- This topic has 9 replies, 3 voices, and was last updated 1 year, 5 months ago by
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https://x.com/hagaetc/status/1857676671572435016
https://x.com/Austen/status/1857821054837862535
Long story short, Norway instituted a tax on unrealized gains. Founder flees Norway for Switzerland. Another startup whose valuation jumped, then dropped, is left bankrupt because he doesn’t have the cash to pay the tax after his equity value dropped.
Now the media is landing the Socialist Party for having a wall of shame of people who left Norway to avoid the unrealized gains tax,
Apparently Denmark did something similar.
https://x.com/jonatanpallesen/status/1857753442208362872
Half of Norway’s largest taxpayers have left. Their response? An exit tax of nearly 40%. Gavin Newsom is thinking of doing the same, by the way.
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It’s stupid to tax paper gains on founder’s shares. There’s no quicker way to stop new company formation.
The unrealized gains tax is a dicey proposition. On one hand you have founders getting crushed. On the other you have wealthy people using capital markets to borrow against inflated assets to avoid realizing gains. To me, that’s income.
Maybe fix the income problem by taxing gains on shares used as personal collateral and you won’t have to stick it to founders.
GR always had interesting takes on the wealth tax. I was intrigued by piketty’s take on it as an alternative to war and major economic dislocations Piketty’s thesis was that capital always outgrows economies, and always ends in massive misallocation of capital.
I think the adage that we get less of things we tax comes into play here. We should tax idle and generational wealth, and subsidize founders and hard work.
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Sic transit gloria mundi (so shut up and get back to work) -
I think the adage that we get less of things we tax comes into play here. We should tax idle and generational wealth, and subsidize founders and hard work.
Totally agree. But I feel as if we do the opposite. It seems to me that we don’t tax the 1%ers much, we crush the 5% to 10%ers, similarly crush everyone else and let the bottom fifth slide (which Im fine with).
So how does that change…keeping in mind there’s not a prayer Kamala could have done that. Next Dem president might, though.
Audaces fortuna iuvat
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I would be fine with taxing first generation capital gains at zero.
At the end of the day, I think the best tax approach would be a relatively low, flat tax on any and all income and gains, with a standard deduction amounting to something like 75 percent of the median taxpayer’s income from the prior year. I wouldn’t even have an issue making part of the deduction refundable to alleviate poverty and encourage tax filing.
I don’t think taxing unrealized gains is a good idea, but would absolutely treat a loan against highly appreciated assets as income. Yes, that includes your home equity loan. If somebody will lend you money against it, then it has tangible value and you are creating synthetic liquidity.
You can add the tax to your cost basis when you cash out.
The problem with our tax system is too many people get rich helping others navigating it. A legion of accountants and investment advisors would be out of work if a simple tax mechanism were put in place.
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Sic transit gloria mundi (so shut up and get back to work) -
https://x.com/LokiJulianus/status/1858411726670106963
Inheritance taxes on large estates are fine, but if the intent is to seize land for redistribution, I don’t think it is good policy. Also, to the extent motivation to leave money / property for the next generation is necessary to keep civilization going, let’s encourage that….
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Here’s the challenge: if we don’t try to solve the problem with a scalpel, the next generation will try to solve it with a cleaver. So when the Republicans are out, and they’ll be out in four or eight years, the incoming Dems will create a tax catastrophe. Trump (and everyone else) likes low taxes, but 60% of the country benefits from some kind of government giveback, and it will only increase as the Baby Boomers continue their retirement.
Audaces fortuna iuvat
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https://x.com/Emma_A_Webb/status/1858212410017939581
When the government spends 3x tax revenue, no amount of taxation will be sufficient. Fostering government dependence has created an all or nothing political environment, which leads to polarization. The founding fathers recognized how dangerous concentrating power was, and explicitly instituted checks and balances.
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Theoretically, I would prefer a very low income tax and a very high estate tax, but as you note, the issue is with the concentration of power. The ideal for me is to die with zero or darn near it. That means I would hope to give away pretty much everything before death. That way the government gets very little.
I don’t know how workable that is, but it’s the ideal. If the point of an estate tax is to increase tax revenue and concentration of government power, then I’m not for it. If it is to return assets to circulation in younger generations, then I’m all for it.
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Sic transit gloria mundi (so shut up and get back to work) -
https://x.com/ArchRose90/status/1858858897991188730
Glad to know that the BBC’s journalists have the same argument skills as ours. I enjoy “Clarkson’s Farm,” which is an indictment on all the regulations on growing food and trying to make a living in agriculture.
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Theoretically, I would prefer a very low income tax and a very high estate tax, but as you note, the issue is with the concentration of power. The ideal for me is to die with zero or darn near it. That means I would hope to give away pretty much everything before death. That way the government gets very little. I don’t know how workable that is, but it’s the ideal. If the point of an estate tax is to increase tax revenue and concentration of government power, then I’m not for it. If it is to return assets to circulation in younger generations, then I’m all for it.
This would probably be good for revenue, given the amount of Silent and Baby Boom generation people who are going to pass over the next two decades. Probably be good to incentivize and compensate workers as well. Makes sense, if you think about it. Work hard all your life, pay for it at the end.
Audaces fortuna iuvat
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