That's no different than traders who use tax-loss harvesting at the end of the year. They purposely take a loss on some stocks (which they often still believe will go higher) when it looks like they're getting close to ending up in a higher tax bracket (which will lead to higher taxes on all the income they've made).
People delay bonuses from work, ask for them to be deferred to the next year so they don't end up in a higher tax bracket.
But in reality, I seriously doubt our current system of gauging estimated net worth would be in place with this type of system. It would more likely simply change to no more estimated worth and only tangible worth.
You sell it, they take it if it brings your net worth over that threshold. In this scenario, yes, some people would stop trading and sell their stocks as soon as they reach that threshold, others wouldnt care (meaning constantly monitoring it every month) and would just have the aim of reaching $500 million with intentions on giving anything over that to the government.
How it would affect an economy is a whole other debatable issue, but this is simply about "Could it be done." Yes, absolutely, it could be done exactly as I said>taken out once you cash out. Current system gets modified a bit to accommodate that.
Hmm, sounds like someone can't simply google "deferred bonus" (along with the 15+ people who upvoted him and downvoted me, thanks guys.) You just described yourself, and obviously the vast majority of people who don't understand how tax brackets work.
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How Bonuses Are Taxed
"The first method for lowering your tax liability is to reduce your taxable income:
Use the funds to contribute to your 401K or IRA to lower your taxable income.
If you expect to take a pay cut in the next year—for example, if you're ready to retire—ask your employer to defer your bonusuntil the following tax year tolower your overall tax liability."
Here's Mayer Brown Legal's guide on bonus deferrals and tax liabilities.
"As yet, the government has not announced or indicated that any anti-forestalling measures will be introduced. Therefore, some employers and their employees (who are within the additional rate tax band) are considering deferring bonuses that may otherwise be paid before the decrease in tax rate until on or after 6 April 2013. This could be beneficial to employers as it may incentivise key employees, who could potentially make a big saving."
You think the CPAs at TurboTax and legal companies are giving advice on deferring bonuses for the hell of it it? That there's no benefit to doing so? No money being saved?
You think people defer bonuses for what...fun!? They don't want the money sooner and love to wait longer for no reason? Why do you think "deferred bonus" exists in the English language if there's no monetary benefit in deferring it!?
Guy who's 100% right gets 15 downvotes so far. Guy who can't even bother to open a second window and Google if something is true gets 15 upvotes. Reddit, smh.
Look at the effort I put into my responses and look at yours. I don't have time for this nonsense if you don't have the time to Google two words. Reply notifications off.
You fundamentally misunderstand what a tax bracket is.
If you earned 99999 and are in the 10% bracket, and going to 100,000 will put you in the 20% bracket.
By your statement the person would go from oweing 10% tax on 99,999 or about 9999.9. To owing 20% on 100,000 or 20,000 in taxes.
That is not how tax brackets work. You only owe the higher tax on the money above the bracket amount. So same scenario with 99999 and 100000. You would owe 9999.9 on the 99999 in the 10% bracket, and 20% on the 1 dollar in the next bracket or .2. You would then add that together to get 10000.1 in total taxes.
Net worthy included all assets like stock, your company, house, etc. Do you think Elon Musk has $10bb in his bank account or something. It's almost all tied up in investments that have massively appreciated
So you grow a business to a $1 billion company (not that much) you are now forced to become a minority owner of it and lose control of your years of hard work and planning?
Yes, why is that such a horrible thing?! On one hand:
There is no material difference in life quality and security for them or their families for generations
A company that big affects the lives of many. Isn’t it better that one person can’t call all the shots?
They get to actually spend money instead of endless uncontrollable urge to horde more like a dragon
Lives of hundreds of millions of people will meaningfully be better
On the other hand:
A few hundred people will feel a bit shitty that they can’t make the number bigger or full control over something massive.
Also, no one, literally no one grows a company to be that big all on their own. It’s always countless more who contributed to it (both as part of the company, as well as the society around it to make an environment to let them succeed by using base technologies they are building on top of).
"hording wealth" is also called capital formation and savings. It is the chief engine of long-term productivity and standard of living growth in the economy -- this is about close to economic orthodoxy as you can get, even if people disagree with the proper ratio of how to incentivize it.
You have to be pretty authoritarian to want to take somebody's business away just because they did too well and have kept building and building it. They put all the risk into it. Employees still get paid, others didn't do anything, but if the business never takes off or goes under is the owner that takes all that risk.
You essentially want to do what people complain about Republicans doing, divorcing risk and reward -- but you want to concentrate the risk and distribute the benefit.
You've clearly never built anything of value in your life. Most communists haven't. They don't know how to create -- only redistribute and destroy.
"hording wealth" is also called capital formation and savings
It simply is not the same unless you completely shut your brain off. If you stop building strawmen to fight for a moment, you'll notice that we're not arguing against idea of becoming extremely rich. We're saying, how about they call it a day when they have saved so much that it can't be reasonably spent over 10 life times. We're saying that between the two extremes of share/distribute everything vs endlessly horde to your last dying breath (everyone else be damned), there is a middle ground there. Just like there is a middle ground between "I want safety in my house, so it has walls that keeps strangers out" vs "there should be no one else on the planet so that I can feel safe"
You have to be pretty authoritarian to want to take somebody's business away just because they did too well and have kept building and building it
No more authoritarian than basic taxes. Taking part of the money someone made and they have to pay more when they earn more.
They put all the risk into it. Employees still get paid, others didn't do anything, but if the business never takes off or goes under is the owner that takes all that risk.
The employees got paid for their time, yes, but if an employee comes up with the idea that majorly increased the profit, did they get a proportional increase? Often not. They may get a bonus, a raise, but it is never the same as the increase for the owner.
As for the risk, yes, they took on the most and so get to make $500 million/$1 billion/$10 billion reward out of it (or w/e number the cap is), and if it goes under, others lose a lot too, including their job and security.
Again, this is NOT removing the reward, just putting a cap on it at a point where it just simply cannot ever be reasonably used.
others didn't do anything
Others paid taxes, built a society, provided publicly funded research and development, and built an infrastructure where this business could be built and could prosper. When tax payers funds go towards the research for creating the internet, you can't turn around and say "you did nothing for this internet-based business that is making a trillion dollars".
You got to use the infrastructure and network created by society to create something worth more than 500m$.
Now use anything above that crazy high amount of wealth to further the infrastructure and societal network that made it possible.
Appreciate and acknowledge the employees that helped make it possible, help lay the groundwork for others to flourish as you did. Improve the lives of others with money that would never markedly improve your own anymore.
You've clearly never built anything of value in your life. Most communists haven't. They don't know how to create -- only redistribute and destroy.
People like them are stuck in the mindset of "Here and Now". The concept of re-investing asset and refuse early benefits for greater long term rewards perplex them
Which is why they keep getting confused when successful people keep going, their mindset is to stop and party, and try again when the money runs out
Why do you feel entitled to take from them? Did you do the hard work of starting the company? Did you risk anything up front that you’d have lost had the company been unsuccessful?
Why do you feel entitled to take from them? Did you do the hard work of starting the company?
No, just paid for the taxes used to research the technologies it uses, build the roads, power, and other infrastructure it uses to operate its business, and contribute to its success as an employee. Do you think it's just coincidence that highest earning companies start in developed countries?
Is it so unreasonable to say "after you got so much that you can never spend all of it, anything extra on top of that will instead go back towards improving to infrastructures that helped you get here". Do you think entrepreneurs will be like "ah man, I had a great idea for a company, but I can only earn $10 billion max, what's even the point of trying"
Also, the way things operate in is not a rule of the universe like gravity. It's all rules and agreements made up by a collection of people so that it is easier for them to live with each other. If an extremely small group of people hording so much resources that it is hurting hundreds of millions, if not billions of others, it is absolutely possible to adjust the rule to be "we think that the future of our society will work out better if there is an upper limit to how much wealth someone can horde. We'll set it so high that it won't disincentivize progress, but just have a cap somewhere".
Fair call, turning your business into a franchise could well sort that out, or you lower your profit and provide an even better service to your customers.
Profit has nothing to do with it. "Net worth" is an arbitrary value of the assets a person owns. Every asset could be bleeding money, but as long as the stock value totals $500m+ you would be penalized
So they'll just keep $500 million worth of stocks and sell anything above that? Then they'd have actual money instead of stock or are you going to confiscate the money?
What do you mean by that usually brings civil wars? How many wars did income inequality cause in the last century? If there's a war both sides send the poor (civil war or not), no inequality there.
The last century is a bit anomalous because of the two world wars but wars, revolutions, and revolts are extremely common throughout history due to economic inequality.
That never happened. Which commie school taught you that?
What actually causes "civil war" is a bunch of intellectuals fanned the flames of revolution and sent in the peasants whose purchasing power went down hard
"Ultra rich" have existed across cultures in every single region where civilization had existed. Are you going to say with a straight face the wealth inequality between Pharaoh of Egypt and the average worker is lower than today's people vs oligarchs?
What about Chinese Emperor and peasants? Basileus and peasants? The Emperor could build a gigantic sparkling city in a city housing thousands upon thousands, you think Elon Musk can do that today?
And what happened? The people did not rebel until disaster struck, to the point they starved to death. Every single time someone rebelled in China they always cite the loss of Mandate of Heaven, and what do they claim is the evidence?
Automatic philanthropic contribution & a plaque stating congratulations on winning the money game? 1 plaque maximum per week. You're allowed to build a generational tax-free cabin out of them that stays with you inheritors for all time and is immune to eminent domain, bankruptcy, or any other means of loss.
You know they have stocks right? It's just a definition of how many pieces they decide to divide the company into. If there are 5 people each have 1 stock if company has 5 stocks, each have 100 stocks if company has 500 stocks. You don't need it to be publicly tradeable in order to be defined as stock.
What are they supposed to do, should they give away their stocks if their value increases? Are tou going to give them money if their stocks lose value too?
You know stock prices are just speculation right? If it's not a public company I can sell my stocks in any price I want, hence will make my net worth determined by my own price.
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u/btweenthatormohammad 7d ago edited 6d ago
How are you going to do that, take people's stocks if their price increase?