Those unrealized gains are good enough to borrow from, so they are good enough to tax.
The collateral necessary for a loan is far greater than the loan amount due to the volatility of the asset value.
The loan requires interest, taxes are pain on that income. The spending of the loan amount is taxed via sales taxes.
The counterpoint is that the valuation seems to be a fiction when it could represent a liability, and a real thing when they want to, say, take out a loan against it. It's awfully convenient that it is selectively fictional.
It's not, it is inherently fictional to all. When you want a loan you will have to put up significantly more than the loan amount as collateral.
Note that for more humble "wealth", folks are taxed. If you own the house you live in, even if you are not using it as a financial instrument but just a place to live, you get taxed on the unrealized "value" of the house. I don't get to say the market value of my house is a fiction since I'm not selling it.
(1) That tax appraisal value is often significantly less than the retail appraisal, and tax appraisal often stand for many years without adjustment. However if retail value decreases a homeowners can generally request a reappraisal.
(2) Both the more modest and the wealthy are subject to this.
if you live in your house, your property tax is subject to the standard deduction, which means folks generally don't get a deduction for it.
"Don't take" not "don't get", the homeowner gets to choose to use the standard or the itemized, whichever is the larger deduction.
If you own a house that you rent out to someone else, the property tax you pay is not subject to the deductible, and you can deduct it.
No, it is a business expense that gets deducted from business income. Renting is a business activity.
The tax system rewards landlords more than homeowners.
The preceding calls into question the logic of your determination.
It seems that either you assess a property tax on net worth analogous to what is imposed on common folk
We do. Homes are taxed. Stock valuations are not. Wealthy or common.
or at *least* tax loans against such assets that have nothing to do with paying for that asset.
The interest on those loads is taxed. The spending of the loan amout is taxed via sales tax.
Did you actually understand that the practice I mentioned, of colocating R&D engineers onsite during development, was an innovation practice that Chinese OEMs do and that GM does not do, and has never done?
Do you realize that colocating is something GM and many other did with their domestic supply chain, suppliers that could be trusted to respect intellectual property.
And that GM's moving R&D to a joint facility in China is precisely what you describe. The Chinese mostly state owned entity was one of their Chinese suppliers and manufacturers.
Because it sure reads like you didn’t understand this and thought it was some point about innovation at GM being stifled by being outsourced.
No, outsourcing worked while they strictly withheld sharing core IP, have your engineers on site to assist and train does not require handing over key IP.
And you made a broad claim, not a narrow claim, about Chinese OEM innovation
Nope. I made a claim about sharing next generation R&D.
The options they may have for evading wealth tax would depend on how the statutes get written, and what loopholes they can buy.
And they and their lawyers will always be smarter than the politicians drafting the laws. And the politicians are limited by limited jurisdiction, they wealthy will be mobile.
Read up on Seattle tanking due to taxation and law enforcement policies, while Bellevue 12 miles away, but a different jurisdiction, excels and grows.
Does GM co-locate engineers from dozens of suppliers on its sites in the programme teams throughout the development phase? No, no it does not.
Under past CEOs GM kept key critical R&D in-house. But then with the current CEO, R&D moved to a joint venture with a majority state-owned enterprise in China.
This is but one of hundreds of innovation practices
It's just the one example the GP mentioned. Just one part of the GM R&D that was shared with China.
In the near future we will probably see a headline that is something like "Elon loses $200 billion". Elon will in fact suffer no such loss. There is no loss or gain until a stock is sold. A valuation based on today's closing price is a fiction.
By that logic, if CA took $200 billion worth of shares from Elon, he wouldn't actually suffer a loss?
Wrong, that would be a loss. That is not a market fluctuation that is recoverable with time, that is a permanent loss of an asset.
Their assets are valued at whatever they need to be valued for them to get the loans they want.
They need only a small fraction of today's fictitious net worth value to collateralize such loans. They will engineer their fictitious net wealth as needed.
And those loans are below market rates so that they never pay much of any interest on them.
Add evadable taxation on top of that and you just accelerate the usage of mobility and creative tax avoidance.
They don't do that for billionaires or other members of the ruling class.
I'm glad you understand they have options others don't. What makes you think they will not have options for wealth tax? Again, mobility, creative accounting, creative asset management, etc.
Yeah, those are the doctors and lawyers and actors and all the people that WORK for a living. None of them are billionaires.
The top 1% starts at about $800K per year.
See, you're conflating the top 1% of income earners--the key word there is INCOME earners, not dirtbag CEOs that pay themselves $1 salary a year and take the rest in stock--with the ultra wealthy.
People who can do that are already wealthy. And do you think none of them actually built or earned something? The $1 salary guy I can think of is Steve Jobs 2.0 at Apple. 2.0 could only afford that because Wozniak and Jobs 1.0 create Apple Computer in their garage. I forgot which one, but a current Wall Street CEO came from a blue collar working class family, went to State University, got an entry level job at some financial company and climbed the ladder and eventually became CEO. I'm, not saying there aren't quite a few nepo-baby CEOs that rose to the top through the family and elite university networks amplifying their marginal skills. But if you want to break things down don't stop at the cherry picked point of convenience. You are offering spin when you do so, not real data. if you start taxing the people that are hoarding the wealth. $10 million in assets?
"Hoarding", An unsubstantiated political guess, Is that wealth income from previous years after taxes? So you are proposing multiple taxation on that income. Is that wealth unrealized capital games on the land and house? Is that "land" the family owned farm, the family owned factory? Do you know how destructive it can be for a family to lose control of a business? We have numerous cases where domestically made products with excellent quality and reasonable prices became owned by some company specializing in owning established "brand names" and sticking that 'name" with a legacy reputation see that name stuck on low qualify foreign made crap sold at an inflated price because of the "name" that falsely suggests quality. Is that unrealized gains from stock in a company they started? Both of which are a bit non-liquid. Note such founders may be limited in terms of how much stock they can sell, if they sell too much they may lose control of the company they created.
Wealth, and whether it is a good or bad thing is a far more complicated topic than you fashionable political understanding.
\They'll make that back so quickly they wouldn't even notice it.
The socialist mayor of Seattle is learning otherwise, as companies and workers flee Seattle for nearby Bellevue.
In CA numerous billionaires left before the cutoff for a wealth tax. Many are restructuring their portfolios so the net work calculation falls below $1 billion.
The working class always ends up paying the bills. They don't have the mobility. They have the numbers where increasing their taxes will generate meaningful income, unlike a wealth tax on billionaires.
The real solution is to control spending, which for California is f'n out of control on stupid stuff.
They pay 40% of the income taxes but they have 80% of the wealth!
This year's wealth is largely previous year's income after taxes. You are saying income should be taxed multiple times.
In my experience, everybody who isn't a politician and lives in this state has a much lower opinion of its politics than progressive idealists outside of California do. That includes actual card-carrying members of the Democratic Party residing in this state.
Case in point: rsilvergun loves the fuck out of California's politics, and he's never even set foot here.
Ignorance is bliss.
That must be that risk that they keep explaining they take on board
That is investing in a company, not unrealized gain in general. When you start or invest in a company you are at risk due to flaws in the business plan, flaws in execution, changes in government policy, unanticipated/unpredictable events, etc.
i say the guy is only talking points and he responds with more talking points.
When two California's are discussing something local they don't need to document the obvious that they both already know.
Saying the California state gov't wastes a lot of money is like saying California coastal waters are cold. They are local knowns.
Taxing unrealized gains is problematic. We've reached the point where not taxing unrealized gains is also problematic.
There is another, and more important, area that is problematic. Spending. Unrealized games is just the politician's diversion from over spending.
To create those images I think they dig holes and pop dynamite. I don't think sitting in a bath tub with a bunch of low power emitters is going to cut it.
I was thinking more about receiving acoustic waves and interpreting them to create a 3D image, than generating them.
Nothing succeeds like excess. -- Oscar Wilde
