Interesting. Any idea what kind of revenue this would bring? Also, what's to stop massive expatriation of cash?
Where would they put the cash? And charities aren't really setup for that sort of thing. It would raise a TON more money than sunsetting the mortgage deduction at, say, $25K. I would include real-estate in the valuation. That would capture some additional revenue, though you might have to phase that in to avoid hitting the real estate market again. -XC
But couldn't taxing assets create a problem of liquidity for some companies? For example a large manufacturing firm that is having a cash flow problem. Their assets may be massive, because capital equipment and land are so valuable, but their available cash may be limited. It may force them to borrow against their assets just to pay the taxman. But then what of a company like Facebook, who owns next to nothing, but is somehow "valuable". Does their market cap count as tax liability? Its an interesting idea that I've heard some commentators discuss, but it wouldn't be without difficulty.
I was talking about income tax on assets - most companies don't keep big assets on hand. People like MS and Oracle are notable exceptions. Plus that's why I suggested a billion. As for their cash flow issues: tough crap. Taxing me more causes a cash flow problem for me. And, FWIW, remember, you don't tax companies, you tax consumers. -C PS - Market cap and unissued stock are not assets, as I understand the term.
At face value, I like it in the fact that it pushes sitting cash back into the game. However, I wonder why you favor this approach over others. It has a bit of 'redistribution' to it, which has been a very dirty word. Has anyone been floating this idea around?
Yeah, a number of people in the center/right blogosphere have been floating it around. I hope it's on the table. If we're going to have more redistribution, I'd personally like it to really really hit protected constituencies that support the heck out of redistributing my piece of the pie. Buffet wants to play in tax policy? Let's take it out his hide. Heck, I'd say graduate it so that the last $20B in assets is taxed at 50%. If the 1% should pay more, then the 0.01% should pay a LOT more. That sort of progressive taxation would be a lot less harmful to small business than what's on the table. -XC
Not that one, but many things like that. I am, frankly, completely disbelieving that we can dig out way out of this hole by raising revenue. But I'm in favor of starting with the really wealthy and protected entities that are pushing programs that raise my personal taxes. People like the Ford Foundation do a lot of good, but cost me a lot of money. Time for them to chip in. _XC PS - While we're at it, why not force some German style executive compensation caps on them? The guys running and sitting on the board make bank. How about a cap on their income? Or even a special income tax level for people in a 503(c) world?
Cap on income?!?!? You're talking like a socialist! I actually think there's a lot of merit in that argument. There are many examples of, say, cancer research charities who seem to do nothing except "raise awareness", which is to say they put on fancy dinners. All the liberals in the Ivy League business schools have running a non-profit/charity as their goal, but I don't think any of them has working for a middle class income as a goal.
No, I'm talking about an enforced ratio for specific entities. If a corporation wants to be, essentially tax free, then there are a lot of other strictures they have to obey that aren't in force in a for-profit entity. I'm talking about one more, not a new class of restrictions that are across-the-board. I am not a slippery slope guy (except for the first, second, and fourth amendments) but I'd understand an argument against it based on that. -XC