How do you plan on taxing unrecognized capital gains? Forcing the sale of equity?

What parameters determine when someone is forced to sell equity? How about equity in non publicly listed assets, which don’t have a deep market or clear price?

"Taxing the super rich is hard, so let's not do it." That's what tax inspectors are for.

What is the purpose of misrepresenting a comment?

If it makes it clearer, suppose the market value of the assets you own increases from $10M to $15M in a year. How would you tax this? Do you start forcing people to sell? What if the asset they own isn’t publicly traded, for example land, or privately owned companies?

It’s not a “gotcha I’m against increasing taxes on wealthier people statement”. It’s a legitimate question on how to operate society when do much of the wealth is simply from increasing asset prices and decreasing currency values.

I'm in a jurisdiction with a wealth tax, so such things do exist, and do work.

(and contra Graham, it's only assessed at a per-mille level, not percents)

Force them to sell. If there isn't actually the demand at that valuation, then then it's a bubble anyways, that should be popped sooner than later.

Also, at that point, you shure as hell diversify your assets, instead of having them all in a single privately held company.

That's why we need a transaction tax on stock combined with tax breaks on stocks that have societal value, together with a ban on all derivatives. Stock markets need to be first order long term srategy crowdfunding again like they were originally invented as. Otherwise computers will just chase the next peofitable microsecond and CEOs will juse try to optimise the next quarter.

How and who do you determine values for assets that aren’t readily traded, such as intellectual property or equity in a private company?

I know how real estate and tangible/intangible asset values are assessed for property taxes purposes, and the problems with that are enormous, not to mention the avenues for fraud and increased paperwork. There are definitely winners and losers there based on your level of influence in society.

How and who determines what “stocks” have societal value?

It’s really easy to say these things, but I have yet to come across someone with even a half baked plan to implement them in a fair way. For example, currently startup employees get screwed with the way taxes work on options, where they owe significant taxes for nebulous gains that they may or may not benefit from.

Oh yeah, you're right. Can't tax those billionaires. I completely forgot the paperwork. And those invaluable art collections. You just can't put a price tag on those!

There are not enough billionaires to fix the budget, even if we doubled their taxes. There are only 600 their annual income isn't so significant in comparison to the budget.

Take Jeff Bezos, the richest man on earth, for example. His total compensation is 1.7 million and His capital gains from stock sales are about 1-2 billion per year.

The salary is is essentially negligible, and even doubling capital gains would provide an extra 200-400 million. The federal budget for 2020 was 4,790 million dollars.

Ha, doubling it, that's cute. The top marginal tax rate in the US used to be 92% in the 50s, and that's what was widely considered it's "golden age".

Those 600 people hold $4 Trillion dollar. Which is the federal budged you mentioned (it's not million btw).

The bottom 50% of the us population have 2 Trillion.

Those 4+ trillion federal budget include that ridiculous amount of defense spending, that's essentially welfare for the rich.

Now imagine if you could increase the federal budget by 25% for 4 years, just for science and education, and as a side effect you get a continued plus through the reduced negative effects of massive political influence by a small elite of 600 people.

There would probably a positive societal impact if you took those 4 trillion and burned them. Getting to spend them means, moon colonies, mars missions, broadband internet everywhere, proper healthcare for all, and maybe a shot at surviving the climate and biosphere collapse...

> Those 600 people hold $4 Trillion dollar.

They do not have $4T. They have assets which may be valued at $4T based on the most recent sale price of a small representative piece of the asset.

There is no way that the “$4T” in assets can be converted to $4T cash as selling it all would shift the supply and demand curves causing the price to drop, and hence the valuation.

Your argument is the same as saying "but they don't have any money, they only have 65238 metric tons of gold". Money doesn't have any intrinsic value either. You might as well say "societal power" instead of "wealth", and you get the same outcome. These people have a grotesque amount of influence over everything.

As I said, even if you'd just destroy all their wealth/power, you'd still get a better society, because politicians wouldn't constantly try to do the bidding of these people and instead tackle the real problems that we have.

> You might as well say "societal power" instead of "wealth", and you get the same outcome. These people have a grotesque amount of influence over everything.

Yes, I’m not arguing against redistribution of wealth (or power or influence or whatever you want to call it). I’m interested in the details of how it can be accomplished. Money is simply the most technologically advanced way we have of moving “power” around, but exactly how power gets converted to money is a big question, and one that frequently involves winners and losers.

> As I said, even if you'd just destroy all their wealth/power, you'd still get a better society,

I agree, and typically this has been accomplished with violence/war. I’m just trying to see if anyone has any good (and “fair”) ideas on how to accomplish it without violence.

I have an aunt and uncle in SF Bay Area who worked their whole life and saved for retirement, but didn’t assume that the land under their house would be worth $2.5M in their old age. What should happen to them? They certainly don’t have the cash flow to afford a proportionate property tax without having to move away. I don’t know a good answer either, maybe some people just have to end up screwed.

We're not talking about old people here that acidentally stumbled upon something that has really sentimental value to them but is also worth 150 billion.

Stop mixing billionaires and millionaires.

Having billions is unfair by definition.

All I’m asking for is some specifics. Is someone with $999M “worth” of assets not forced to sell than someone with $1B? Is it setup marginally so anyone over $x is forced to sell y%? What are x and y? That is what I’m interested in.

What if the sale price doesn’t match up with the valuation amount? What happens if a majority shareholder is forced to sell and it results in them becoming a minority shareholder? Does that mean one is forced to give up control of their business after a certain size?

Yeah, we all agree extreme income inequality is bad. That’s the easy part.

> What if the sale price doesn’t match up with the valuation amount?

Then you don't have to sell as much as you thought.

> What happens if a majority shareholder is forced to sell and it results in them becoming a minority shareholder?

Works as intended. Companies this size should be broken up under monopoly laws anyways.

> Does that mean one is forced to give up control of their business after a certain size?

Now you're getting the spirit! Also, monopoly laws.

The maximum capital gains tax in the 50s was 35%. Doubling the current 20% would be the highest in history.