Here is a 2015 Stanford analysis of the impact of venture capital backed companies. The importance and contribution of companies that were started with venture capital has only increased. Venture capital backed companies are now well over half of the value of the SP500 stock index.
Tax increases get passed along. The rich run the companies everyone buys and gets their goods and services. The National Bureau of Economic research reports that adding a tax increase of 1 percent lowers GDP by 2-3 percent.
Tax changes have very large effects: an exogenous tax increase of 1 percent of GDP lowers real GDP by roughly 2 to 3 percent.
Proposing exogenous tax increases of 10% would reduce GDP by 20-30%.
25% taxes on unrealized gains would destroy the startup and venture capital economic engine.
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Anyone who borrows against their assets should pay tax on that amount equal to ordinary income tax FICA included. Full stop! Screw the wealthy who earn passive income and don’t know how to use a mop or clean a toilet. The world would continue on without those freeloaders! Stop printing money and give ordinary workers who are savers a chance to invest for real returns. Taxes are not the problem. The lazy wealthy and the lazy welfare classes are the problem. Bottom line. If you do not build or maintain things there are no things. Nonworking consumers be damned. The two cents of an essential worker.
The envy I hear is strong. Why do you hate the successful? The article clearly points out that the rich use VC to start business. So without them we won’t get by as you say since they are the ones who create businesses. I don’t believe in rewarding those that don’t work sure but the wealthy do work that is why they are wealthy. Except politicians of course. They just steal money.
Maybe is not envy.
In the last 40 years the wealth produced in US increased 65 times (not 65%) yet the vast majority of the population holds a smaller and smaller percentage of the total wealth (that they contributed to produce). That is because only the wealthiest individuals and institutions can invest significant mounted of money to drain more efficiently the resources of the system, everyone else has resources only to do their job/run their business, while the superwealthy (and the super corporations) have resources that they can invest to:
-minimize their taxes
-actively lobby for laws that give them disproportionate advantages
-actively push to influence the media to convince the general population that their interests of the superwealthy are aligned with the common people (while they are not). For example claiming that taxing unrealized gains will impact negatively the future.
Taxing unrealized gains is foolish but giving people a lower tax rate just because they have excess funds to invest is also foolish.
Example. If a programmer works for years on a project, he gets taxed at a higher rate on gains, but an investor investing in the same program gets a far better rate. They should be equal.
One or two generations ago most executives had a salary which was taxed today many executives don’t receive a alary. Instead they get a stock option. A stock grant is taxed at the difference between the option price and the market t value of the stock . while the entire ammount of a salary it taxed. So CEO today are getting millions worth of stock per year and only pay a small amount of tax on it. They then can hold onto its for years without any tax. If they hold the stock for one year only 15% of the value of the stock is taxed at the time of the sale.
I think CEO that don’t hav e salary but get a stock grant instead should have it taxed like a salary. if taxed this way the stock grant tax would be about 37% of the value of the stock.
“many executives don’t receive a alary. Instead they get a stock option.”
So you think this is BAD?
What if the stock goes DOWN in value?
I WANT management being paid in stock rather than cash. This way they have a HUGE interest in making sure the company does well. If they screw up their ‘pay’ plummets.
I WANT them to delay cashing in the stocks… they then have a HUGE incentive for the company to continue to thrive in the future.
I NEVER understood anyone who thinks that the government is somehow going to spend investment money BETTER than incentivized capitalist.
An unrealized gains tax would be like killing the goose that lays the golden eggs.
If you tax salary, you should also tax stock options. Both are value transferred from a company to a consumer.
“A stock grant is taxed at the difference between the option price and the market t value of the stock”
That’s because a stock option is the option to *BUY* the stock at a given price. It’s not the stock itself.
So, if you’re given the option to buy 100 shares at $25 a share, (Total $2,500.) and the stock price at the time you exercise the option is $30 a share, you’re paying $2,500 to get $3,000 worth of stock. If the price is actually $20 a share, the option is totally worthless.
Naturally you only get taxed on $500: That’s all that you were given! The other $2,500 were your own money to begin with.
Wealth inequality in US increased by 50% in the last 40 years.
at the beginning of the 80s (1983 data) the top 1% owned approximately 30% of US total wealth, the middle class owned the 30-35% and the bottom half owned 2-3%, in 2023 the top 1% owned 45% of US total wealth, the middle class 25-28% and the bottom half only 1-2.
-Assets generating significant amounts of “unrealized gains” are held by the wealthiest part of the society even in a more disproportionate way compared to other assets. Taxing them provides fiscal revenues and reduces wealth concentration.
-Taxation on unrealized gains closes tax loopholes since wealthy individuals (and entities) often avoid taxes by holding onto appreciating assets and only realizing gains when it is tax-efficient to do so.
All the crying about the poor venture capital institutions and speculators that try to persuade us to let them concentrate even more wealth in their hands because it is good for the future… sure, their future. Historical data and numbers show otherwise: the wealthiest segments of society invested more and more mainly to concentrate more and more efficiently wealth in their hands, persuading those below them that it was for the good of the society while they disproportionally drained the society of its wealth. Cry me a river and pay up.
“Nearly 22 million people in the U.S.—roughly one in 15 Americans—had wealth upwards of $1 million last year, according to UBS’ 2024 global wealth report. ” — fortune.com
“February 27, 2024. Author: Brian Glassman. Nearly 327,000 people in the United States experiencing homelessness lived in shelters” — Census.gov
So for every homeless person in USA there are 67 millionaires… and you are COMPLAINING that the USA economy is UNFAIR!!????
Better homeless numbers
“Jan 26, 2024 — According to the 2023 count—which was released in December—homelessness rose 12% from January 2022 to January 2023, representing 653,104 people”
So for every homeless person there is ***ONLY*** ~33 millionaires!
The top 1% are SUPER wealthy and getting even richer… BUT their getting richer does NOT mean everyone else is getting poorer.
The economy is getting larger and more people are getting richer than poorer.
When the PERCENTAGE of wealth accumulated by the super rich increases it means that more of the wealth created get in their hands. It means that if 40 years ago a certain fraction of the population had let’s say 1000 dollars per month available to cover expenses and so on… now after 40 years maybe they have 2000 dollars available per month! o my god they got RICHER everything is great! Sure, but US economy grew 65 times (not 65%) in the last forty years, and the super wealthy before owned 1/3 and and controlled directly (in term of influencing investment of capitals they do not own) up to 50%, now they own 45% and control 60-70% of the wealth. They are telling you not to tax them because you have to be scared to lose that extra 1000 dollars, but in truth they drained trillions from what in proportion you had access if things grew maintaining the same proportions from 40 years ago.
As European living in America for years I was surprised by the average poor quality of life and service. Billionaires that finance private hospital persuaded the population that public health is bad, billionaires that have security details persuaded the population that is much better to arm yourself and have a violent police rather than reduce the number of guns around, and have better trained police, billionaires that enjoy tax loopholes worth millions/billions/trillions persuade the population that the solution to poverty is NOT TAXING TIPS rather than enforcing laws that protect contracts below a certain level, or weaken UNIONS (while all the data available prove otherwise). And when you tell them pay the taxes they scream that the sky will fall. It won’t. They just want to continue to drain the system.
Imagine dating a girl in high school then breaking up before going to college.
She sues you for $2 million dollars.
She says she would have married you, had 5 children and supported and pushed you to become the CEO of a major company.
She demands half of your unrealized gains.
NOW do you understand how unfair taxing unrealized gains is!
No one who reads this blog has 100,000,000 USD. Let me guess. Once they start at 100M, they’ll come after those with 0.5M any day, man.
Since the creation of this nation, There hasn’t been a single new tax that wasn’t expanded upon.
Further more rich people are needed for venture capital, without that, you don’t get new big companies, instead you get tiny ones that take decades longer to grow enough to mass produce new products.
Without mass production products will be limited production luxury goods, increasing the divide in services & products available between the poor and rich.
Oil? They’re in it for demographics. Unfortunately it’s costing the demographics of both sides of the family dearly.
Superintelligence will kill money anyway.
Nope, too useful for exchange and complete automation can only effect the cost of labor.
The scarcity of land for instance, will be mostly unchanged, while the cost buildings will lower due to automation.
Fact is anything scarce resource today can be affected to some degree, but no matter how much more gold you can mine with AI robots, you cannot drop the value to zero.
Same with art & antiques, or anything produced by hand.
Think AI is going to end fashion? 🤣
The only way AI ends money, is if it kills everything, including itself.
Speaking of the “scarcity of land” – all income, sales, and property taxes should be replaced with a national Land Value Tax, OR replace all state/local taxes with a Land Value Tax, OR do both, but then you’d need to tax essentially full rental value on all Land, pollution, location.
The LVT discourages hoarding & speculation by taxing it, while encouraging building & improvements by untaxing those. Unlike capital, or capitalists themselves, Land (in all its forms) cannot be moved offshore, hidden, and is relatively easy to value. Real estate agents do it all the time.
LVT is the most tested and proven tax ever. Even Milton Friedman called it the “least bad tax.”
It’s actually the most good tax: fair, progressive, and adjustable as Land increases in value. Capital decreases over time, but ROI goes to capitalists. Labor gets to keep what it earns, untaxed!
LVT predates its biggest proponent, Henry George, going all the way back to the land of ancient Israel. See “The Other Law of Moses” by John Kelly.
This might be true if the currency was honest.
Our Justin has proposed taxing unrealised capital gains but there is no currency deflator.
This effectively provides the government with a double dip- they devalue the currency and then tax the putative capital gain on real property. I rarely (never?) see this discussed and haven’t studied the Argentinian experience to see how they handle it.
Taxes on unrealized gains is a terrible idea that would crush investment in this country and could lead to more inflation or even hyperinflation.
If people can’t put their money into investements, then all they can do is spend it to keep from losing what value it has. That increases the velocity of money in the economy and leads to hyperinflation.
Since the backers of the Democrat Party are those who would be affected most by Harris’s ridiculous ideas I believe that they never will be done. They would be cutting their own throats. Nevertheless there are capitalists ready to finance their own demise. I just hope it is only a campaign trick.
The rich industrialists in Germany thought they could control Hitler too. That worked out real well.
If you’re worried about electing a Hitler then Kamala is not who you should be talking about.
You´r right: Kamala is more in line with Lenin.
Great choice America, Lenin or Hitler?
Except you had 4 better years under the supposed orange hitler & he didn’t form the 4th reich🤣
Hell despite opposition claims of insurrection, he turned back at the rubicon & relinquished power, he told his followers to go home despite still thinking the election was stolen from him.
you don’t know Kamala would do the same.
The choice is simple, You not only survived, you thrived under trump, & now you have a promise of not only continuing Biden policy, but now with added communist policies under Harris.
You do realize that the same media who told you Joe Biden was “sharp as tack”, Hunter’s laptop was Russian disinformation, Kamala was never the border czar (after years of calling her the border czar), Kamala is great, when just months earlier she was still nothing but a running joke, and as Kennedy just explained the corrupt media has been pumping up Kamala – out of nothing. This is the same media that has been churning out “orange man bad” propaganda since he did not play nice. In other words, you’re being gaslit.
Agreed. Can you imagine centi-millionaires like Nancy Pelosi or Dan Goldman allowing 25% of their capital gains to be taxed away before they even sold anything? Such a tax is worse than a loss, because it would come at the market’s peak, since the tax itself would cause a subsequent stock market collapse as every rushed to sell to pay the tax or invest their money elsewhere. Pensions – which are a Wall Street scam that doesn’t pay pensioners anyway – would be crushed.
Oh man… if this taxing of unrealized gains ever happens, this house of cards gon fall… hard. In the limiting scenarios could even lead to revolution and fragmentation of the state – both very tasty and only diminished by fear for my children’s future. I mean we’re going to have to default on our debt to the rest of the world, but is this the trigger?
Anyway, bring it.
But then I remember, we’re the thug state… we’re not sorry, we’re in charge.
Also, lots of pro-UKR people commenting here about the brothers vs. brothers conflict out there in Eastern Europostan – wanting RUS blood. Where were all these sentiments when the neocons tore up Iraq, Afghanistan, Lybia, etc.? Whattabout USA invades distant land, but RUS can’t police the back yard? Makes no sense to me.
Except for the fact that Ukraine is not Russias back yard ( sovereign state), and they are not policing it ( conquering it for glory, power and oil). But if you take out the two core elements of your statement, then it’s perfectly true.
It seems like smart people here, but how naive you are. It’s immediately obvious that you haven’t lived in Russia, where the reality is much worse hidden. Any taxes on the rich are simply a redistribution of money within the elite. There is no fundamental difference between the oligarchs and the “deep state”. They are one thing. Business is not your friend, the state is not your friend, they all only want power, they all hate and despise you. There are no good people at the top, there is only rot and scum. Putin, the Chinese, the Democrats, the Republicans, black rock, the KGB, the CIA, the IMF are all one type of rot – cunning bastards, primitive greedy psychopaths. Any elite is always evil, worse than even the crowd they rule.