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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

#481

Post by maerF0x0 »

cosmotic wrote: post #36
lavezza wrote: post #22

Earlier 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.

Revenue is an instantaneous metric of a company where as Market Value is a reflection of sentiment integrated over time and relatively compared to competing options for capital (such as other stocks, bonds, even present vs future purchases if inflation is material).

They will always be quite disjoint when viewed with an single/small number of revenue data points.

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

#482

Post by lr1970 »

bryanlarsen wrote: post #308
Barrin92 wrote: post #253

Earlier quoted context omitted.

any actual data to back that up? Looking at the top 50 American businesses by market cap probably 90%+ aren't run by founders, and plenty of the largest ones have continued to grow just fine. Apple, Microsoft just two name to trillion dollar businesses.

Also look at the top 50 businesses and how many still have founder control. In none of them does the founder still control 50% of the stock, and only a few of them (at least Facebook and Google) do the founder(s) control over 50% of the voting stock. For example, Bezos only owns 16% of the voting stock of Amazon, Musk only owns 22% of the voting stock of Tesla yet neither are in any danger.

Yes, they do not have a controlling stake (50%+1) but both Bezos and Musk are the largest shareholders in their respective companies wielding huge influence.

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

#483

Post by TameAntelope »

wolverine876 wrote: post #471
TameAntelope wrote: post #431

Earlier quoted context omitted.

Well that's the thing; I do keep pretty well up with public affairs, and from what I can tell, most of these ideas come from academia, but without much rigor or data to support these new taxation plans, and the legislators who support them do so for largely un-scientific reasons (e.g. has a good hook for a title). So when I say this all seems slapdash, I mean that I'm thoroughly unimpressed with the way by which thes…

If you want to keep up on it, a great source is The Economist. They have a strong free market bias (it is the solution to all things) but they provide serious analysis, including serious economics, accessibly and succinctly. Paul Krugman is good too, when he writes an article on economics - he clearly distinguishes his political preferences from the economics, and presents all serious sides of economic debates (and h…

Nice! I read The Economist weekly (the old fashioned way, from the mail), as well as WSJ, WaPo, NYT, Newsweek, probably ~40 articles a day from Memeorandum, whatever dreck gets put on Twitter, here, and Reddit. I've also got a handful of daily newsletters I subscribe to that I usually get through most of, as well. I'm a bit of a news junky. :)

I don't really have time today to compile a list of proposed tax legislation and their sources (or what I think of those plans), but reading through just the Wyden proposal [0], I can already see more of the "this guy agrees with me politically" crowd coming out than any real example of what Wyden bases this plan on. You've got the bill text, a summary of each section, and a summary of the bill, but no "and here's why we think this". Just the usual "WORKING AMERICANS NEED THIS" filler text that every bill has.

My point is that the "filter of politics" is exhausting and not necessary (to this degree). I do not think it's okay to propose legislation without explaining why it will do what you say, rather than some other thing. We're needlessly rushing the process

[0] - https://www.finance.senate.gov/chairmans-news/wyden-unveils-...

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

#484

Post by _carbyau_ »

satronaut wrote: post #467
_carbyau_ wrote: post #407

Earlier quoted context omitted.

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…

with that logic, what's the threshold for forcing them to spend down their wealth? 1 billion, half a billion, 1 million, 1 hundred thousand? If the government takes it, what are they going to spend it on? Foreign wars, jails, lavish mansions for leaders? But quite honestly, if somebody makes a successful business, wise investments, or works their ass off building an empire, who's to say they can't enjoy all the wealt…

Threshold? Say a billion. To be revised as inflation does it's thing.

I never mentioned the government taking it.

I want them to enjoy the wealth they have! Not as a big number, but as use of that number to buy/experience/do things. Bezos can buy 5 Ferraris a day for the rest of his life if he wants to for all I care. Just use the stuff.

Bezos is indeed rich, and no doubt worked long hours. But it wasn't the hours he did.

#1 Median wealth american = $121,760 Bezos wealth = 196.1 billion

If it was just the hours then (median wealth american work hours) x 1.6million = bezos work hours.

If the median american worked a mere 1 hour a week, then Bezos is working 1.6 million hours a week. Seems kinda tough to fit into the schedule...

No, he has leverage. And in this thread I am not even questioning whether he should have that leverage. Just saying, he's got money, he should spend it.

And I do try to avoid Amazon as best I can. But it is embedded in computing/supply chains and there's only so much anyone can do.

#1 https://www.forbes.com/advisor/investing/average-net-worth/

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

#485

Post by _carbyau_ »

rsj_hn wrote: post #405
_carbyau_ wrote: post #402

Earlier quoted context omitted.

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 t…

I like your comment. Discrete "worth to society" is indeed a vague and nebulous idea.

And money doesn't measure that, nor serve as a cosmic measure of morality.

If you remove wealth as being an indicator of worth to society, then Bezos has one less reason for such wealth.

The only reason he has the money is that he played the game well. But society makes the rules of the game and I think they should change.

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

#486

Post by Msw242 »

rsj_hn wrote: post #109
Msw242 wrote: post #85

Earlier quoted context omitted.

Prop 13 disincentivizes building housing. Stop calling people evil just because your grandmother isn't the center of their policy concerns.

> Prop 13 disincentivizes building housing. I didn't think we reached the point where people are arguing that things that make housing more valuable disincentivize building more homes - but here we are. It is zoning restrictions, EIR, etc., that disincentivize housing.

Prop 13 absolutely disincentivizes building housing. Other policies can also be bad. But grandma's house isn't being bulldozed to make way for a quadplex because she's insulated from the market.

https://www.kqed.org/news/11700683/too-few-homes-is-proposit...

But if you own a home in California, you are incentivized to maintain prop 13.

It's funny how hard it is for people to understand something when it cuts against their personal interests.

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

#487

Post by WalterBright »

PaulDavisThe1st wrote: post #458
WalterBright wrote: post #439

Earlier quoted context omitted.

BTW, hedge fund trading is all about finding an edge based on: 1. executing a trade on breaking news ahead of the other guys 2. finding an unknown correlation between Event A and the stock price The thing about (2) is once someone does find a correlation, that knowledge spreads out to the other hedge fundies, negating the advantage. And then it's back to future profits. It always goes back to future profits. Bill Gat…

Despite having a good chunk of my "retirement" money in the market, I try to avoid paying much attention to it's day to day issues. So no, I did not see what happened to MSFT. But look, the point is that there are two fundamental reasons to buy a stock. One is to collect dividends paid to stock owners (so called "blue chip" stocks). The other is because you believe the price of the stock will rise. (For the big playe…

Again, it all boils down to expectation of future profit.

It makes no difference (except for tax purposes) if the dividends are paid to shareholders, or if they are retained and the stock price goes up by the amount of the dividend. As the differing tax treatment of capital gains and dividends changes, companies change their dividend payouts to match.

> But it can also (and demonstrably has) happen(ed) that the price rises because derivative beliefs about the likely future price. And that's precisely what happened in the case of amzn

The future price reflects expectation of profit. Amazon actually creates quite a bit of profit, they just plow it back into the business.

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

#488

Post by PaulDavisThe1st »

WalterBright wrote: post #487
PaulDavisThe1st wrote: post #458

Earlier quoted context omitted.

Despite having a good chunk of my "retirement" money in the market, I try to avoid paying much attention to it's day to day issues. So no, I did not see what happened to MSFT. But look, the point is that there are two fundamental reasons to buy a stock. One is to collect dividends paid to stock owners (so called "blue chip" stocks). The other is because you believe the price of the stock will rise. (For the big playe…

Again, it all boils down to expectation of future profit. It makes no difference (except for tax purposes) if the dividends are paid to shareholders, or if they are retained and the stock price goes up by the amount of the dividend. As the differing tax treatment of capital gains and dividends changes, companies change their dividend payouts to match. > But it can also (and demonstrably has) happen(ed) that the price…

You've modified your claim quite a bit.

> The value of a corporation is inevitably linked to its profits.

> Again, it all boils down to expectation of future profit.

Maybe you feel these are equivalent statements. I don't. I think they are fundamentally different. People's expectations about a company's future profitability are, to me, entirely different from a company's actual profit. Blue chip companies have stock values that are tightly tied to their actual profit, unless there's some reason to think they might be on the verge of some sort of breakthrough that will make the stock price climb dramatically (because of anticipated future growth). Non-blue-chips have stock values that have a substantial component derived entirely from 1st, 2nd or 3rd order expectations about profit, and this can move stock prices dramatically even though there is no actual change in the company's profitability.

So, if you had only said "it all boils down to (1st, 2nd or 3rd order expectation of future profit", I'd agree with you. But you started by saying "the value of a corporation is linked to its profits", and I can't agree with that except for blue chip (type) companies.

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

#489

Post by wolverine876 »

TameAntelope wrote: post #483
wolverine876 wrote: post #471

Earlier quoted context omitted.

If you want to keep up on it, a great source is The Economist. They have a strong free market bias (it is the solution to all things) but they provide serious analysis, including serious economics, accessibly and succinctly. Paul Krugman is good too, when he writes an article on economics - he clearly distinguishes his political preferences from the economics, and presents all serious sides of economic debates (and h…

Nice! I read The Economist weekly (the old fashioned way, from the mail), as well as WSJ, WaPo, NYT, Newsweek, probably ~40 articles a day from Memeorandum, whatever dreck gets put on Twitter, here, and Reddit. I've also got a handful of daily newsletters I subscribe to that I usually get through most of, as well. I'm a bit of a news junky. :) I don't really have time today to compile a list of proposed tax legislati…

Sorry, I misunderstood you about what you read. Now I'd like to know how you have time! If you have any highly efficient curated news aggregation (high value information, generally non-partisan), I'd love to know.

> My point is that the "filter of politics" is exhausting and not necessary (to this degree). I do not think it's okay to propose legislation without explaining why it will do what you say, rather than some other thing. We're needlessly rushing the process

I agree with all that, other than rushing the process. These bills have been discussed for a long time, the tax debates are old (even if not appropriately explained), and the impact of delay is substantial, including reducing the chance of getting anything at all done. The alternative may be 'nothing'.

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

#490

Post by FranksTV »

ncallaway wrote: post #384
chuckee wrote: post #371

Earlier quoted context omitted.

> Epic Games is a privately held company, and not traded on established securities markets or readily available on secondary markets. But suppose it were publicly held, with Sweeney holding majority ownership. Why would that distinction make his criticism of this tax scheme invalid? It seems to me his criticism is still perfectly valid, it only applies to a smaller set of companies.

Yes, but the strength of the criticism is really dependent on the number of companies that it applies to. If his criticism applied to every company and every founder in the country, it would be devastating and the law shouldn't be considered at all. If the criticism would affect the control of only a single company, then it's a much smaller concern. So, saying: "this criticism is quite a bit smaller in scope than it…

I don't know, I think we should trust the ultra-wealthy guy when he says that paying his fair share of taxes will hurt the little guy.
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