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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

#41

Post by gonehome »

randyrand wrote: post #18

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.

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...

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

#42

Post by gonehome »

Factorium wrote: post #34
brnt wrote: post #5

An altogether _very_ reasonable price for what we're getting in return.

[flagged]

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).

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

#44

Post by TedShiller »

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…

I assume you’ve never founded a successful company

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

#45

Post by tedunangst »

dsizzle wrote: post #14
d23 wrote: post #8

Earlier quoted context omitted.

It still seems problematic. Even if my company goes public, if I haven't actually sold the shares and made any money, why should this be taxed? If there are loopholes that let the founder avoid those taxes at sale time, fix those, but otherwise why should we effectively take away ownership of a company just because someone has built it up successfully.

One loophole is the step-up basis that applies when the owner dies. Not sure why that wasn't targeted instead (maybe because the current plan produces revenue more quickly?).

"Billionaire tax" plays better than "death tax" so we get tax policies that fit into 30 second commercials, not those that make economic sense.

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

#46

Post by CamperBob2 »

RNCTX wrote: post #13
wod3m wrote: post #10

Earlier quoted context omitted.

if you start a company you should be able to continue to own that company until you decide you're ready to sell it

There are no mom and pop store billionaires.

Sam Walton says, "Huh?"

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

#47

Post by randyrand »

gonehome wrote: post #41
randyrand wrote: post #18

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.

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.

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

#48

Post by CamperBob2 »

syshum wrote: post #35
RNCTX wrote: post #13

Earlier quoted context omitted.

There are no mom and pop store billionaires.

And the Income Tax originally was only 3% and only applied to less than 1% of the population. The idea that it would apply to everyone, and be 20% was literally laughed out of the debate on implementing a national income tax as a "crazy conspiracy", it took less than 50 years before that crazy conspiracy was reality. There is little reason to believe history will not play out the same, and it will not be long before…

But don't forget: the slippery slope argument is a logical fallacy!!!11!

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

#49

Post by fernandotakai »

HillRat wrote: post #32
fernandotakai wrote: post #16

Earlier quoted context omitted.

because taxes should be paid on money that exist and can spent. you wanna take a loan against your stock? you pay taxes on that loan. you wanna sell your stock? you pay taxes on the stock you sell. you just get your salary from the company and never sell stock? you pay taxes on your salary, and not on stock that are doing nothing.

you wanna take a loan against your stock? you pay taxes on that loan. That’s exactly the problem —- loans aren’t income, they’re debt, and debt isn’t taxed. Worse yet, the ultra-elite can carry out “buy (or ‘found’), borrow, die” strategies that let them pass the debt onto their kids, who can sell the securities at a tax advantage due to the stepped-up basis loophole.

but this is the kind of loophole that should be closed.

but they aren't.

and now we wonder why some "loopholes" are closed and some are not.

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

#50

Post by gtCameron »

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.

How would they “address” that? It’s outside of their control
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