Assuming billionaires were going to get a special tax, how would you actually determine how much to tax them? Sure some would be straightforward like Musk where it’s entirely derived from a few companies with known ownership stakes, but what about all the others?
We don’t even know the names of most of the billionaires. With all the games they can play to hide money, now made even easier thanks to the changes Trump made in his first few months, how would you even figure out who and what amount to tax? They don’t have a normal salary or easily documented income like everyone else.
Two prongs. One, tax loans against stock options and publicly traded shares. Two tax foreign investment dividends that constitute more than 10% of the total value of a publicly traded company. Step one makes them live off of dividends and realized assets. They can’t live off other loans of other people’s money and just keep hording assets, two pins them down and keeps them from trying to take their money and run to a tax haven.
They will eventually find a way around those, and you will have to adjust the tax code to accomodate, but that’s going to be true regardless. It’s a bit like digital hygene and cyber security. An endless arms race between states trying to build more effective risk management tools and people trying to exploit and the system and thus the people living within the system.
this sounds promising, but how do you tax one thing against another?
That’s going to take a lot of math and market analysis to work out the specifics of. I’m just one rando on the internet. This was more of a high level framework to start from. With a team of wonks and a bit of time you could pin down precise numbers.
ah, but I was just wondering what it means
So, most billionaires just sit on unrealized assets and take out loans against them that are untaxable. This way they avoid capital gains taxes from spending down their assets, as long as they never sell them, they never have to pay taxes and can sit on them until they die. Then it’s their kid’s problem. If you put a tax on those loans that exceeds capital gains tax, now they’re losing money by living off loans, and they’re actually better off selling some shares and stock options to pay for their Bugatti and super yacht.
The foreign investment profits tax means if they skip town and try collecting income from the companies they own from a beach in the Cayman islands, (or a brothel in Thailand) they are still paying tax on it before that money leaves the local market. That’s going to cool off the market for foreign investment but it’s also going to mean that even if they skip town, they can’t dodge the taxes on income from domestic businesses.
I’d refine that slightly - tax loans on anything except those for a primary residence, and loans used to create businesses that employ less than 100 people, or any business in service of the loan recipient. I’m sure that could be refined quite a bit. The intent being that they can buy a primary residence like anyone else and not be taxed on it - restrictions would apply like they’d actually have to live there, not sell it for “x” years and not build another primary residence for “x” years or then be taxed on it. The businesses would have to be big enough to be useful, not a business of rich guy’s 2 buddies that would just use the “fake” business to throw venture capital back in the rich guy’s business, or the rich guy buy a yacht and the “business” be him paying his own crew through a shell company to drive him around in his own yacht.
The specifics are going to need refinement, yes. The broad principles should hold though. One tax that forces them to spend down accumulated wealth, one to punish trying to offshore profits to tax havens.