Under a 3% wealth tax, Bezos’ first-year “fair share” exceeds *all* his liquid assets. Founders’ wealth is in their companies, not yachts. There’s nothing worth enough to sell but ownership stake. A cartoon vision of wealth is going to dismantle the strongest economy in the world
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Replying to @webdevMason
3% sounds high but I don't get the objection - is the idea that he would cease to be CEO because he loses his shares? If Bezos is the best CEO can't he stay on because others shareholders will vote him in? As for liquidity he can hand over 3% of his equity to the IRS directly?
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Replying to @robertwiblin @webdevMason
Liquidity may be a bigger problem for other assets, but can't the IRS just take 3% of the the thing on paper, and collect the $ whenever it's sold? I feel like some creativity to accommodate this new kind of tax should be able to make it practical in most cases.
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Replying to @robertwiblin @webdevMason
I can well believe that wealth taxes have bad incentive effects, as do other taxes on capital and labour income, but haven't heard a clear argument that they're worse than the alternatives, at appropriately low rates.
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Replying to @robertwiblin
Bezos can keep his job & still find himself newly beholden to more conservative interests with less personal skin in the game. I think this matters — where would SpaceX be? If you're not taking the tax until a sale, it's just a worse capital gains tax that disincentivizes risk.
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Replying to @webdevMason
Usually I also like concentrated ownership of companies, as groups who have a lot of their $ in a company have the greatest incentive to pay attention and manage it well. That said,
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Replying to @robertwiblin @webdevMason
i) Do we have any evidence on whether companies actually do much better when founder/CEOs retain control for many years? I could also see them being worse in various ways and boards being right when they remove them (e.g. skills to run big corp are different than to start one).
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Replying to @robertwiblin @webdevMason
ii) I can think of lots of founders who are still running the show while owning well under 50% of the company - Bezos, the google guys, Zuckerberg, Tesla/SpaceX, Dell (at least he took it back). How strong is the evidence other tech investors really are too risk averse?
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Replying to @robertwiblin @webdevMason
If other investors really are too risk averse why are they keeping these founders around? We could also do a carve-out if this mattered a lot where founders can sign over dividends and capital gains on 3% of their equity each year while retaining voting rights on the shares.
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Replying to @robertwiblin
(1) Boards are typically so hesitant to oust founders that it's hard to know what conclusions you can draw from those cases. Softer power shifts are very tough to look at. Successful VCs are very pro-founder. Maybe the entire system is wrong, but it's not a test I wanna run live.
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(2) Tech investors are WONDERFULLY *not* averse to risk. It's made them, along with their founders, extremely wealthy. Which means they are also subject to a 3% tax on everything they own, which is mostly... portfolios of tech companies.
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Replying to @webdevMason @robertwiblin
What happens to all the founder/investor stock that *only* very successful owners have to sell off? Maybe their funds buy more of it back. Maybe VC compensation shifts rapidly from stock to income, further eroding skin in the game. Maybe less successful investors snap it up.
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Replying to @webdevMason @robertwiblin
(3) There usually aren't dividends. Capital gains isn't a thing until stock is sold. You *could* transfer an increasing ownership stake in virtually every highly successful business to the federal government, but obviously DON'T DO THAT.
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