I'd be happy if I could give a percentage of the shares themselves to the government as a tax payment (paying tax on the shares specifically), so I don't have to worry about the risk that they're overvalued by the tax agency.
Taxing non-income wealth increases by any means incentivizes the government to manipulate the prices of those assets -- and more than any other entity, the government possesses the power to do so through regulation and legislation.
It also makes the government the eventual largest capital owner, which could create all sorts of unintended consequences. It could sit on those assets indefinitely (like it does its liabilities) instead of selling and using the money to fund itself. There's a special kind of poverty that exists when the government owns almost everything.
Also, there's a big difference between legal worth at a given time and fungible value at that time. The difference (or lack thereof) between the two could itself create all sorts of opportunities for gaming the system when fungible value becomes a basis for being taxed.
So: Exemptions specifically covering residency already exist in finance law. If you go bankrupt, you can still live in your house (only if you owned it, mind).
The government, as soon as practical, can auction the stock it receives. Thus identifying its value and releasing the funds.
I'm not advocating anything in particular. I'm only pointing out some potentially serious issues with the proposed system.
Sure, primary residence could be excluded. But that doesn't change anything about what I said, except perhaps blunt the initial impact on the middle class.
> The government, as soon as practical, can auction the stock it receives. Thus identifying its value and releasing the funds.
Perhaps that could be part of the tax law. I doubt it would stay that way... once the government can own stocks and portions of real estate, I'm sure it will seek to incrementally increase its benefit from doing so. I shudder to imagine politician-beaurocrats as the most powerful hedge fund managers of tomorrow.
There's nothing stopping the government from owning these things already (governments own plenty of real estate, in particular), so this seems like undue cynicism.
In fact there's almost no comparison to be made between the two.
https://www.forbes.com/sites/bisnow/2017/04/11/solving-the-m...
This is now really a bad faith argument.
You've moved the goalposts (again), and declared that your new goal wasn't met (when, in fact, you just ignored that part).
It's OK to admit you were wrong <3
If the government purchases real estate with its own money and later sells it--fine by me. They have business to take care of and need places to do it.
What bothers me specifically would be a growing federal or state government stake in assets owned by others by virtue of a tax law that grants them such ownership.
I imagine whole swaths of businesses, apartments, and other buildings in cities across the US that are >50% owned by the government 40 years from now.
It would push us a lot closer to a world where people don't own anything anymore besides their own houses (maybe not even that) and the government owns everything.
I'm really struggling to understand this point of view, given the article that you couldn't be bothered to read says the US government owns 15% of all real estate already.
In my country, the reason that a lot of people own their houses is because the government sold its housing stock to residents in the 1980s and 1990s. That created a majority of homeowners, for the first time.
The fact that the government didn't replace this housing stock has been the cause of a massive generational rift, with a reduction in owner-occupancy from that peak, down to the point that a plurality of people (the vast majority of people under 45 - almost all young families) are now private renters in insecure housing situations.
While that same housing stock - originally built by the people, for the people - is increasingly dominated by exploitative for-profit landlords.
Unless you mean a series of leins incurred once a year based on price increases. But then an asset with high YoY volatility but no long-term gain would cause the lein sum to approach the value of the asset over many years, despite no material increase in price at exit. That makes no sense - the government profiting off of volatility alone.
If that's not what you mean, how is what you mean different from standard capital gains tax?
Either pay %x in cash value or give %x percent of the item to the government.
Of course likely the government would just want to liquidate immediately but you could perhaps set it up as a "lien" on the stock/bond/property that gets satisfied at final sale.
It’s supposed to work out in the end as you have a higher basis at that point but you still have a liquidity issue.
Do they also get to leverage these shares to have a vote as to the business decisions, like any other share holder does? (assuming they have enough shares in this hypothetical share tax)
No doubt they would be loads of ways to scam this though, setting up supposedly valuable companies to 'pay' a big tax bill, then rinse the company or allow it to fail while diverting profit elsewhere.
It would be an interesting idea to explore and could potentially be a massive boon to risky startups by allowing them to hand out equity more freely as incentives without worrying about the accompanying tax burden.
For simple income tax, where you're paid in dollars and hand the government a percentage, that's fine.
But what if you're paying a tax on, say, some equity you were given in a startup?
This can cause huge trouble for people who have illiquid assets, like equity in a private company. You have to pay tax in dollars based on a guess of the value of that equity, even though you can't trade the equity for dollars (it's not liquid). When you eventually can sell the asset, like at an IPO, its assessed value could have decreased and it might be worth even less than the taxes you already had to pay on it.
That's the kind of gift you don't want to receive.
I'm suggesting that, for those who are worried about that risk, the government allow you the option of handing over a percentage of the asset instead. If it ends up being worthless paper, then the government gets nothing, but on the other hand that's also the correct amount for them to get because the tax on $0 should also be $0.
Most likely, the government would choose to (or perhaps by legislation could be compelled to) sell the asset at an IPO, but that's a detail. Perhaps they could also have an agency for managing and directing such assets in the public interest.
I cannot think of a more complicated mess as the government being part-owner of half the small businesses in America.