POLL: Why Warren's wealth tax plan is the worst thing ever

Nov 12 71 Comments

Warren's tax plan in one sentence:
3% wealth tax per year for >$1B and 2% for >$50M.

Why it is worst thing that could take US to deep shit:

Let's take the example of Bill Gates. Bill Gates is worth $100 Billion, but that’s almost entirely in stock. Under the Warren proposal, he would suddenly owe over $6 Billion in taxes.

In Scenario 1, he simply signs over $6 Billion worth of Microsoft stock to the federal government, and other billionaires do the same thing with their stocks, and the government is suddenly a major player in many large firms. That’s not good. Imagine the government owning millions of shares of major companies and meddling as activist investors (as you know they would).

In Scenario 2, he has to sell enough stock to raise $6 Billion in cash. When this happens, it represents as much capital flowing out of Microsoft as they normally see bought and sold over several days. With this much added supply to the equation of available stock, the price would go down, which would mean he would have to sell even more shares to get the cash he needs, which would drive the price down even further. He started out with a net worth of $106 Billion, he tried to pay his $6.1 Billion tax bill, and the stock price drops 10% because the market is flooded. He now has to sell more shares and the shares he has left are worth less, so the wealth tax of “only 6%” has suddenly dropped his net worth from $106 Billion to $85 Billion.

Now, imagine these scenarios playing out over 700 times as there are more than 700 billionaires in the U.S. who would lose a significant chunk of their assets.

That’s a recipe for a depression.

But wait, it gets even better!

Now we look at the fact that many of those people with >50M net worth own one single company that is worth like a $100M or so (imagine a sports franchise). Suddenly they are hit with a tax bill in the millions of dollars for which they have no readily available cash. They can’t sell their asset, because there’s not a huge demand and there are strict rules regarding the transfers of assets like that (and the folks who can afford to buy those assets are pretty strapped for cash themselves). What happens with these folks? Layoffs, pay cuts for employees, and bankruptcy. Woo Hoo!

Ultimately, all of these things would depress stock prices, and impact the common investors (as well as mutual funds, 401(k) plans, and pension funds). This might be one of the worst economic ideas in the history of the U.S.

Source: Scott Biddle
Link: https://www.quora.com/Considering-most-billionaires-only-keep-a-fraction-of-their-net-worth-in-cash-how-would-they-go-about-converting-their-assets-into-cash-to-pay-a-wealth-tax/answer/Scott-Biddle-4

Why would anyone vote for such shit?

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TOP 71 Comments
  • Google bcBF51
    This is the most biased question I have seen in the polls. There are millions of ways in which the money can be collected without the problems that you described.
    Nov 12 6
    • Fitbit oPfd6
      Maybe a solution could be not put every dollar you have into investing? If I put all my regular income into a house I can’t really complain about not being able to pay for yearly property taxes. Especially since it’s you know, yearly.
      Nov 12
    • OP
      I didn't put anything. Investors invested say $xM on that $250M valuation. So now should I keep borrowing $2M from investors/investment money every year for that wealth tax?
      And how will I? Take $4M as salary so that income taxes take away $2M and wealth taxes take away the other $2M?
      Nov 12
    • Sounds like a problem with your valuation not with Liz
      Nov 12
    • Redfin
      lisafrank

      Redfin

      BIO
      s
      lisafrankmore
      Literally millions you guys.
      Nov 12
    • New dVVl15
      "Maybe a solution could be not put every dollar you have into investing? " Industry and investment is literally the reason america is rich and other countries are poor and you want to stop this? You'd prefer if people stuffed their money into their matresses or spent it on trivial shit which the government can't tax them out of?
      Nov 13
  • Credit Karma EllisDee25
    Lol. I guess those 700 billionaires have a lot of boots that need licking.
    Nov 12 17
    • Microsoft baito
      “well not the 1% of wealth holders... has to work for a living.”

      Aww sweetie I didn’t know Bezos just landed on billions by luck. I thought he started his company in a garage and worked his ass off on getting it where it is. In fact most billionaires become billionaires by working not sitting on their asses. In fact what percentage of billionaires were born billionaires? Majority are self made

      https://www.cnbc.com/amp/2019/05/10/wealthx-billionaire-census-majority-of-worlds-billionaires-self-made.html

      That’s ok Credit Karma boot licker, just trying get your blinders off

      “Don’t be a racehorse with blinders on
      Always winning for some one else’s gain.
      Stand proud but be loose
      Be the wild horse dick, never be a bootlick!”

      I am sorry champ you are still the boot licker. You tell others to be free yet live off the scraps off your corporate overlords. It’s not nice to say but it’s true

      I work for myself, I switch companies almost every 2 years and every two years and get a huge bump each time. It’s mutual agreement see. I can leave anytime or they can fire my ass if they want. Gotta be mobile. Not be stuck in the same job miserable job eyeing other people’s money. Be better than that
      Nov 12
    • Credit Karma EllisDee25
      “Master started off with only one small field. Now he owns near 200 people. What a man!”
      Nov 12
    • Microsoft baito
      Wait Credit Karma owns you and doesn’t pay you, and you can’t leave on your own?

      Just sad to equate the current state to slavery. Just fucking sad. You are getting lazy comrade Johnmy
      Nov 12
    • Credit Karma EllisDee25
      No, no, I wasn’t comparing slave work and wage work. A direct comparison would be preposterous. I was comparing your attitude to that of a house slave.
      Nov 12
    • Microsoft baito
      Why cause I appreciate people who created companies which helped an immigrant like myself get out of abject poverty.

      Lol you rather I suck of the government tit. That’s the lazy life you may like as commie parasite but I prefer to work for a living
      Nov 12
  • Salesforce dqvkwd
    That sounds like a restated trickle down argument
    Nov 12 0
  • OpenTable Meliodas
    The government doesn’t take stock and tax changes aren’t instantaneous.

    Folks would have time to sell stock before the tax is due, or they could enter into payment plans with the government.

    Your arguments are only appealing to those that don’t have any experience with how tax law actually works.

    Or, rich people could invest their wealth into something that returns more than 3%. Not an unreasonable ask.
    Nov 12 12
    • Amazon / Mgmt Db8db4
      You argue for wealth tax... You don't know what you are talking about.
      Politicians will enact a spend and tax law. Billionaires will leave, the spend part will stay. To balance the budget politicians will lower the criteria until it hit people who cannot leave anymore (with way more people affected to compensate).
      Top 1% pays 40% of all income tax, middle class pays most of the other tax.
      Wealth tax be the same soon enough. With additional burden of all job creators gone. So there will be a recession too.
      Unless you schmooze top cream to not pay any taxes, which will result in same issue we have today.
      No, you don't understand how things work.
      Nov 13
    • OP
      @Meliodas
      I pay taxes on income+profits+sales tax too. Is this still less? If yes, the government has a serious problem.
      If this gets enacted, I will be the first one to denounce US citizenship.
      Nov 13
    • OpenTable Meliodas
      Billionaires won’t leave. Where will they go?
      Nov 13
    • OP
      Oh shit! Now I realized that you will get taxed even if you leave US citizenship, kind of 'expatriate tax'. So there is no way out of this.
      Best way is to not startup in US at all!
      Yeah, you are right! Now people will be 'forced' to pay.
      Nov 13
    • Amazon / Mgmt Db8db4
      The tyranny is here. And somehow in comparison it is still leaps and bounds better than what Warren proposes.
      Nov 14
  • Google AtіnlayXVI
    Once Warren loses the primaries the dems are going have this hanging around their necks in the general election.

    This is the best free advertising for Trump since Beto.
    Nov 12 0
  • Google / Eng didact
    Wealth tax is just double taxation. Fix the issues with the initial tax first.
    Nov 12 0
  • Facebook liam
    You are missing second part. Employees would have 40% vote by Warren. If you combine it with necessity to sell 3% of founder's stock/year, it means end of private property.
    Fuck Bill Gates, the problem is
    1) If I want to start a new startup I should first renounce my US citizenship.
    2) VC would demand that as well as doing it outside US, noone would invest in founders who would loose control.
    Nov 12 3
    • OP
      Yup that's what I said in my previous comment.
      Nov 12
    • Facebook liam
      Oh wait, she also wants tax unrealized gains. Hello to all unicorn employees.
      Nov 12
    • OP
      Oh yeah, I missed that. So, unicorn employees need to take loans to pay wealth taxes?
      Nov 12
  • Sorry if I don’t have much sympathy for the “rich football owners can’t liquidate their teams poor them” argument

    More publicly owned teams like the Packers would be a good thing anyway
    Nov 12 1
    • Microsoft baito
      Wonder what happens when you liquidate stocks?

      Wonder what happens when stock values crash because of selling of stocks

      Wonder what happens when ....

      I am a farmer with acres of land worth millions. I barely break even. So I should......

      Yeah this is fucking dumb
      Nov 12
  • Amazon / Mgmt Db8db4
    With 2% wealth tax it will take 25yrs for the state (not people) to own 50% of all companies. Pure socialism in just one generation.
    Nov 12 8
    • Microsoft baito
      Whatever happened to USSR?
      Nov 12
    • Credit Karma EllisDee25
      Depends on who you ask but, long story short, people still drink vodka.
      Nov 12
    • Microsoft baito
      .... and communism has failed miserably whenever tried. Oh yes not your particular flavor of communism of course
      Nov 12
    • Credit Karma EllisDee25
      ...and capitalism fails constantly by design. Oh yes, but that was crony capitalism not your boot flavor of capitalism of course.
      Nov 12
    • Microsoft baito
      Nope love it in the system, wouldn’t wanna be any place else. I take vacations, have a nice house, two cars, have saved up for my kids education and have a diversified portfolio. Wouldn’t change a thing. Maybe less taxes
      Nov 12
  • Credit Karma MeatClub
    You act as if it’s so easy and legal to move and hide money in other countries. What kind of scoundrel views the world like that?
    Nov 12 8
    • Credit Karma MeatClub
      Yet you continue to engage
      Nov 12
    • Snapchat QaH7er3PxL
      Lol u serious? What's illegal about that?
      Nov 13
    • Credit Karma MeatClub
      What’s illegal about Tax evasion?
      Nov 13
    • Instasize cplus
      Tax avoidance is not the same thing as evasion and it’s not illegal. Even people of modest means have ways to move their wealth at a country in in the shelves. The more well do you have the more options you have. Hard to see that changing ever. You know this is why you’re of rolled back all of their wealth taxes that they tried 30 years ago. Shit doesn’t work at all
      Nov 13
    • Credit Karma MeatClub
      I know about accounting. Those rules are what the conversation is about. There can be a rule set up and enforced to address every error in your argument. For instance, the ownership of the assets could be simply put up as collateral for interest free bond notes issued by the Billionaires in the form of interest free loans to the US Govt. The leverage there could then be used to create much needed infrastructure and healthcare stimulus spending. There can be all sorts of FEC black outs, unwinding position rules, etc. that do not impact the state of MSFT stock by a single penny but create meaningful cash flow and stimulus rather than penny hoarding and buying multiple Ferraris and hundreds of empty summer home mansions
      Nov 13
  • Uber zzzz5
    Oh no, will somebody please think of the billionaires!?
    Nov 12 3
    • Amazon / Mgmt Db8db4
      "On June 16, 1909, President William Howard Taft, in an address to the Sixty-first Congress, proposed a two percent federal income tax on corporations as well as ratify previously enacted income tax of 2% of people earning over [modern day $116,000]." And look where we are now, from 2% income tax to almost 50% for California. (With times of 90% rate to corporations)
      So no, it's will not stop with billionaires.
      Nov 12
    • New dVVl15
      If you actually read the original post you'd realise your response is childish.
      Nov 13
    • Credit Karma MeatClub
      No, the article’s False dilemma is childish.

      https://en.m.wikipedia.org/wiki/False_dilemma
      Nov 13
  • Microsoft / Eng dKWp30
    Ah, the source of truth ... Quora.
    Nov 12 0
  • ITT: Warren supporters choke on their own ignorance
    Nov 12 0

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