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No. of Recommendations: 7
It's not easy to seize 3/4 of the net worth of all the billionaires and come out clean on the other side.

My turn for the Pshaw.

No one in their right mind is suggesting that 3/4 of the net worth of all billionaires be seized. The point of the comparison is to give some understanding to the magnitude of the wealth disparity issue.

It also points out that if we want to limit wealth disparity or stop it from getting worse, we need to tax that wealth. How exactly to do that is a difficult question.

One idea I've had, but haven't fully fleshed out, is to start taxing unrealized capital gains. Currently, the US taxes capital gains only when those gains are realized - when the asset is sold. That treatment allows these large fortunes to grow free of income taxes. The wealth of the top people frequently mentioned - Bezos, Gates, Buffett, Musk, Zukerberg - is almost entirely from ownership of their company stock which has never been taxed.

So what if we decided to tax unrealized gains in excess of some large number - say $100 million. Treat those gains as if they had been realized and tax them like any other capital gains. So when your unrealized capital gains reach $110 million, you pay tax on $10 million of that gain. Of course, you'd also need to adjust the basis of those assets up by $10 million. Viola - these large fortunes start to get taxed.

There are myriad complications I can think of that would need to be dealt with, of course. And those may not be easy to work out. But it's at least a framework of a way to tax these large accumulations of wealth before the owners die and are subject to the estate tax.

--Peter
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