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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

#261

Post by ethbr0 »

narrator wrote: post #238
IG_Semmelweiss wrote: post #231

Curious. Doesn't this open up the possibility of debt slavery of the entrepreneur, to the government ? If my stock in my biotech startup goes thru the roof and i get taxed X, i could perhaps sell some stock to cover. More likely, though, I will get into an installment plan with the IRS since the gains are so massive its going to be tough to sell so much stock without a discount, to pay the IRS off. Next year, FDA doe…

The idea of this is that private control of companies by independent minded founders should not exist. Only large financial companies like Vanguard and Blackrock should own large stakes in public companies. The practical effect is not to raise more tax revenue, it's to seize control from founders and give it to the financial oligarchy by forcing them to sell. This is what happens in Russia, Eastern Europe, Saudi Arab…

> If they wanted to raise more tax revenue, they could just raise the top marginal income tax rate up to 98% or raise capital gains tax rates

> If tax revenue is too low, just raise the top tax brackets. (Sweeney)

That was the original proposal [0]. Republicans and moderate Democrats shot it down.

Part of me thinks this is the "crazy" option, to actually get motion on increasing top rates and capital gains.

Complaints about those ideas shrink when this is the current alternative.

[0] https://www.nytimes.com/2021/05/28/us/politics/tax-rising-on...

Re: Tim Sweeney: Tax bill would likely end founder control of independent companies

#262

Post by bananabreakfast »

rsj_hn wrote: post #191
Ericson2314 wrote: post #167

Earlier quoted context omitted.

I don't think we can have conversation. To me, the numbers are secondary to their effects, that is kind of the thesis of the function finance paper too. Concretely stuff like UBI and a JG at least in the first order takes away a power of employers now amount of nominal inequality can give back. And if the limits to spending are real and not nominal, and rich people don't spend their wealth so much, taxing them hardly…

So, consider for a moment that I've understood MMT for almost two decades now. Also consider that there is a lot that MMT does not address, in its maniacal focus on whether it's possible to fund government programs without paying for them with taxes. There are other problems, like assuming savings demands are inelastic, but let's just focus on the distributional aspects. One of the main drawbacks is that ZIRP or mass…

So, you might be making good points, but honestly you come off sounding just cynical, vindictive and shitty.

Re: Tim Sweeney: Tax bill would likely end founder control of independent companies

#263

Post by wolverine876 »

sneak wrote: post #136
losvedir wrote: post #129

Earlier quoted context omitted.

Curious to know what up and coming industries you mean?

Cryptocurrencies, advanced semiconductors, and cheap per-passenger rail/aircraft. USA is winning on rockets and EVs but that is 100% because of one person and not wider US policy (and I assume most of his production of the latter will be non-US within 5 years).

> USA is winning on rockets and EVs but that is 100% because of one person and not wider US policy

The US has been far ahead in space since the 1960s, and advanced work in space is by NASA (and contractors). SpaceX has advanced orbital launches.

The US is the leader in many, many industries, including IT.

Re: Tim Sweeney: Tax bill would likely end founder control of independent companies

#264

Post by anonporridge »

Question I've had for a while.

Assuming a wealth tax gets through, couldn't the wealthy just take out a loan at near 0% against their stocks to pay the bill?

Could they get away without selling any stock at all?

Especially in an inflationary environment that many people think will get even more inflationary and a Fed that seemingly won't let the stock market crash.

Re: Tim Sweeney: Tax bill would likely end founder control of independent companies

#265

Post by gruez »

ethbr0 wrote: post #246
chii wrote: post #239

Earlier quoted context omitted.

if you tax unrealized capital gains, it's only fair to return unrealized losses. so > stock tanks to near $0 means you get all your paid tax back.

Which opens the government up to actually having to pay back substantial sums from the IRS, in the event of an equity downturn.

that's going to wreak havoc on finances during a recession. if the economy goes to shit, the government has to come up with money to stimulate the economy AND pay back all the capital gains taxes they collected during the boom times, all while tax revenues are down because businesses are imploding.

Re: Tim Sweeney: Tax bill would likely end founder control of independent companies

#266

Post by MisterBastahrd »

lavezza wrote: post #22
maerF0x0 wrote: post #4

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…

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 think what most people want is for billionaires to pay their true rate of income instead of artificially low percentages because they have access to financial instruments that most don't.

Re: Tim Sweeney: Tax bill would likely end founder control of independent companies

#267

Post by hedora »

sailingparrot wrote: post #196
hn_throwaway_99 wrote: post #127

This proposal seemed utterly reasonable to me, especially this: > US budget deficits don’t require a radical confiscation scheme like this. We already have a very effective progressive tax system which applies the same rules - but different rates - to everyone. If tax revenue is too low, just raise the top tax brackets That, together with closing the step-up-in-basis loophole, are the simplest ways to more equitably…

The issue is that many billionaires effectively have zero revenue. For example, Elon's salary at Tesla is 0$ per year. So you can increase the top bracket all you want, they won't pay more. Instead they get liquidity through loans backed by their shares, on which they of course have no tax. I agree that taxing based on unrealised gains is not a good solution, but I don't see how raising the top bracket solves that ei…

Then tax the loans?

Re: Tim Sweeney: Tax bill would likely end founder control of independent companies

#268

Post by whakim »

missedthecue wrote: post #237
IG_Semmelweiss wrote: post #231

Curious. Doesn't this open up the possibility of debt slavery of the entrepreneur, to the government ? If my stock in my biotech startup goes thru the roof and i get taxed X, i could perhaps sell some stock to cover. More likely, though, I will get into an installment plan with the IRS since the gains are so massive its going to be tough to sell so much stock without a discount, to pay the IRS off. Next year, FDA doe…

You're not. There are a lot of good reasons why governments don't implement or keep unrealized capital gains taxes for long.

This isn't true. There are lots of recorded instances of wealth taxes (e.g. France prior to the abolition of the ISF several years ago; many countries which levied temporary wealth taxes after WWII, etc.)

Re: Tim Sweeney: Tax bill would likely end founder control of independent companies

#269

Post by wolverine876 »

hedora wrote: post #260
vburg wrote: post #244

Buffet/Gates/Bloomberg/Soros/Cuban have been saying for years the rich need to pay more taxes. Propose a tax increase that actually hits the super-rich and the screaming begins. Guess all along they meant the "other rich", anyone making 200k.

In the Twitter thread, Sweeney proposes a progressive capital gains tax maxing out at 75%. It would hit him personally, but still allow him to run his company. He’s not complaining about the magnitude of the tax. He’s complaining about the mechanism.

He's 'proposing' something he knows is politically impossible. I predict he will find a way to run the company and make billions of dollars.

Re: Tim Sweeney: Tax bill would likely end founder control of independent companies

#270

Post by dragonwriter »

chii wrote: post #239
IG_Semmelweiss wrote: post #231

Curious. Doesn't this open up the possibility of debt slavery of the entrepreneur, to the government ? If my stock in my biotech startup goes thru the roof and i get taxed X, i could perhaps sell some stock to cover. More likely, though, I will get into an installment plan with the IRS since the gains are so massive its going to be tough to sell so much stock without a discount, to pay the IRS off. Next year, FDA doe…

if you tax unrealized capital gains, it's only fair to return unrealized losses. so > stock tanks to near $0 means you get all your paid tax back.

I think that the proposal is, much as with taxes on realized gains and losses, unrealized losses would be allowed to offset unrealized gains and be carried forward if there was an excess of losses.
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