The point is that to justify the concentration of capital, the company should be doing well enough to tank the tax. If they can borrow money against the equity then that gives them liquidity, and they can use it to pay a wealth tax; and if they can't repay the loan (presumably because their equity didn't appreciate to a point where they could re-negotiate the loan terms) then there's your forced liquidity.
Why does that need additional justification, beyond investor confidence? And why does "justification" take the form of paying money? That's not any kind of moral justification, it's just an indulgence.
> the company should be doing well enough to tank the tax.
Saying it should be doing well enough now to tank a tax based on estimated future earnings requires that a lot of otherwise unnecessary assumptions about access to financing and revenue timelines hold.
It's all just throwing a bunch of extra stress at entrepreneurs when they're most vulnerable, instead of waiting for when their labors bear fruit. Since the state is extremely able to endure that wait, it all just comes across as malice.
This is being used as a corner case to thwart wealth taxes that in the vast majority of cases involve well valued, liquid, publicly traded securities.
https://goodjobsfirst.org/amazon-tracker/
You have to take that into account and look at the NET of what we've paid Amazon vs what they've paid us
There are a plethora of taxes that companies pay, but a tax on existence is just awful in so many ways. Make zero dollars this year? You lose a percent of the company -- congrats.
There is a middle ground: Make using the securities of the company as collateral a taxable event. If it's good enough to back a loan, it's wealth, realized.
A wealth tax on unrealized assets is going to create huge distortions in the economy, there are other ways we can fix this.
> High income with short work days, free healthcare, free daycare, free education and beyond.
If the author doesn't value these for the people around them then perhaps he should move somewhere else.
1: https://www.skatteetaten.no/en/person/taxes/tax-deduction-ca...
When your application to defer the tax is granted, payment is deferred for three years. Once the three years have passed, you'll receive an invoice stating the amount that you owe, including interest.
Forbes and other finance magazines create top lists and bio stories presented entirely as if the valuations of businesses are the same as actual money. When Amazon shares go up or down a few percent overnight it's reported in the media as if a convoy of trucks has dumped dollar bills at Bezos' mansion. "Bezos made xx millions per minute".
Spreading such misinformation everywhere for decades can't be good, and it seems Norway has fallen victim to it.
Is it just to force entrepreneurs to sell more stock and get more loans, as a gift to the financial sector?
Edit: On second thought, taxing unrealized gains results in lower tax income - the financial sector will take its cut, and that cut has to come from somewhere.
The tax bill is 10M only if they control 100% of the shares. Given that they've taken funding from at least 15 investors/VCs, this is clearly not the case.
https://tracxn.com/d/companies/dune-analytics/__XskUZos4lkfE...
The very first sentence of TFA gives it away: Recently, my story as a Norwegian entrepreneur facing an unrealized gains wealth tax bill many times higher than my net income went viral
Many who are in the position to control how their compensation is doled out (board members, C-level) will often take it exclusively (or nearly so) in stock, specifically so they never have to pay taxes on it. Famously, several have taken $1/year incomes - e.g., Mark Zuckerberg and Steve Jobs, while Elon Musk didn't even bother with the charade and took $0/year.
* Side bonus: in the US, corporations paying out performance-based compensation like stock get additional tax breaks, so it's not just the executives which win the taxation game while doing this.
Can you explain how this works? I have my wealth in stocks, I use those stocks as collateral for a loan. To pay back this loan, I have to either get money from somewhere, or hand over the collateral to the bank. Let's say "get money from somewhere" is taxed (to avoid circular reasoning), so that leaves trade loan collateral for loan cash, which is on net no different than selling the stocks.
This is not taxed? And wouldn't it be infinitely easier to close that loophole, than taxing the estimated profit for the next N years, which is what unrealized gains tax amounts to?
To their complaint: Norway is exceedingly hostile to investments that do not result in Norwegian economic investment beyond the borders of a given business. The 1% tax on virtual wealth is explicitly targeting theoretical unicorns to ensure that VC funding is taxed. Here, the first year’s effective tax would have been 10M owed out of 70M invested, at 14%. Whether that’s excessive or not for an investment is worth discussing in the context of Norway’s normal corporate tax rate, 22-25%, which they do not do. I shouldn’t have had to do this math: their post, if it’s seriously intended to influence economic policy, should have at minimum laid out these figures.
To their emotions: Were they not consulting with an accountant and a lawyer when they accepted the investment? Did they knowingly accept the investment and begin planning their exit from the country immediately? Is this a planned marketing campaign that uses taxation outrage to generate free PR for their company among taxation-hostile audiences that are more likely to pay a cryptocoin investment product?
Given the data-free post and the apparent naïveté of their founder when faced with investment and taxation in Norway, when the focus of the business on providing investment advice — either this business deserves to collapse due to its founder’s incompetence, or this post is a honeypot trap for extracting PR wealth from the cryptocoin faithful. The post presents no new arguments against Norway’s valuation tax that weren’t already hashed out at length when it was first imposed, so I decline to give them free PR by engaging with their outrage.
ps. While I largely disagree with Rand’s views, I am not unfamiliar with them. The implicit but unstated framing of their cryptocoin investor product as a peer of Reardon steel or Taggart Transcontinental here is laughable. No product is produced that stands above and apart from its peers, Rand would label their target customers as ‘moochers’, and their post is a coarse mockery of the impassioned monologues of Atlas. Their flight to Switzerland is no silent quitter abandonment of their enterprise, and they certainly would not be invited to the Gulch before the collapse.
> There are two novels that can change a bookish fourteen-year old’s life: The Lord of the Rings and Atlas Shrugged. One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes, leading to an emotionally stunted, socially crippled adulthood, unable to deal with the real world. The other, of course, involves orcs.
-- John Rogers
Everytime it's the same.
It reminds me of that study that found that people who serve in executive roles for prolonged periods of time develop a sort of brain damage where their "mirroring" neural process becomes impaired.
https://www.theatlantic.com/magazine/archive/2017/07/power-c...
the viral tweets critizing the wealth tax are by elon musk, marc andreessen, paul graham and alex svanevik (also an onchain data founder). certainly what they have in common here is that they would stand to lose some wealth from the wealth tax!
If you hire competent people and get billions in support, you'd have to be massively incompetent to not end up with an actual product.
See for yourself how much we've paid him:
https://subsidytracker.goodjobsfirst.org/parent/tesla-inc
https://subsidytracker.goodjobsfirst.org/parent/space-explor...
Not to mention the limitless violations he's faced little to no consequences for
https://violationtrackerglobal.goodjobsfirst.org/parent/spac...
https://violationtracker.goodjobsfirst.org/violation-tracker...
https://violationtracker.goodjobsfirst.org/?parent=tesla-inc...
This sounds like amazing success. Now no one has to worry about those people using their money to command Norway's significant resources to implement their stupid ideas. Money is not a resource. It's IOU from the society to the guy with money. Pushing the rich out of the country is letting someone else pay for those IOUs with their work and resources.
If you think it's a loss because those people might have great ideas because they got some in the past that made them rich, it's usually not the case. To land on the very top you need very significant amount of luck. And luck is something that you get case by case. So they have about as good ideas as next 10000 people that didn't have as much luck. But the blast radius of the stupid ideas of those on the very top is huge because of how much money they accumulated. Pushing them out of the country is a huge benefit.
I'm still finding it hard to be terribly sympathetic towards the author, and the constant Ayn Rand references don't help. If you're worth 100 million dollars on paper, is it really that hard to come up with 1 million to pay the taxman? Sell 1% of those shares, get a loan secured by those shares, etc.
https://www.reuters.com/business/norways-wealth-tax-trades-m...
I still prefer Warren's proposal in the US which only proposed a tax above a net worth of $50m. The biggest criticism of wealth taxes is the massively complicated added bureaucratic burden of measuring everyone's wealth. Only about 0.14% of USians have a net worth above $50m.
The 1935 Revenue Tax was essentially a wealth tax and it brought great levels of prosperity as well as continued entrepreneurship
The point is that politicians (and political influencers) have a habit of proposing thresholds for taxation on rich people that manage to stay above their own personal level of wealth (or income). It comes across as self-serving.
The thresholds should have some actual calculation behind them that doesn't appear motivated by the speaker's personal situation.
The cutoff is far above what she makes. For her to pay anything significant she'd have to have a net worth well above $100m.
She also justifies the $50m explicitly. That is roughly the percentile where 0.1% of people would be affected. The other cutoff (where the tax goes up to 3%) is at $1b. That is where 0.05% of people are affected.
You are not a fugitive, just because you are expected to contribute to society.
> Recently, my story as a Norwegian entrepreneur facing an unrealized gains wealth tax bill many times higher than my net income went viral, amassing over 100 million views on X.
There's contributing to society, and there's receiving demands for more wealth than you possess. If you can't make a moral distinction between the two, then, frankly, I don't know how to explain it to you - this is one of those things that you should understand by the age of ten or so.
Net income != wealth.
I tend towards your morality, but I would rather argue from a practical perspective.
My proposal is that we should levy tax on wealth when we can actually measure it. "Market capitalization" is largely illusory, but public stock markets make the per-share value real. As for private equity… well, it would be inappropriate to take some investor's implied valuation for granted, but neither should we allow multi-millionaires to hide all their wealth in a do-nothing corporation registered for a few hundred dollars and then claim to have no liquidity.
All this stuff about "resetting cost basis" encourages playing games, and those with the most resources will be best at dodging the taxes (the more complex the rules, the more so). My perspective on this is perhaps informed by living in Canada, where capital gains are grossed down rather than having the American distinction between "short-term" and "long-term" capital gains and complex rules about "wash sales" etc.
Not sure it’s good riddance that they’re turning away their own citizens over such a small, likely unnecessary(?), tax.
The Ayn Rand philosophy holds that the people at the top are working hundreds or thousands of times harder than the rest of us.
The modern socialist view is completely contradictory, where most of the people at the top are supposed to be doing even less than a construction worker, but they're rich because of the return on capital or the right to extract some sort of rent.
Everyone knows people at the top get paid more, even in socialist/communist societies this is the case. Now whether this is because of birth privilege, good social connections, politicking, actual hard work. It's pretty well a constant that's held across time & differently structured societies. I guess what I'm trying to say here: there's always people jockeying for position. Pretending we're in some sort of utopia won't give the average person a good experience.
Second. While the hard work is most definitely over exaggerated, it's not uncommon that hard working people usually end up better off then not hard working people. There's also the saying/belief that people make their own luck. And I am firmly in the camp that luck, whether it's made on their own accord or blindly stumbled into, is a probably the biggest unspoken factor because it takes away from narratives of self-made etc.
Perhaps the difference between a good CEO and a bad CEO is 100-1000000x the average worker's productivity, or even more. I suspect the real disagreement is: does that justify paying a CEO 10-100000x more than the average worker, even if they only work 1.5x as hard? From the perspective of a company it may be worthwhile, but I can see how some people might feel that's a little unfair.
That's it. It's incumbent upon asset-holders to remain under the limit. It's up to them how close to the line they wish to tread.
No one becomes a billionaire ethically...no one produces that level of value, and absolutely no one needs that much money. And we have evidence that it literally breaks your brain when you attain that level of wealth. It's only possible to attain through exploitation. If you are found to hold a billion dollars in assets, you go to prison and forfeit all of your assets, so it's up to them to manage their assets accordingly. Give it away, pay your workers more, distribute it however you want, but a single person cannot be allowed to control that much capital - full-stop.
If you flee the country, any assets you leave behind are forfeit and seized. You will not be allowed to retain the wealth you accumulated on the on the backs of taxpayers and labourers...it will be forcefully redistributed for the public good.
For any country that does this, extreme wealth disparity will be eliminated. If there are countries that allow billionaires exploit the working class and public infrastructure, then they can go build their fortunes there. Equitable, civilised countries will outlaw it. Billionaires only exist because we allow them to.
Someone with less than a billion will be just fine, and can enjoy a reasonable, moderate amount of wealth in peace.
…Perhaps by realizing a portion of the gains and handing over the resulting wealth?
That means the state forces you to sell your company if people start to believe in it. Why can't they instead tax you once you do realize the gains of your own free will?
You start a co and have a million shares. Some guy buys a share for a thousand bucks, which means you get classified as a billionaire.
Then the state says "Hey pay us ten million of that billion".
When you start to sell your shares, you discover that the first guy was insane and nobody wants your shares. That 1000 bucks is all you have.
And the state goes "Better borrow for that ten million you owe us"
Of course the normal situation is that a company makes money and shares don't collapse in value - but what I describe can 100% happen exactly like that.
It's a kafkaesque dystopian nightmare that should not be possible in a democracy IMO.
If any government wants a cut of people’s equity they should be bankrolling it in the first place.
For those who don’t know, just because you have a valuable asset, e.g. stock in a private company, that does not necessarily mean you can sell it for cash. I’ve experienced this the hard way throughout my career