vote, a Class B share with 10 votes, and a special “Class F” share with variable votes.
Class F shares would share 49.999999% (six 9s in the decimal – I counted twice) of the voting power of Palantir at all times, regardless of the underlying ownership of shares. Important to note that that is not a “majority” and thus they will not have literally a controlling stake in the public company."
Re: Tim Sweeney: Tax bill would likely end founder control of independent companies
#54Earlier quoted context omitted.
Somehow I think Elon giving himself a multi-billion dollar salary to cover a jump in Tesla stock would upset a lot of people.
I'd be in favor of this I think. It might force Elon, Tesla, or the shareholders to address the elephant in the room: Teslas market cap vs their revenue. Teslas market cap is 1030m on 31.5m of revenue. GM is 79m on revenue of 122.5m. That's 50x the market cap per revenue.
How exactly would you propose Tesla address it? Put out a press release that says "you people are paying too much for our stock, stop it"?
Re: Tim Sweeney: Tax bill would likely end founder control of independent companies
#55I'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 w…
I assume you’ve never founded a successful company
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Re: Tim Sweeney: Tax bill would likely end founder control of independent companies
#56Talk about property taxes next tim
Re: Tim Sweeney: Tax bill would likely end founder control of independent companies
#57There's some truth to it ... but why is that a bad thing exactly?
How important are Bezos, Musk, Page, Brin and Zuckerberg to society?
It’s hard to fathom FB, Amazon, Tesla and SpaceX becoming the behemoths they are without a dictatorish stock holder with absolute control. Amongst those, certainly Musks’ contribution from an electric car and space exploration standpoint are societally argueably positive. Tesla and SpaceX simply would not have happened without him.
Re: Tim Sweeney: Tax bill would likely end founder control of independent companies
#58I'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 w…
Somehow I think Elon giving himself a multi-billion dollar salary to cover a jump in Tesla stock would upset a lot of people.
Would SpaceX even exist if this law had been in place? Serious question. Let's think this through.
Also what if it had been in place during the dotcom boom and bust?
Re: Tim Sweeney: Tax bill would likely end founder control of independent companies
#59I'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 w…
I assume you’ve never founded a successful company
This comment adds absolutely nothing to the discussion.
Is there some specific critique you have of what OP has said ?
Re: Tim Sweeney: Tax bill would likely end founder control of independent companies
#60Earlier quoted context omitted.
I'd be in favor of this I think. It might force Elon, Tesla, or the shareholders to address the elephant in the room: Teslas market cap vs their revenue. Teslas market cap is 1030m on 31.5m of revenue. GM is 79m on revenue of 122.5m. That's 50x the market cap per revenue.
How exactly would you propose Tesla address it? Put out a press release that says "you people are paying too much for our stock, stop it"?
Already tried: