to the idea of a wealth tax.
First, this isn't an income tax... which is good because a billionaire doesn't really need regular income. In fact, they can almost completely avoid income tax by simply borrowing money from a bank using their considerable assets as collateral for the loan. They pay a modest amount of interest on the money they borrow... and, when the loan comes due, simply roll it over into a new loan. No income. No capital gains. Nada.
So... the thought is to impose a wealth tax, especially on those stocks they own. However, to turn that into cash that the government would be able to spend, that would entail the sale of said stock. Any sale of that size ( even if stretched over a period of time ), especially by a major shareholder or founder, would tend to move the entire market lower ( especially in those tech stocks ). That probably would trigger some more massive sales by institutional investments as well ( no one wants to be left "holding the bag" )... thus possibly causing a significant downturn in the market.
Now, we may already be headed for a market "correction"... this wealth tax could accelerate it and make the market downturn even worse. The "magnificent 7" are already the only thing holding up wall street, and some would say the entire economy. Trump's trade policies may well cause a depression similar to 1930s ( which was proceeded by a stock market crash ). Part of what made the depression even worse was the tariff policies of the USA. Trump is trying to gain control of the Fed and have it set interest rates lower... to avoid the depression from his own trade policies.
What Trump cannot control is the bond market. If that craters then we can kiss the economy goodbye, possibly for 10 years or more, in a second great depression.
This wealth tax might well be the match that lights a stick of dynamite on the whole thing. For those of you so angry that "fuck it, burn it all down" seems reasonable... remember that the wealthy always do well in a downturn as the poor and middle class ( what is left of us ) will sell any assets we own for pennies on the dollar to get money for food and energy and housing.
Yes we need to tax billionaires... but let's find a different way to do it. I would propose a luxury tax... a tax on any goods ( other than real estate ) worth more than, say, 100,000 USD... Let the billionaires keep their money, but tax the next airplane they buy or yacht they commission. Maybe on any real estate transaction of over $2M. Something like that. Sure, they can avoid the tax just by not purchasing anything... but what fun is that for them... Bezos just spent like $25M for a wedding. Adding a 1or 2 percent luxury goods tax won't phase them. Needs to be a nation wide tax, not state by state.
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