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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

#401

Post by PaulDavisThe1st »

rsj_hn wrote: post #398
PaulDavisThe1st wrote: post #395

Earlier quoted context omitted.

If there are taxes, there's a tax avoidance industry. I mean, c'mon, there's a gigantic tax avoidance industry just for regular income tax. The proposed law under discussion here explicitly excludes privately held businesses and artwork.

> I mean, c'mon, there's a gigantic tax avoidance industry just for regular income tax. Because we have an extremely complex tax code. But seriously, eliminate all corporate taxes and replace that with a 10% VAT. Treat all income the same -- I don't care whether it's a long term capital gain, or a meteor filled with gold crashing into your yard, don't distinguish at all. Put it all into a single bucket, get one numbe…

The correct answer in my opinion has nothing to do with corporate taxation. The US government for some reason(s) (for another day) is almost completely unwilling to simply redistribute money to fund things it decides are worthy goals. Instead it creates tax credits and deductions that are supposed to do the same thing (at least for "the worthy").

We need to stop using tax code to implement policy. Taxes should be taxes, and if the government decides to pay people to encourage them to install solar PV/have children/buy new cars/invest in bitcoin/whatever, then the government should send them a check to do so.

So we're mostly in violent agreement, except that if corporations have any of the rights of people (and likewise, if people can somehow claim to be corporations), then I want them taxed just like people.

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

#402

Post by _carbyau_ »

hindsightbias wrote: post #57
AdamN wrote: post #9

There'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.

The specific people mentioned are certainly nowhere near as important to society as their wealth makes it appear.

Can you honestly point to Bezos and say he is "worth" 196,100,000 times more to society than the Amazon warehouse worker who has $1000 in the bank?

Did he put in 190 million man hours more than the Warehouse worker?

Did he have ideas that were 190 million times better? What kind of IQ would you need to pull that off?

It a matter of good ideas, some long hours no doubt, right time, right place and leverage the work of many thousands of others.

Smart work, but not worth 190 million times his lowest paid.

This level of wealth inequality is indicative of a broken system.

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

#403

Post by wolverine876 »

gonehome wrote: post #352
wolverine876 wrote: post #272

Earlier quoted context omitted.

> We're missing a liberal center The White House and most of the Democratic party are centrists.

I think Biden is a pretty moderate Obama style neo-liberal, but that's not really true of Elizabeth Warren, Bernie Sanders, or a lot of representatives in congress. I'm happy Biden won and I voted for him (well I voted for Bloomberg in the primary before it was obvious who would win and then Biden in the general), but it was looking scary there for a while. The democratic party is definitely more moderate compared to…

> that's not really true of Elizabeth Warren, Bernie Sanders, or a lot of representatives in congress

We can cite a few examples, but the great majority of elected Democrats, including the most powerful one (Biden) are centrists.

> The democratic party is definitely more moderate compared to republicans (where all but a tiny handful are just trump loyalists), but that's a pretty low bar - they still have a lot of policies I don't like in addition to the woke stuff.

If by 'moderate' you mean, 'between the current partisan positions', then moderate is just a different kind of partisan, one who makes choices by (bizarrely) navigating between what other people say.

But if we mean, 'non-partisan', let's evaluate policies based on their consequences, not based on what partisan rhetoric and positioning they've been tagged with.

IME, many moderates are the former (to be clear, I have no idea about you) - they are afraid of the conflict imposed mostly by the neo-reactionary right (which now runs the GOP), so they go along on reactionary commentary (attacking 'woke' people) because it's safe - the progressives have little power to threaten them - and then quietly object to some reactionary policies.

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

#404

Post by wolverine876 »

TameAntelope wrote: post #326
wolverine876 wrote: post #312

Earlier quoted context omitted.

The options have been considered and developed for years, decades even. There should be public debate, but these aren't new ideas that some novices are pulling out of a hat.

How would I be able to verify that? It seems like these are not very well considered options, based on my limited view.

I know it because I've read about them for years. Keep up on public affairs; it's sometimes almost impossible to show up at the last minute and be informed.

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

#405

Post by rsj_hn »

_carbyau_ wrote: post #402
hindsightbias wrote: post #57

Earlier quoted context omitted.

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.

The specific people mentioned are certainly nowhere near as important to society as their wealth makes it appear. Can you honestly point to Bezos and say he is "worth" 196,100,000 times more to society than the Amazon warehouse worker who has $1000 in the bank? Did he put in 190 million man hours more than the Warehouse worker? Did he have ideas that were 190 million times better? What kind of IQ would you need to pu…

> The specific people mentioned are certainly nowhere near as important to society as their wealth makes it appear

No one knows how much someone is "worth to society". Not me, and not you. Not even Bezos. This is not even a well-defined question.

But what we do know is that this is not what money measures, and attempts to politicize that -- to create some algorithm that decides what someone is worth to society, and then pay them according to that algorithm, always lead to terrible outcomes.

In the same way, we don't know how good or evil Bezos is, and neither is money a measure of good points net evil points.

The sooner we abandon these weird discourses around money, trying to endow it as some kind of metaphysical tally, or make it conform to some metaphysical tally, the better.

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

#406

Post by PaulDavisThe1st »

WalterBright wrote: post #397
PaulDavisThe1st wrote: post #390

Earlier quoted context omitted.

... with rates at most half the 40% being cited here for federal estate tax. State policies differ, indeed. Almost all discussion of estate taxes in this thread has focused on or been exclusive to the federal estate tax.

20% is still far from "a world without an estate tax".

WA state has a population of about 8M. Its citizens decided in 1981 to switch from an inheritance tax to an estate tax.

This citizen-driven state law affects slightly more than 2% of the US population, in theory.

In fact, median household income for WA in 2019 was about $78k, median household net worth in 2019 was about $400k, and median family net worth in WA in 2021 was $865k.

So in reality, even within WA state, almost nobody is paying the state estate tax. Here's the Seattle Times from 2019 on the incongruities in state wealth distribution. But notice that even in their numbers, home owner median net worth is still only $900k, less than half the state's estate tax threshold.

https://www.seattletimes.com/seattle-news/data/seattle-house...

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

#407

Post by _carbyau_ »

satronaut wrote: post #240
belltaco wrote: post #209

Earlier quoted context omitted.

A twitter reply says this: >I think everyone needs to read the bill and calm down. "Gains on private assets -- including harder-to-value assets like real estate, art and private companies -- would escape the annual levy, and only be taxable when sold. "

what does the government need all that money for anyways?

Same could be asked of any billionaire.

Think about it. 1 Billion. A person who lived 100 years would have $27,397 a day to spend. Including as a newborn infant.

At Bezos levels? roughly $5.3 million a day.

What could you do with 5 million a day? Well for the first 3 months of your life as a newborn, not much probably.

But as an adult certainly, you could find ways to spend it right? Great. Society would love to see some cash splashed around. The economics people always love to see money sloshing around society.

So why can't these people simply stop accumulating and start letting it flow? They'd get to enjoy it. Their society would benefit from it. It'd be good for everyone.

The more these people are forced to spend down their wealth - however they want to! - the better.

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

#408

Post by refurb »

adam_arthur wrote: post #345
refurb wrote: post #320

Earlier quoted context omitted.

This won't cover the spending at all. Not even close.

There are ~1T in capital gains realized every year, roughly. If you increase long term rate from 20%, to roughly 40% (top income rate), you'll generate roughly 200B a year in additional revenue. Of course changes in tax law will alter behavior, but we can say likely 100-150B+ per year. We can assume the large majority of these gains are from those above the 1m threshold. Facebook is doing ~60B in buybacks this year.…

You need to start putting realistic numbers. First off, if you double the tax rate on capital gains you'll see a dramatic change in behavior. You're not going to capture 75% of the expected, maybe half that. Instead of companies issuing equity, they'll just issue debt instead if it has clear tax advantages for investors.

Stock buy backs will end, they'll just pay it out as dividends instead. So $0.

SALT deduction has already been capped, no change there.

It's like the wealth tax in France that they expected would bring in billions brought in a few percentage of that.

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

#409

Post by ryan_lane »

chii wrote: post #328
mandevil wrote: post #296

Earlier quoted context omitted.

I buy stock at price A and sell, it later, at price B. Assuming B > A, (if it isn't this is a whole different thing) then I am taxed on the gain the stock made, I pay tax on the value of (B-A). On the other hand, I do have all of the (B-A) cash, which is nice. (Or as my tax professor once said, it's always better to have more money rather than less, and to die later rather than sooner.) Now let's say I still buy the…

> government never got it's cut of that (B-A) difference because the person who should be paying that cut is dead! You don't tax the dead.

When someone dies, it's necessary to file a tax return for them, if you're going to probate. The taxes need to be paid for that person, from the assets. So, yes, the norm is to tax the dead.

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

#410

Post by eftychis »

I am still trying to go through everything proposed and well I don't see a final draft somewhere -given that a lot of sub clauses, that are tax critical, seems to be flying around:

I agree with Tim's tweet and the article: not sure it will actually bring more money. It might bring much less.

Essentially the fundamental assertion this breaks is that the stock market is going to stay the same. This might be a great tool now for predicting stock upper value: you are the majority owner and have to decide if you are going to do a buyback or liquidate corporate stock. If your paper value is close to a billion of money you will never see but will pay taxes to, I think you have a strong incentive to keep control of your company and screw the rest of your investors, who would love a buyback as that is the tax effective way of making money of stock right now. Maybe dividends will do a comeback? Regardless, I would be surprised if some stock -- say tesla -- remain high.

So a lot of small investors / average Joe get to declare tax losses so that a big fish that has greater control on the stock price might declare wins???

I am missing some clause I guess. I am not touching IPO implications as that is anothwr minefield and a lot of other threads are discussing it

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