Something I haven’t quite wrapped my head around. Many reasonable critiques here say “wealth appreciates about 6% per year, so nobody will lose money with a 1% tax. You gain 5% per year”

But Graham’s post talks bout stock. See this:

> And at 5% this threshold is getting asymptotically close to being an upper bound on how much of the company you get to keep.

We actually have a real life example of such a founder. Warren Buffett owns about 18% of of Berkshire Hatheway. He took control of Bwrkahire Hatheway 58 years ago. So had there been a 1% wealth tax, Buffett would only have about 9% of Berkshire.

You get a larger effect the larger the tax. The result is gradual loss of control of the company shares.

People have been focussing on the performance of a mixed stock portfolio. But from the perspective of a startup founder who wants to maintain active control over a company for a long period, Graham seems to have raised a central point. Other than massive debt, there would be no way to keep the same stock share if a wealth tax took part of it year on year.

Or am I missing something?