Comment Re:Found this quote just the other day (Score 1) 287
While rich folks may have a significant amount of a particular company's stock if they founded the company, the reality is they have stocks in many, many companies. So yes, if forced to liquidate it's going to affect many companies valuations and 401k's and IRA's valuations along with pension funds for those who still have them for everyone else.
And inheritance taxes do take a bite of large estates, both at the federal and in many cases at the state level. For some states it is both the payer and the recipient who is affected.
Will the prices eventually recover. Yes. Has the stock market dropped in the past and then recovered. Yes. But drops have also triggered the great depression of the 30's. So don't be quick to dismiss the effects.
You can say that people shouldn't be allowed to have so much stock there would be a problem like that. Well if you have a private company you founded, you start with a huge amount of the stock when you do an IPO. Forcing a business creator to divest control by stock sales until their ownership of the company doesn't threaten its existence when dying would dry up company formation and starve companies of the ability to generate cash to grow early on.