People absolutely make that argument about property taxes. That's where deferrals or abatements for e.g. elderly or low-income homeowners, or caps on property tax increases come from. Someone may own a home that property taxes price them out of, forcing them to leave their community because they can't actually conjure money from a higher priced home.

I think a lot of tax authorities also don't really aggressively reassess that regularly without a sale, so it also kind of ends up baked in that if you didn't pay that much for the property, it's only theoretically worth that much.

The only reason it works with real estate is because they can put a lien on the house and block the sale of it. They don't have any useful mechanism to stop the sale of a share of stock, but since the government is involved in the transfer (due to the registering of the new house deed) of a house, they can stop that one.

I feel like there's think tanks thinking up talking points that sound reasonable to convince internet communities against taxing the wealthy.

> It's strange that people always make this argument for wealth taxes, but you rarely hear it about property taxes.

I don't like property taxes either, and at minimum would rather they were called something else, and preferably replaced with per-service charges where possible.

But either way they exist to pay for things, and not to just degrade the value of your property simply because you worked to own it.

Property taxes are use taxes, not wealth taxes. Apples and oranges.

If I sell my house, there's a reasonable expected range of money I can expect for it.

If a majority stock holder in a company sells all of their stock, the price first the first share sold is likely going to be completely different (and substantially less!) than the last share sold.

It's like saying cash isn't real until you spend it. Which is true in one sense but not what they mean.

The obvious correct solution is to tax securities-backed loans the same as selling the securities.

Your 401k/Roth IRA (subtracting early withdrawal penalty) amortized over the loan period literally do count when considering qualifying income for a conventional mortgage. This is not a taxable event. You do not actually have to make distributions. It's just standard procedure that it counts when determining whether you can pay the loan.

> Meanwhile billionaires have convinced you – through their machinery of media, influencers, politicians and more – that this exact same reasoning absolutely cannot be applied to their own wealth.

Quite the opposite: Socialist politicans and their media lapdogs have dishonestly convinced you that wealthy people are escaping taxes en-masse by taking out loans and that this can only be stopped by eye watering wealth taxes. They frequently use a motte and bailey confusing unrealized gains (which certainly exist in huge amounts but are also significantly fiction) with tax escape via loans collateralized by securities.

But it's not true: were there meaningful tax escape that way it could be addressed by establishing rules with conditions where taking a loan against securities can be treated as realizing gains (and adjusting cost basis accordingly). Doing so would be minimally disruptive and distorting and have relatively little legal complication (at least compared to wealth taxes!).

But the reality is that the claimed tax escape isn't happening (at least not at any significant scale) particularly in the current interest rate environment, so a reasonable policy change to address it would be a no-op.

... and to grow and maintain their political standing they specifically need to push a NON-SOLUTION because they can't campaign on something that was simply done and solved, and to retain your (highly monetizable) attention they need to rile you up against an Enemy, and certainly never address the state's addiction to wasteful spending and buying votes with tax dollars as one half of the revenue vs expenses equation.

Incredibly terrible example because you are allowed to borrow money against a 401k, up to $50000 with no penalties as long as you pay yourself back at whatever schedule you have determined for yourself

So why isn't the suggestion to tax the loan instead of the asset (that is 10x more volatile than say property)?

>into essentially unlimited untaxed cashflow

Loans must be paid back. Loans are cash flow neutral (cash flow negative with interest) over the maturity. That's why loans are not counted as income.

What evidence do you have that people borrow against assets as some tax avoidance strategy? What are the details of this brilliant, often repeated plan? In particular, where do you get interest rates that are low enough to make it worth it to avoid capital gains even with an asset that's grown 100x over its cost basis (and are you accounting for reinvestment of income like dividends that can't indefinitely defer taxes, creating regular tax lots with higher basis that you could sell first)? e.g. are they getting better interest than SOFR somewhere?

You will find that the centi-billionaires will find a different way to turn their illiquid wealth into personal power and value in a way that avoids that tax.

even still, the government can propose a value, and if the owner thinks its worth less than that, the government can immediately confiscate the asset and pay that price as compensation.

if the owner thinks its worth more than what the government proposes, they can pay tax on the higher amount.

its still not that hard

There is no way to take anything like that. Net worth is quite similar with me saying you are worth 1 billion dollars, but you have zero money in the bank. What do you take, super-rich billionaire person?

Because that would involve seizing assets? The parent meant it's not "real" in the simple-minded sense that people think it is: the average person imagines Elon Musk and other billionaires have a checking account that keeps increasing by tens of thousands of dollars per second because that's the only frame of reference they have. The reality is the wealth is mostly tied up in assets that ain't exactly liquid. Yes yes, they apparently have access to this supposed infinite money glitch where banks will endlessly loan them money without requiring interest payments (which would require liquidating assets for payment and therefore triggering a taxable event, the very thing people think never happens for billionaires). But the fact of the matter is the wealth isn't money in a bank, and therefore not "real" in the sense the parent was referring to. But it is at the same time something they would miss if it was just "taken away", much the same way you'd miss the numbers in your 401k if voters decided you had a few too many millions saved up for retirement.

Well one thing is, they'd sell shares to pay the taxes. Then dilute their own ownership of the thing (Tesla, Amazon) and it would serve as another form of wealth distribution.

Depends -- can I use the 10B as collateral?

If you have $2bn worth of the same listed stock and go sell half of those, now you have a net worth of $1400m because your gargantuan order drained the order depth, tanked the stock value and triggered a panicked selloff at the stock market which further drove down that stock's price.

You can't take net worth away because it's just an estimate of what someone is worth. It may eventually be possible to turned into dollars and cents without losing too much in the process, but almost universally it can't immediately be exchanged in such a fashion.

Even more so when we're talking shares in a company that is not yet public, e.g. a founder's shares. At that point the valuation is complete speculation, based on what the company may be worth in some hypothetical future IPO. There's no actual price discovery since there's no public trading of such shares.

Net worth is usually not fully realizable unless it is in the form of cash. The larger the net worth, the smaller the realizable fraction usually is. In some cases, including some highly visible billionaires, the realizable fraction is likely tiny.

I agree that that's the major problem; the poverty is inexcusable. But that's not caused by the $300B (or whatever) of equity. It's caused because the homeowners of the Bay Area decided that once they got a house, nobody else should, and that they should get to exclude others from the opportunities they had.

This same thing was observed during the Gold Rush in California in the 1800s; extreme wealth also resulted in extreme poverty. And there's a great way to solve this: tax the land and redistribute it equally to everyone. Land can't be moved, it's something that belongs to all of us, and you can't make more of it.

This is almost completely traceable to Californians' failure to allow sufficiently dense housing to be built on their doorsteps. The only thing Larry did was bring prosperity to the region.

(I'm in agreement with the thesis of the article)

More taxes should solve that.

Read somewhere that SF spends roughly 50k$-80k$ per homeless person per year.

Taxing more doesn't solve a massively inefficient system at it's core. Just like US education, we spend more than any country on earth, why is it still bad?

Answering that question with a "if only we had more money" is a really poor argument. The CA tax fundamentals are bad, pooring more cash onto the fire will not fix that.

This has basically nothing to do with with market cap of Google or Larry Page's percentage ownership of it; and the state government taxing it more will not make this situation any better.

that has ZERO to do with the tax system... You can't be serious? Have you looked at the data at all? have you seen how much money is spent "combatting" homelessness in San Francisco?

just not his problem. not a single motherfucker on this website lives their life as if wealth disparities are a genuine problem anyways. you are motivated by resentment

Why does it matter how much the shares of his company are worth? They just represent ownership of a company. It's not like their existence is somehow holding back wealth from the market or from other people. And if he wants to sell the shares to make some cash, then he's going to have to pay taxes on that, which is good for everyone else. And he wouldn't do that unless he planned to spend or invest the cash receives, which is also good for everyone else. I fail to see the harm.

I think one could argue that taxation should be higher, and harder to dodge, and I would agree with that.

But once you start saying that some people shouldn't have more than others to some degree, that's a very slippery slope. Where do you draw the line? Why is it okay for middle class Americans to buy nicer clothes and move into bigger apartments when people are out there starving? If it's not okay for someone to have the net worth of Qatar, why would it be okay for someone to live in an apartment that's worth more than a poor township in South Africa?

At some point we have to accept that inequality exists, and that although almost everyone could do something to minimize it, there's an ethical and practical line that needs to also respect individuality to a large degree, if we want people to feel incentivized to do things, to feel ownership, to maintain autonomy. And where to draw that line is tough to say exactly, but it probably shouldn't be a line, it should probably be smooth, or at least smooth-ish. So I feel like we're just coming back around to progressive taxation. Which we already have.

Sure, yeah, but which of the two numbers I was multiplying together is, in your mind, too big, and should be made smaller, and by what mechanism?

Why?

What if they provided value of 10x of the GDP of Qatar?

Well, why does something have to be done about this, exactly? Who is getting hurt here? It's not like borrowing is increasing his net worth. Just like anyone else, he has to pay back what he borrows, he immediately owes an equal debt. And that requires actual income, which gets taxed.

Larry has sold tons of Alphabet stock and paid lots of capital gains taxes. This is easily available public information. The whole buy-borrow-die thing is sort of a stupid myth. Actual centibillionaires diversify because the risk of having a huge concentrated position is much greater than the liability of having to pay some capital gains taxes.

Then you'd have two (or three, or four) companies that Larry owns 5% each of that are collectively worth $4T.

Google doesn't have much power. It can't arrest you or pass laws or vote. It just happens to produce a lot of profits for its shareholders (who are, overwhelmingly, average people with 401Ks) and a lot of profits means a big market cap.

If we need revenue to fund useful government programs, great, let's tax Larry. But I don't understand what problem is solved by expropriation qua expropriation.

> And care about the rule of law. You cannot pass retroactive laws, you cannot pass laws that target individual people. If you pass a general law...

A wealth tax is not a retroactive law, nor something that targets an individual person. It's a "general law" in your parlance. Think about it.

> If you pass a general law (which could very well have reasonable objections), people have to have a chance to leave.

I don't think so. By what legal authority is that required?

> "I'm passing this law that is effective the exact millisecond I sign it, tough shit if you don't like it" is tyranny and despotism. But based on your comment I think you know that.

No, it's not, and don't be ridiculous. When they passed laws against date-rape, would you have judged it "tyranny and despotism" unless the law was delayed to give the date-rapers time to finish up the date-rapes they'd planned?

There's no justice in giving the wealthy the maximum opportunity to pick and choose the laws that apply to them.

The richest people in the world sure are lucky to have good people like you out here fighting to protect their rights

ah yes, all the tech billionaires of this era, had they been given the heads up that there success would have led to a level of concentration of wealth and power previously unknown to humanity, and that the populace would likely call for some changes to tax law to address the largely unforeseeable structural economic effects of this level of change they brought, would certainly have opted out, leaving the US, and moving to another less tyrannical part of the world, where, by the unique magnitude of their genius, they would have brought all their great works to the glory of other nations and not to America with its overly entitled peasants and social media sharecroppers; clearly the rule of law in Europe and China would have allowed them to fully manifest their unparalleled vision of technological greatness without any concern of a rug-pull by authorities challenging their well-deserved hegemony