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comment by b_b
b_b  ·  895 days ago  ·  link  ·    ·  parent  ·  post: The billionaires are angry

    ...it will grow to affect more people with time.

You sound just like Elon!

Here are the top two headlines from the New York Times, as of right now, 11/10/2021, 10:51 am:

    Inflation Surges, Dashing Washington’s Hopes That Price Gains Would Slow

    Rivian’s I.P.O. price valued the electric-vehicle maker at $70 billion, a market worth that approaches that of Ford.

(For the uninitiated, Rivian has built and sold exactly 0 cars to date, though they have contracts with Amazon for delivery vehicles.) Do we maybe think those two things are connected? Stopping the market pumping has never been more important. Tesla is now worth as much as literally every other car maker combined, and that's a symptom of a disease, not a sign that Tesla will one day out earn all of its competitors.

I have no idea if taxing unrealized gains is the optimal way to go, but it would at least stop, to a certain extent, every CEO's mad drive to pump his share price as high as it can go. Somehow we need a return of stock prices being tied to business fundamentals, and while I agree that the government is hugely to blame in the problem, we should also disincentivize the mad drive one the owners' side to always grow the price. I don't think taxing loans solves that problem. And I also think that taxing loans is highly problematic, because most loans are liabilities, and therefore are actually tax write-offs. This is a good thing for investment purposes, so you'd have a hard time disambiguating between personal income and business investment--at least it would probably create as many troubles as trying to tax the unrealized gains.





mk  ·  893 days ago  ·  link  ·  

We don't need to create a property tax for equities to pop the bubble. Old fashion raising rates will do it.

Taxing stocks is also problematic. Do you tax at the high water mark, or the average price over the whole year? How does an owner know when to sell? One could easily have an obligation that wiped out a very large part of their portfolio if they sold too late if there was a large draw down. Could a CEO lose shareholder control of the company because of a crash after a Game Stock like spike? i.e. "You had $1B of stock in June so you owe $230M, sorry that the stock in now worth $200M in August. You should have sold."

kleinbl00  ·  893 days ago  ·  link  ·  

It's definitely a "please god do something" play, and it would not have the effect anybody wants. I don't think it matters, though, as it's a gambit to provide cover for something else (like raising rates).

The Biden administration wants to raise rates but they need cover to do it, because it's gonna fuck up a lot of shit. Volcker's name was mud for what, 20 years? In the meantime, inflation allows them to do a lot of stuff they want - housing reform, wage reform, etc.

When the House Democrats wanted a COVID package it was a hurredly-assembled liberal wet dream that the Republicans had to sign because they were over the barrel. They had that shit ready from years and years and years of policy papers and were able to copy-paste together a stone fuckton of socialist largesse. This thing? It's clumsy, it's ugly, it's basebait. I support what they're trying to do but I also agree with your objections.

It's a gambit. What will be interesting is what they come up with when this fails as designed.

kleinbl00  ·  895 days ago  ·  link  ·  

    Tesla is now worth as much as literally every other car maker combined, and that's a symptom of a disease, not a sign that Tesla will one day out earn all of its competitors.

Important side-note: Tesla was worth more than literally every other car maker combined until two days ago, when the mere idea of Elon Musk having to divest 10% of his holdings caused Tesla's market cap to drop two hundred billion dollars. This chart is from October. As of this writing, TSLA's market cap is $1.06T, down from a peak of $1.23T last Thursday.

b_b  ·  895 days ago  ·  link  ·  

And if we click our heels together three times, and repeat "There's no place like Mars" maybe Elon will take us with him off planet when Tesla is worth 60 kajillion dollars after they reach a million unit sales per year. What a fucking fantasy world "the market" has created.