If you think the wealth tax is already in the rearview mirror, keep your eyes on the road. The beta test is over, but that was just the nose in the tent phase.
Democrats knowledge of wealth is like the old saying about pornography, they know it when they see it (or in Hunter Biden’s case, when they film it).
But unlike porn, they don’t know where it comes from. Also unlike porn, they know wealth has to be destroyed.
Because wealth is the thing that negates what they call equity. Egalitarianism wasn’t enough. Now we need equal outcomes where each player’s deficits are boosted to make results the same.
What better way to make the rich pay their “fair share” than by seizing the wealth they obviously must have stolen? And using that to even the playing field?
It’s notable that instead of going after the two-and-twenty of the carried interest set, the Democrats sought a mark-to-market tax on equities (a tax on unrealized gains). It was explained as a way to collect capital gains taxes earlier, in order to fund their hyperspend agenda. But it was really a way to collect estate taxes early, as it was structurally designed to force the sale of assets and to destroy wealth.
The wealth tax failed this time because its mechanics were too dumb. That’s what you get when you let Sen. B.S. (obsessed with millionaires and billionaires) and noted Native American Sen. Elizabeth Warren write tax policy.
What happens when the market declines? Does the government cut everyone a check?
How is something non-fungible like a piece of real estate valued? Works of art?
What if someone only has one non-financial asset that makes them wealthy?
Do they have to sell it to pay the tax? Take out loans?
This time they couldn’t answer any of those questions. But the details don’t matter, the target does.
Real wealth endures and can maintain itself. It is the essence of capitalism, which is why they hate it. Universal, equitable toil is what the left wants for all of us. Anything that allows someone to sit at home and contemplate the universe is anathema. To the salt mines, comrades!
I jest of course, that’s gross exaggeration. Since they don’t understand biology either, they hate salt too.
The left lives in an 80s teen comedy, where hating Chad & Buffy is just so obvious it never has to be explained. But when you bring that zeitgeist into the policy-making sphere, your laws are still supposed to make (don’t laugh) at least a modicum of sense.
If wealth was just a pile of gold coins, it might make sense to let Fauxcohontas pilfer a few for the common good (you’ve got too many, give me one!). Just to shut her up.
But real wealth has to be evaluated and if the methods to do so are not clear, or even agreed upon, how can the amount of tax be?
Market capitalization is not really the amount of money in a market. It’s an abstract concept that is pretty defective as a calculation of value.
It is the marginal price of a unit of account times the total circulating supply.
That means if we have 1,000 widgetcoins in circulation, and you offer me $2 for one of mine, the current widgetcoin market capitalization is $2,000.
But if I have 700 widgetcoins do I really have $1,400 in wealth?
It depends. If the market is very liquid, and widgetcoins very desirable, maybe. But if I dump 700 out of a total supply of 1,000 on the widgetcoin market, I will likely break that market. The price of widgetcoins will probably approach $1 or lower pretty quick.
But Democrats can’t understand why a 2% tax on my $1,400 widgetcoin fortune is unworkable. For some reason, it’s an unattainable level of knowledge for them and we will have no peace until the average person understands this.
A Class Study in Envy
Ask yourself why you know how much money Bill Gates, Elon Musk or Jeff Bezos have. For years, the “richest person in the US” has been defined using “market cap” style math. This was always so unimaginable numbers could be thrown about in the service of class warfare narratives.
It’s not that these people aren’t rich, it’s that their wealth is almost all in the stock of the companies they founded.
Saying Elon Musk is worth $300B ignores a few things. Democrats think he has $300B in the bank. Whereas in reality, Musk has a lot of Tesla stock.
The fact is Musk’s Tesla shares are not liquid in the same way as 1,000 shares of TSLA is in an average person’s IRA.
As an officer and over 10% holder, there are a variety of SEC and other regulatory issues Musk faces when selling stock. In many companies, operating agreements further restrict how much founder’s stock can be sold in a period. Vesting schedules for early employees add more restrictions.
The Democrats know all this. They figure Musk can just take out loans against his shares and cut the Treasury a check. And Elon Musk or Jeff Bezos can.
But smaller founders who still qualify as “the evil rich” might not have that option. And the more serious issue is that when you sell shares, you lose their votes. And that is something company founders care deeply about, controlling the companies they started.
If you have to sell 2% of your wealth (e.g. shares) every year to pay the Bernie & Lizzie tax, how long before you lose control of your company?
What an added bonus for those who hate the productive.
Fake Voices & Fake Valuations
For a while we were asked to believe fraudster Elizabeth Holmes, of the occasionally mannish voice, was a billionaire. At the time, that was held up as something to be lauded, a great achievement of female entrepreneurship.
But Theranos was never worth $9B, except in the minds of reporters and first year MBA graduates. Serious investors don’t take early stage valuations seriously.
If you raise $10M for 5% of your company, you don’t have $200M in the company treasury. And a founder with 40% of the cap table doesn’t have $80M in the bank.
But this is the type of “wealth” the Democrats want to tax. Because they’re not just insanely jealous, they’re also insanely stupid.
But are they really?
Just Stop Believin’
There has to come a time when we stop believing that no one has thought about the unintended consequences. Their intent is to stop the creation of wealth. And any narrative that serves that goal is on the table.
With every frantic drama the Democrats create, we need to ask: why are they doing this? If they care about the poor, why do they pass policies that create more poverty? If they want to reduce the take of rent-seekers, why protect the tax structures that enrich them? If they are motivated to share the wealth, why do they only seek to destroy that which creates it?
The answer is always they just want to “get something done.” Regardless of the cost.
If you think a wealth tax won’t affect you because it’s only for the rich, don’t be surprised when they lower the bar and call it a savings tax next.
The sad truth is that we live on a farm with people who want to eat the seed corn and if we don’t wake up to it, there’s not going to be a harvest in a couple seasons.
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the pursuit of material wealth is a mental illness .
Read what Christ said about the rich.
Everyone in the Church, including the Pope, supposedly takes a vow of poverty.
The Church owns trillions of dollars in real estate all over the world.
The Vatican basement / vault contains billions in priceless art, sculptures and artifacts — many of which people outside the church havent seen in centuries.
The Church has more wealth than many governments, and has been accumulating it TAX FREE for centuries.
Is it the pursuit of wealth or power? Or does one lead to the other?
Envy is the key. Destroy the visible signs of success in the marketplace. If everything gets knocked down, nobody is above anybody else and you can’t fall off the floor, so nobody has to listen to your grievances anymore, same boat etc etc. Democrats are control freaks in a way that Republicans never really get into. They want to steer the boat while we man the oars and do the work. This is an unworkable tax proposal, but it wasn’t meant as anything else but a knife that the Administration waves in your face while they kick you in the nads. They pattern towards outrageous proposals being symbolically chopped back for effect, and assume they’ll get more asking forgiveness than permission. The super rich are already paying plenty, and can up anchor and sail away if government becomes too onerous. And they didn’t get rich by tolerating much bureaucratic boning. They can leave, and enough local baksheesh will buy a passport in dozens of countries. Ask Marc Rich.
They could assess these taxes without requiring payment until the property changes hands, accruing interest on the outstanding tax liability and accounting for that money as receivables collateralized by the underlying property, which could in turn be used to collateralize loans to the Treasury, getting access to the money while the can gets a mighty kick down the road. Good time to sneak the step-up basis in, before people figure it out and have to pay.
They don’t need the money. They just don’t like you having it. When this fails, price controls?as the author says, dumb ideas never die.
DO you really believe they are dumb, incompetent, loons, or psychos? They are neither of the above.They are Marxists and they want all of means of production, including the serfs, under their control and total domination. Now, once they do that we will have another USSR, NK, CCP, and Venezuela. Take your pick. With our current crop of wannabe bozo Marxists I would expect Venezuela or Cuba.
They’re loons. Desperate to “do something”. Desperation and power bode ill for us. Winning nothing, they’ll attempt flipping the table.
“Dumb Ideas Never Die.”
Like Austrian economics…
He’s a shitlib troll
Scotty, I’m linking the title of this nonsense article to Austrian economics.
Do you understand now?
I’m actually being kind, I could have said worse.
“Democrats knowledge of wealth is like the old saying about pornography, they know it when they see it (or in Hunter Biden’s case, when they film it).”
Remembering Associate Justice Potter Stewart’s concurring opinion in Jacobellis v. Ohio – I shall not today attempt further to define the kinds of material I understand to be embraced within that shorthand description [“hard-core pornography”], and perhaps I could never succeed in intelligibly doing so. But I know it when I see it, and the motion picture involved in this case is not that.
And to think that Congress has its own hard core porn tube, featuring the likes of money porn, war porn, education porn, energy pron… the government inspired porn list is endless.
I think that there is something being overlooked here: the original proposal would only end up pertaining to about 700 people, and they would immediately find ways to circumvent whatever ended up being passed. The bottom line is that those who are originally being targeted are not really the target; the real target is the middle class.
The collective wealth of the middle class is about 10x what the same is for the billionaires, and THAT is what this move is ultimately direct3ed to seize/take. Those at the top will continue to stay there, it is everyone else who will be losing everything.
I think that people often forget that, especially with those already in power, collectivism is something that is for others, not for themselves. Warren, for instance, has no desire to be the same as everyone else; she simply wants others to be the same, while she retains her own position over them. What they do refuse to see is that it has never worked, but as long as they are still on top, does it really matter…?
Hey thanks, Dexter, great article
I love the Bidens. The narratives the agency media created for us are so plain, truly a B-pandemic movie, much like a nazi wrote it. But now we have someone who easily tops Bush Jr in pure comedy gold, and Hunter’s footjob video was genuinely fun. The fact he’s actually racist-minded is the cherry. They hook-line-sinkered all the Bernie kids twice and they fell for it twice, at least. They wrote things like “we knew Biden was bad, we were trying to get Kamala” like they actually think they’re part of the club, lol. I never laughed so hard at political sycophants in my life. And responsible capitalism (where you take money, voting with dollar) is an oxymoron and inconvenient social reminder your parents weren’t that poor and still bought everything at walmart. Tax the walmart
“He’s a shitlib troll.”
So predictable, attack me instead of my argument.
You plebs on the extreme far-right, do not have the intellectual rigor to support your own twisted and bizarre logic.
And you wonder why mainstream media does not take you seriously.
Wealth is rather subjective. You’ll figure out that you really never owned anything after you take your last breath. The moment we make any claim to the material world we must enforce it. As a consequence, much violence is introduced into the world. We will fight and kill each other over a piece of dirt we think belongs to us or want. The more we claim, the more we have to fight to hold on to it. They say the meek shall inherit the earth. I suppose only then will there be peace here.
Its hard to say why we feel we must have control over the material world. Perhaps its the uncertainty that makes us feel so insecure. Fear seems to be a part of it too. They say fear is the opposite of love. I know from experience, the more I gathered, the more fear I had of losing it. In some cases it wasn’t so much the value of the items, but the time invested getting it, and the idea of having to start over. I do know that when I was younger and had nothing, I was so much more happier. I don’t have a lot of stress, because I didn’t feel like I had a lot to lose in terms of material goods, and I had a whole life time ahead of me.
I don’t envy the rich. I really don’t. Indeed I can point to some things the very rich do that one could account as good and bad. Like provide jobs for people. Invent things that improve our standard of living. But they don’t do it for free or out of benevolence. So one hand gives and the other takes away. Nevertheless, by virtue of the need to enforce ones claims, I do think they create a lot of unnecessary suffering in their pursuit to build their empires, which they cannot take with them in that moment of truth. We were born into this world with nothing and we will leave it the same way. Though one may control unimaginable wealth, and command many mighty men, there will always be one thing that most of them will never have. That is the ability to walk away from it all before reality violently rips it all out of their hands and enforces its claim.
“…we live on a farm with people who want to eat the seed corn…” is the most accurate analogy for our world. Dexter’s article is concise. Enjoyed reading it.
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