None of the top 10 richest persons inherited their money. They are predominately high tech founders who started with almost nothing.

Most wealth is created, not inherited.

Most wealth is equity, on paper, value derived entirely from the perception of value. This is why the net worth of these individuals bounces around all the time, the stock prices are changing.

The general public think it is piles of cash, not so.

Tax the holdings of billionaires will backfire. This will require them to sell stocks to the general public to raise the cash to pay the tax bill. The fact the main guy is selling his stock will lower the perception of value of the stock. Say Elon Musk dumps a chunk of SpaceX or Tesla. The general public who hold that stock will see a value lost. Also, the revenue generated is cash removed from the economy and handed to the government, which will slow down the economy. Somebody has to actually spend their cash to buy the billionaires stock so he can send that to the government. In effect it is a tax on the general population when all of the effects are accounted for.

If Elon Musk "goes to cash", sells his entire equity position, the stock price will go to near zero. There's not enough cash out there to absorb that kind of purchase size.

Billionaires actually don't have a billion dollars. They have pieces of "paper", stocks, which we, the general public, set the value of.

Mike C.

Depends why he is selling. If the company is still sound, there is no way the price would go to near zero. Buyers will flock to pick up the stock at a slight discount, that is all.

The general public which generally receives public education is not educated on money in the least bit. To me it appears they are kept ignorant by design when it comes to money matters…….except for the matter of taxation. Lots of people get educated on the that.

Size of his holdings: $250B. That's about the same size as the entire GDP of Portugal or New Zealand. 75% of all countries in the world have less GDP.

If he says "sell it all", the perceived value of the stock will go down since he has decided to dump it. There's nothing in this world that requires $250B in cash right away, so it could only mean lack of faith in his companies which will translate to a drop in perceived value. When major shareholders sell chunks, it is news and that has to be reported. it is a signal that others should get out, too.

The buyers aren't sitting on $250B of ready cash, either. So where do they get that cash? The only place with enough value and liquidity will be other stocks. They decide to sell those other stocks, which lowers those values. Who buys all those stocks? It cascades.

Essentially, big founder type shareholders like Musk, Bezos, etc have "paper" wealth that is due almost entirely to perceived value of a stock. In order to keep that value, they can't use it, a catch 22.

Tesla's market cap is about $1.25T. Musk holds about 20%. If he dumps lowering the value of Tesla stock, 80% of that impact with be others. There are side effects for any move he makes.

There is a huge difference between what someone is "worth" and how much "cash" they have when you operate at the multi billionaire level. The public thinks it is obscene that any one person has $250B in cash. They don't think it is obscene that a founder creates a $1.25T value company from nothing that hires 70,000 employees and makes an industry leading product. Many don't get the difference.

Mike C.

Working with kids building airplanes, I’m up close and personal. Most are brilliant, or they wouldn’t be in this class, but few know which end of a screwdriver to hold. They don’t like to make a trip to the toolbox. We’re there it instill confidence, and I’m loving it!

You are giving the public way too much credit.

$4.9B in government subsidies is not exactly starting with nothing. And it's just not the money or hard work that gets you there necessarily. Having the right family contacts or money literally puts you on 1st, 2nd, or 3rd base. Borrowing against your stock to avoid taxes and live lavishly on is not exactly what I'd call paying your fair share. These people can afford to pay lobbyists and Congressmen to write laws that favor them. If paying tax on stock value is too onerous then find another way. There is nothing special about these folks that entitles them to not pay taxes on their income.

That's also 0.5% of the capitalization of the US stock market.

I can almost guarantee you that people will be backing up their trucks to buy his shares if he decides to sell as long as the company fundamentals are still sound.

At any rate, large deals like this generally happen via dark pools, not on the open market.

Who in the top ten had that?

Musk certainly didn't.

This kind of thinking is designed to create a sense of unfairness or envy among the public.


Having them sell their stock will cause more value lost for the other stock holders.


Are you accusing them of tax evasion? I see nothing that indicates they are illegally avoiding paying tax on their income. You do know the difference between "income" and "wealth", right?

The above statement is fake news created to vilify success.

Making the rich poor doesn't make the poor rich. That's the main lesson from communism.

As a practical matter, why would we want to drive away from the USA the very people driving responsible for the USA's lead in technology? They can move anywhere in the world they want, but they choose to come here precisely because this country fosters innovation and entrepreneurship. Take that away, and our country is doomed.

What is wrong with someone starting from nothing and creating a multibillion dollar business that employs 10s of thousands and delivers highly desirable goods that lead the world? Why should we drive those people away?

Mike C.

I will just say that an overwhelming majority of millionaires and billionaires are self made. A variety of sources easily found to verify that.

Compared to the rest of the world it seems to me that anyone born in the U.S. is already on 1st base. Many say a post secondary education is important to gaining wealth. Practically anyone in the U.S. can get that regardless of where they start life. Yes, you might have to borrow money, work, or join the military first but education is available. Being born or raised with advantages helps but almost all successful people make it through hard work, creativity and risk taking.

WRT to taxing the value of stocks - you can tax anything. There isn't anything inherently "fair" or "unfair" in ANY tax. They are all arbitrary to some extent and always, through all time, unequal. The thing that every "policymaker" who is elected tends to forget is that there are always unintended consequences when you attempt to coerce or manipulate behavior or reward one group over another (an essential element of all systems of taxation). Those unintended consequences can be painful.

We'll see how all this turns out. I don't know exactly what will happen but I am certain it won't be as the soak the rich crowd expects. In the meantime, since I'm not one of those you say can buy what they want with lobbyists, I'll just work hard, understand the rules as written and try to minimize the damage they create but I won't worry about them because worrying about things you can't control is a waste of time. And I don't have enough of that.

I will just say that an overwhelming majority of millionaires and billionaires are self made. A variety of sources easily found to verify that.

Compared to the rest of the world it seems to me that anyone born in the U.S. is already on 1st base. Many say a post secondary education is important to gaining wealth. Practically anyone in the U.S. can get that regardless of where they start life. Yes, you might have to borrow money, work, or join the military first but education is available. Being born or raised with advantages helps but almost all successful people make it through hard work, creativity and risk taking.

WRT to taxing the value of stocks - you can tax anything. There isn't anything inherently "fair" or "unfair" in ANY tax. They are all arbitrary to some extent and always, through all time, unequal. The thing that every "policymaker" who is elected tends to forget is that there are always unintended consequences when you attempt to coerce or manipulate behavior or reward one group over another (an essential element of all systems of taxation). Those unintended consequences can be painful.

We'll see how all this turns out. I don't know exactly what will happen but I am certain it won't be as the soak the rich crowd expects. In the meantime, since I'm not one of those you say can buy what they want with lobbyists, I'll just work hard, understand the rules as written and try to minimize the damage they create but I won't worry about them because worrying about things you can't control is a waste of time. And I don't have enough of that.

The Yellen plan to tax unrealized gains is insane... madness. How to calculate? How to adjust and get "refund" when value falls. So many other issues. How about taxing unrealized labor? Sheer sophistry... Unbelievable that that lady is an "economist".

On the other hand,, the gov't has to stop the favorable tax rates for capital gains. Income is income. Period. Tax it at the same rate, regardless of the source. Patently unfair on multiple dimensions... why should someone who toils for a living, pay a higher tax rate than someone who invests for a living?

Please don't give me the BS that we have to provide an incentive to invest. The incentive is already there.

For the record, I am an unabashed capitalist. But the differential treatment of capital gains and ordinary income in this country is just wrong and unfair.

Deleted

If it doesn't make sense, or is patently absurd, it's not "financial", it's the other thing that can't be mentioned.

Money that is invested and results in capital gains (or losses) has already been taxed at least once.

Who in the top ten had that?

Musk certainly didn't.

This kind of thinking is designed to create a sense of unfairness or envy among the public.


Having them sell their stock will cause more value lost for the other stock holders.


Are you accusing them of tax evasion? I see nothing that indicates they are illegally avoiding paying tax on their income. You do know the difference between "income" and "wealth", right?

The above statement is fake news created to vilify success.

Making the rich poor doesn't make the poor rich. That's the main lesson from communism.

As a practical matter, why would we want to drive away from the USA the very people driving responsible for the USA's lead in technology? They can move anywhere in the world they want, but they choose to come here precisely because this country fosters innovation and entrepreneurship. Take that away, and our country is doomed.

What is wrong with someone starting from nothing and creating a multibillion dollar business that employs 10s of thousands and delivers highly desirable goods that lead the world? Why should we drive those people away?

Mike C.