If you start a successful startup in your twenties, a 2% wealth tax with a $50 million threshold means that over the course of your life the government will take 65% of your stock. Why so much? A wealth tax compounds. http://paulgraham.com/wtax.html
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Will anyone choose not to build a successful startup due to this?
Consciously no. Unconsciously yes. One of the biggest things motivating founders is the example of other people who've done it. Especially if they know them personally. The richer such people get, the more powerful their example. And vice versa.
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This feels like a nonissue. Given the current saturation in the startup space, I wouldn't be upset if we lost some of the founders motivated by wealthy role models, and kept the ones who are the most passionate about their product.
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This is the right answer. It’s a non issue. Sorry, this isn’t the right moment to worry about protecting the interests unicorn founders.
@paulg, have you been following crypto? Community minded approach to product and ownership is the future.
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Why do you assume that the power of their example corresponds to how rich they are?
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I agree that seeing wealth and power accumulated inspires others to pursue wealth and power for themselves. Anyone not inspired by $50M worth of wealth and power is unlikely to be inspired by $100M. It’s a scoreboard at that point.
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“Wow, I’m not even going to bother with this startup because it might only net me $98M rather than $100M when I exit.” Said nobody, ever.
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You seem to be mistakenly treating the tax as a one-time thing.
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I would suspect there are other good reasons for creating a startup, including environmental issues, social good, education etc. etc. I do wonder if you are correct in that founders see other people succeeding and then decide on that course, yet would consider the tax implication
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Unsure if the motivating effect on others, conscious or unconscious, is linear. Above some threshold it feels, intuitively, hard to say. Certainly no good evidence one way or the other that I can find.
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Even if this wasn't completely made up, it would absolutely not be a problem
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