> What if I want to keep that diamond but cannot afford to because of the taxes?
Then you have to sell it. This is no different from game show awards, where the “car” you ein is taxed at the car’s value, so unless you have enough savings, you have to sell the car to pay the taxes.
I don’t really see any problem with this though? Absolutely we should force Bezos to sell some of his stock to pay taxes: employees already have to do this when they’re given stock grants, why should it be any different for owners?
We have a system based around the notion that when a worker is given money or other value in exchange for work, part of their value increase needs to be transferred to the state. That is the same even if you get a car in compensation instead if a paycheck.
Why should the system be such that if you gain value without exchange of work, then suddenly you should not transfer anything to the state?
Yes that means that you might need to liquidate part of the asset to cover taxes on its value, just like paying a workers sallee by giving them a car might mean they need to sell it to cover taxes.
But it’s extremely odd to argue that there is some inherent “unfairness” in Musk or Buffet having to transfer part of their value increases to the state when we all agree every worker should do this.
Why do we tax property more (outside California) when it increases in value? Didn’t the owner of it rightfully make a smart claim and stake out a great piece of land? Why should they be penalized by paying more when the land becomes worth more?
In short: there’s no amount of personal “hard work” that made Bezos’ company worth what it is: the vast majority of the gains are due to his employees’ work and having staked a claim on the right plots of business ventures. Absolutely Bezos should be rewarded for making those smart decisions, but why should he take the vast majority of the gains, when he was not responsible for the vast majority of the value added?
Allowing a few individuals to amass a fortune larger than the non-US NATO budget, while we’re at the same time facing human-extinction level threats, feels a little absurd on its face. Moving the needle towards any one individual only having more power than a few thousand average people, rather than a few million, seems fine?
I mean, it's possible he paid tax on stock he got when he started Amazon. It just wasn't that much back then.
Also, forcing people to selling stock seems like something that can be abused - imagine stock spike like we had with GME this year, during change of address year followed by significant drop. You would probably have to pay more tax than stock is actually valued at.
Note this happens all the time to people who vest stock, and then before the next trading window the stock tanks in value. The employee owes income tax on the stock they vested, at the time the stock was granted, then have capital losses for the drop in share price. Losing 90% of the value of say $1,000 of stock, you could still owe something like $300 in taxes on what is now worth $100. This is the normal world for employees.
I’m not totally sure why we would want billionaires to shoulder less downside risk than their wage earning employees?
Then you have to sell it. This is no different from game show awards, where the “car” you ein is taxed at the car’s value, so unless you have enough savings, you have to sell the car to pay the taxes.
I don’t really see any problem with this though? Absolutely we should force Bezos to sell some of his stock to pay taxes: employees already have to do this when they’re given stock grants, why should it be any different for owners?