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What's ironic about your statement is that it's this exact belief--that founders should remain in control--that has led to the widespread adoption of dual class

by dm_ 3mo ago

What's ironic about your statement is that it's this exact belief--that founders should remain in control--that has led to the widespread adoption of dual class shares, in which founders maintain control while ceding a majority of equity. And the irony here is, by that same token, founders could maintain in control while not having such large equity stakes, and not becoming so rich. So I do not think this is an argument for billionaires.

qaq 3mo ago
if you look at actual proposals like in CA they focus on taxing based on control %
- dm_ 3mo ago
  I don't think this is true of "proposals" in the plural. This is arguably true of the California ballot measure due, allegedly, to sloppy drafting. But this isn't a fundamental aspect of wealth taxes; it's a choice. So I don't think it's a meaningful argument against wealth taxes in general. (As an unrelated point, I think dual class shares are sort of bad and it makes sense to me to discourage them as a matter of public policy, but this doesn't seem like necessarily the best way to do it.)
  - qaq 3mo ago
    I don't think it sloppy drafting. They are trying to close "loopholes".
    - dm_ 3mo ago
      I'm not a tax lawyer, so take this with a grain of salt, but yes, I think they were trying to close loopholes, but did so sloppily. Read the text (https://oag.ca.gov/system/files/initiatives/pdfs/25-0024A1%20%28Billionaire%20Tax%20%29.pdf https://oag.ca.gov/system/files/initiatives/pdfs/25-0024A1%2...), specifically 50303 section c. It seems to me that the authors were, as you say, trying to close a loophole, namely that where I set up a Nevada LLC to which I hold 99% of voting shares but 1% of outstanding equity, put my assets in it, and just direct the LLC to spend on things I want it to--but in the process, they failed to realize that non-public super-voting shares (like Google class B shares) seem to fall into category (3) of section (c) (i.e. neither sole proprietorships nor publicly traded assets). I don't think that's a great design, though it's still worth noting that it doesn't rule out privileged shares in general--GOOGL, to give an example, are privileged voting shares that trade publicly, and thus are obviously under category (1), and assessed per their FMV. But in any case, I stand by my broader point: this is a specific detail of how the California proposal has been written; it's not a fundamental aspect of wealth taxes. Switzerland has a wealth tax that does not have this aspect, for example.

by dm_ 3mo ago

qaq 3mo ago

if you look at actual proposals like in CA they focus on taxing based on control %

dm_ 3mo ago
I don't think this is true of "proposals" in the plural. This is arguably true of the California ballot measure due, allegedly, to sloppy drafting. But this isn't a fundamental aspect of wealth taxes; it's a choice. So I don't think it's a meaningful argument against wealth taxes in general. (As an unrelated point, I think dual class shares are sort of bad and it makes sense to me to discourage them as a matter of public policy, but this doesn't seem like necessarily the best way to do it.)
- qaq 3mo ago
  I don't think it sloppy drafting. They are trying to close "loopholes".
  - dm_ 3mo ago
    I'm not a tax lawyer, so take this with a grain of salt, but yes, I think they were trying to close loopholes, but did so sloppily. Read the text (https://oag.ca.gov/system/files/initiatives/pdfs/25-0024A1%20%28Billionaire%20Tax%20%29.pdf https://oag.ca.gov/system/files/initiatives/pdfs/25-0024A1%2...), specifically 50303 section c. It seems to me that the authors were, as you say, trying to close a loophole, namely that where I set up a Nevada LLC to which I hold 99% of voting shares but 1% of outstanding equity, put my assets in it, and just direct the LLC to spend on things I want it to--but in the process, they failed to realize that non-public super-voting shares (like Google class B shares) seem to fall into category (3) of section (c) (i.e. neither sole proprietorships nor publicly traded assets). I don't think that's a great design, though it's still worth noting that it doesn't rule out privileged shares in general--GOOGL, to give an example, are privileged voting shares that trade publicly, and thus are obviously under category (1), and assessed per their FMV. But in any case, I stand by my broader point: this is a specific detail of how the California proposal has been written; it's not a fundamental aspect of wealth taxes. Switzerland has a wealth tax that does not have this aspect, for example.