Remembering TCPaul, 2016-2019

Wealth Tax Mechanics?

How would this work for multi millionaire/billionaire if mos irishlaw01/30/19
Yea, this could be a real problem. They say you have 5 year doublefriedchicken01/30/19
That's why options killed people. Recruited by Company X, wh trijocker01/30/19
Options were taxed at some unrealized value? Are they still wutwutwut01/30/19
It was a big issue for tech workers in early 2000s Silicon v trijocker01/30/19
Yowza. Thanks for the info. wutwutwut01/30/19
just to clarify, the option wasn't taxed. When they exercis dingbat01/30/19
this is a load of bull. For any company worth 100 million dingbat01/30/19
I thought the gift and estate tax would work. You just need superttthero01/30/19
I'm all for a greater estate tax 1) I'd rather tax the de dingbat01/30/19
I'm all for a greater estate tax 1) I'd rather tax the de dingbat01/30/19
It’s issues like this that make a real wealth tax a stupid wearyattorney01/30/19
but that's always been the problem. There are great tax exe dingbat01/30/19
Yes, this is my point. The one thing you can’t get around wearyattorney01/31/19
We could start with closing all the tax loopholes that cater onefortheteam01/30/19
Never going to happen. Ever. Well just tax wage salves in wearyattorney01/31/19
Never going to happen. Ever. Well just tax wage salves in wearyattorney01/31/19
Or just force them to pay what you say they owe and if they gladigotaphdinstead01/30/19
Seriously guys...THEY JUST DID THIS TO CORPORATIONS UNDER TA bangbus01/31/19
Isn’t this a one time tax and now Corporations can shuffle irishlaw01/31/19
Wealth taxes at the fed level are unconstitutional. rastaman01/31/19
Well you heard it here folks. Rastaman says it’s unconstit gladigotaphdinstead01/31/19
Well, is it not unconstitutional? A wealth tax would be a di rastaman01/31/19
You can tax people for existing. You can tax their land. You midlaw01/31/19
There is no federal authority to tax real property or wealth rastaman02/01/19
Rasta, take it easy on GIGAPI. Remember that although h wutwutwut02/01/19
you’re such a tool gladigotaphdinstead02/02/19



irishlaw (Jan 30, 2019 - 4:49 pm)

How would this work for multi millionaire/billionaire if most of their wealth is tied up in securities and other types of investment assets?

Force sale or would the government take control of those assets?

What kind of effect would this have on the securities market? If it causes a dump this might have a negative effective on retirement accounts and pension plans for average citizens.

In a way we already tax wealth (property tax) but is it feasible at such a high percentage of wealth?

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doublefriedchicken (Jan 30, 2019 - 5:21 pm)

Yea, this could be a real problem. They say you have 5 years to pay for it.

Suppose you have a startup that is worth $5 billion (all paper). So you file to pay 2% (100 million) in 5 years.

Then the technology changes and the startup is worthless. Tax bomb. Kind of like student debt but at higher levels.

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trijocker (Jan 30, 2019 - 5:46 pm)

That's why options killed people. Recruited by Company X, who was just the latest and hottest, they took stock options in X. Then when Co X's product lost its luster, which they all eventually do, the options were essentially worthless. But the poor employees still had the tax bomb.

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wutwutwut (Jan 30, 2019 - 5:48 pm)

Options were taxed at some unrealized value? Are they still? I always just assumed they were taxed once the gain was realized.

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trijocker (Jan 30, 2019 - 6:23 pm)

It was a big issue for tech workers in early 2000s Silicon valley.
They felt like they had finally made it, and were millionaires, at least on paper.
Then when the stock value plummeted, they had a huge tax bill on money never seen.

https://www.chicagotribune.com/sns-tech-taxes-story.html

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wutwutwut (Jan 30, 2019 - 6:27 pm)

Yowza. Thanks for the info.

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dingbat (Jan 30, 2019 - 8:57 pm)

just to clarify, the option wasn't taxed. When they exercised the option, they received high value stock as deferred compensation, and were taxed on that compensation.

This is no different than being paid $1 million, invsting it in a dodgy stock, and losing all your money before your taxes are due


Also, they should have exercised an 83b election years prior

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dingbat (Jan 30, 2019 - 8:53 pm)

this is a load of bull.

For any company worth 100 million or more, there are liquidity methods out there.
And no company worth 100 million or more has completely imploded leaving nothing in their wake.

I remember doing business with Arthur Andersen in 2015, FFS
Facebook's value is not their technology, but their userbase. And even if everyone suddenly stoppued using facebook tomorrow, their vast data trove is still worth a small fortune

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superttthero (Jan 30, 2019 - 6:18 pm)

I thought the gift and estate tax would work. You just need to close a lot of trust, business ownership loopholes and hammer down on citizens moving large amounts of personal wealth out of the country.

Put in some common sense, for the good of the general economy exemptions, like family farms, but be draconian about it in and heavily progressive (e.g. set a limit that you can't pass more than $50M in wealth to your heirs in the aggregate).

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dingbat (Jan 30, 2019 - 8:57 pm)

I'm all for a greater estate tax

1) I'd rather tax the dead than the living
2) it levels the playing field a lot more

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dingbat (Jan 30, 2019 - 8:58 pm)

I'm all for a greater estate tax

1) I'd rather tax the dead than the living
2) it levels the playing field a lot more

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wearyattorney (Jan 30, 2019 - 8:31 pm)

It’s issues like this that make a real wealth tax a stupid idea. Kushner is going to be exempt by some anathema compromise between Rhinos and Dems and the kid that cures cancer in his basement is going to get ruined.

The only rational answer is perma labor shortages. Keeps the idle rich, the real problem, in check. It also keeps the more malicious wealthy types like Bezos in check.

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dingbat (Jan 30, 2019 - 8:59 pm)

but that's always been the problem. There are great tax exemptions for the superwealthy that ordinary people either can't take advantage of, or don't have access to the right advisors about.

Even something as simple as a 1045 exchange, most accountants don't even know about.

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wearyattorney (Jan 31, 2019 - 5:25 pm)

Yes, this is my point. The one thing you can’t get around is having to pay people to do things you don’t want to do, which for the idle rich is pretty much anything.

The top and the bottom hate the same individual: the person who produces. The top hates this person because he or she can supplant them and because of envy, and the bottom hates them because of envy.

That’s why the compromise always works out to hammer the productive capacity.

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onefortheteam (Jan 30, 2019 - 9:15 pm)

We could start with closing all the tax loopholes that caters to the rich, chiefly the carried interest deduction.

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wearyattorney (Jan 31, 2019 - 7:13 pm)

Never going to happen. Ever. Well just tax wage salves in the 150-300k bracket harder.

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wearyattorney (Jan 31, 2019 - 7:13 pm)

Never going to happen. Ever. Well just tax wage salves in the 150-300k bracket harder.

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gladigotaphdinstead (Jan 30, 2019 - 10:07 pm)

Or just force them to pay what you say they owe and if they don’t send them to jail like every other tax dodger and quit worrying about what ifs.

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bangbus (Jan 31, 2019 - 1:17 am)

Seriously guys...THEY JUST DID THIS TO CORPORATIONS UNDER TAX REFORM.

why wouldn't this work for individuals?

ALL CUMULATIVE FORIEGN EARNINGS HELD BY US CORPORATIONS was taxable immediately and most of that money was in securities.

Although at a reduce rate...lol and over 8 years if you made the election.

Look up the transition tax.

Seemed to help the securities market, but the transition tax was truly a tax cut and turned a deferred tax into a semi-current tax.

Most of us had already accrued some form of a liabilty for this on our balance sheet

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irishlaw (Jan 31, 2019 - 9:44 am)

Isn’t this a one time tax and now Corporations can shuffle money between foreign holdings on onshore holdings tax free...or something of that nature?

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rastaman (Jan 31, 2019 - 5:41 pm)

Wealth taxes at the fed level are unconstitutional.

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gladigotaphdinstead (Jan 31, 2019 - 6:44 pm)

Well you heard it here folks. Rastaman says it’s unconstitutional, so that puts this question to rest.

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rastaman (Jan 31, 2019 - 9:26 pm)

Well, is it not unconstitutional? A wealth tax would be a direct tax, which is specifically prohibited. Yes, the 16A allows for direct taxation of income, but we have over 100 years of precedent clearly defining what income is and isn’t. And the wealth tax, as understand by the great legal minds of JDU, is not an income tax.

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midlaw (Jan 31, 2019 - 10:05 pm)

You can tax people for existing. You can tax their land. You can tax their income. You can tax the sale of their goods. You can tax wealth.

Article I, Section 8: "lay and collect taxes, duties, imports, and excises."

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rastaman (Feb 1, 2019 - 11:35 am)

There is no federal authority to tax real property or wealth as these would be unapportioned direct taxes. See Article 1, Section 9. The 16A excepts income from this requirement.

You can tax ppl for existing so long as all pay the same amount. That’s an apportioned direct tax.

Sales taxes, import duties, tariffs, gas taxes, etc are indirect taxes.

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wutwutwut (Feb 1, 2019 - 11:45 pm)

Rasta, take it easy on GIGAPI.

Remember that although he often inserts himself in legal discusions, he decided to forego any legal education to instead become an ultimately frustrated PhD applicant.

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gladigotaphdinstead (Feb 2, 2019 - 1:10 am)

you’re such a tool

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