61–70 of 498 posts
There'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
Changes in law often result in changes to how companies operate, they're not forced to stick with status quo.
> It doesn’t apply to shares held by hedge funds like KKR, nor to corporate investors like Tencent and Sony. If that's the case, then what prevents billionaires like him from creating "Tim Sweeney angel fund LLC" and have that entity retain control of Epic? Then since this entity is private, couldn't it defer that tax at the time it sells the entity? With the whole deferred tax scheme that applies to assets not trade…
> It doesn’t apply to shares held by hedge funds like KKR, nor to corporate investors like Tencent and Sony. If that's the case, then what prevents billionaires like him from creating "Tim Sweeney angel fund LLC" and have that entity retain control of Epic? Then since this entity is private, couldn't it defer that tax at the time it sells the entity? With the whole deferred tax scheme that applies to assets not trade…
> It doesn’t apply to shares held by hedge funds like KKR, nor to corporate investors like Tencent and Sony. If that's the case, then what prevents billionaires like him from creating "Tim Sweeney angel fund LLC" and have that entity retain control of Epic? Then since this entity is private, couldn't it defer that tax at the time it sells the entity? With the whole deferred tax scheme that applies to assets not trade…
The 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.
This is the kind of myopic reading of the law that will curtail entrepreneurial endeavors and lead to corporate-only wealth.
Entrepeneurs aren't going to not build a company because of some specific tax treatment that only applies whilst they are wildly successful.
It will also add very odd incentive to not grow your company after you reach the billionaire tax-level. A. you'll maintain ownership B. you wont have to pay taxes on the gains Tons lot of founders care about 'A' a lot more than is "rational". It sounds okay, but the USA will miss out on a lot of potential wealth and tax revenue from people who choose not to grow their companies into huge multinational corporations.
Smaller companies may be a net benefit over the long term. These super large companies tend to become over dominant in their markets and and start engaging in anti-competetive behaviours.
I'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 think it is a smart way to handle it and it would work for some CEO/founders however, some founders operate as board members that still influence much of the direction and operation without the same possibilities for pay rate increases to cover the gains. I think this could work under specific ownership scenarios but, for high p/e ratio companies this will likely requires ownership sales.
I'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
Well, one workaround would be to treat securitization of shares (eg for a loan) as a taxable event. This is a common (and currently legal) tax avoidance strategy. Another consideration is that maybe having sole control of a massive pot of cash or financial instruments by an individual is just a Bad Thing. Consider how Zuckerberg structured FB so that while he it's a public company, the bulk of the stock is non-voting…
Earlier quoted context omitted.
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I think the law is bad, but if we had a sane center-right party we wouldn't be in this situation. We're missing a liberal center and it's not found in either party, many (myself included) think the stuff like denying the election results are higher risk so I'm forced to vote against them on that alone. I mostly agree otherwise re: innovation (though think the southern border is not that relevant).
What if instead we flipped the paradigm such that if you want a government granted charter to create a liability limiting entity, that is what gets heavily taxed while individuals would get left alone for the most part. Require bookkeeping only from the entities that live on it, rather than forcing the yoke onto human beings. Applying this to income-distributing trusts as well would go a long way towards fixing dynastic wealth, without even touching the estate tax.
And tangentially the right thing to do about the massive paper gains of the stonk market over the past nineteen months months is to call in all those loans made by the Fed by raising interest rates back to a reasonable level. But that would stop the fake riches gravy train and hamper trickle-up wealth redistribution, so corporatist policy will continue to carry the day while individuals get squeezed by the resulting increased financialization.