Hacker News Reader

One big reason is liquidity. Many 100MM+ net worth individuals have their fortune tied to one corporation of which they're a founder or officer. Forcing those people to liquidate pieces of their business to pay taxes on their own fortune could very directly harm the company.

View on HN

Asking honestly, is "I don't have money because it's all tied up in illiquid assets" a valid excuse? That's a personal financial planning choice, is it not?

It's certainly not an excuse for failing to pay income tax. Also, using a wealth tax, tax liability could be much more reliably predicted years into the future.

They can pay in shares.

So, sooner or later we end up with all companies being owned by the government. That has been proven to end up badly (by Soviet Union and rest of the communist countries).

The government can sell the shares to the public. Or the taxed individuals can can sell shares to the public and pay the government with the money. My point is that the company's illiquid assets needn't be used to pay the tax; they can be used to back liquid assets that pay the tax.

Reply on news.ycombinator.com