Far abler commentators than I have noted the insanity of the Dem attack on wealth and the wealthy, but I have seen enough to feel a need to chip in. The idiot (and wealthy) mayor of New York City and the bartender Congressperson from the same locale are the current cheerleaders for the Dem war on those who happen to have a lot of money, which, according to the Congressperson, they couldn’t possibly have earned. Fortunately, we have a few billionaires willing to defend themselves against the ludicrous assertion that they didn’t earn their money, Jeff Bezos being the most recent with an outstanding pillorying of that ding-dong dipshit who currently sits in city hall in NYC.
The great economy that this country has, driven by innovation and technology, exists because we created an environment in which people of genius who were willing to work hard could accomplish great things. The Fords, Edisons, Carnegies, and today the Musks, Bezos, Gates, Jobs, et al earned every penny they made. And while they were getting rich, they made thousands, hundreds of thousands, millions of other people wealthy–both their employees and investors. They also enriched the lives of all Americans, they raised the standard of living for everyone. Instead of demonizing these people we should celebrate them every day and we should be asking how we can nurture even more of them. Their success is our success.
The truth is that the Dems think wealthy people didn’t earn their money because all those billionaires who fund them–Alex Soros, Gov. Pritzker, the Rockefellers, the Daytons in Minnesota, and on and on, didn’t earn their money–they inherited it. Of course, the Dems won’t do anything that might take money away from this group. Personally I think one of the best ways we could address our debt problem is to limit how much money anyone can inherit. Inherited wealth beyond a few million doesn’t serve any great economic purpose and usually the heirs of the person who created the wealth manage to squander it and extremely rarely do they generate a similar benefit to the economy and society as the parent who passed on the money to them.
In fact, Dems have facilitated the creation of this unearned wealth and its use for political purposes by ignoring the abuses of the private foundation tax dodge. That should be eliminated. Hundreds of billions of dollars of tax obligations are avoided by this method, only available to the wealthy. No more should be allowed to be created, the ones in existence should be required to sunset in a few years and there should be an immediate one time tax of somewhere around 50% on all the assets of these foundations, with the proceeds dedicated to debt reduction.
The other source of wealth that doesn’t make any sense is the continued abuse of stock option and restricted stock grants by executives of public companies. Other than for rank and file employees, these options and grants should be banned. Management should be required to buy any equity they receive in the company. That could occur at a somewhat reduced price as an incentive, but the routine practice of giving CEOs and other high-level managers grants that often result in hundred million dollar plus windfalls should be ended.
These steps would make a huge difference in wealth and income inequality without harming the economy and without belittling the efforts of entrepreneurs who create immense benefits for society.
You might be interested, this is from a Facebook comment by Ryan Clancy, a self described democratic socialist in the Wisconsin State Assembly and rapid supporter of Francesca Hong (democratic socialist also in State Assembly) for governor. When questioned about his defunding the police stance he replied “the goal is to make the police unnecessary by actually investing in our community instead of wasting money incarcerating it. The idea isn’t that we snap our fingers next Tuesday and the police all disappear, but that we gradually replace many of them with people with skill sets that actually meet folks’ needs: housing navigators, mental health professionals, etc. Nobody is suggesting sending those folks to bank robberies, but instead working toward a society where nobody needs to rob a bank.” The utopia of socialism – what could go wrong?
Thank you for reading. I am constantly blown away by the stupidity of these idiots who actually think that out of thin air they can create trillions of dollars to just give away and that there will be no economic consequences. I guess people have to live it to believe it. They should talk to anyone who lived in Russia or Eastern Europe during communism or in China during Mao; I have never met anyone who had a good thing to say about the experience.
AS Milton Friedman believed. taxes on inherited wealth are both morally unjust and economically inefficient.
Seizing assets is no way to pay down debt incurred by the spendthrifts spending money they don’t have.
Threatening to seize what’s left of an estate would encourage consumption and not investment. Makes no sense.
Any time I hear the words “moral” and “unjust” I have the same reaction I have to the word “fair”. It has no meaning without some specific context. With all due respect to Friedman, just what moral code is referring to and what sense of justice. Taxes in a democracy are voted on by our representatives, sometime by us directly. How is that immoral or unjust? We have a massive debt problem in this country, Reps are as responsible for it as Dems. We are going to have to fix that in part by raising more revenue, at least until we get it under control. Taking excessive inherited wealth is in fact a very painless and economically efficient method of raising that revenue. Most of those assets are in the form of business ownership, equities or bonds and almost inevitably the large fortunes are frittered away by the heirs. Far better that they are forced to be transferred to pay estate taxes, as those who purchase the assets are much more likely to operate them effciently. As I said, those who inherit great wealth almost always engage in vanity projects, often political, which are wasteful to society. So euphemistic generalizations about “morally unjust” taxation doesn’t mean a thing to me. What I care about is very specific proven data and analysis about the effects of specific policies. Taxing estates above say $10 million at a very, very high rate seems eminently sensible to me and if the proceeds were put toward debt reduction, it would be immensely beneficial to society and the economy.
This article is keeping me from sleeping at night because it is so incorrect. Stock options and restricted stock is called delayed compensation. While they are not taxed before they are exercised, they are taxed as income when they are exercised. They are identical to the $11 billion of “unrealized” capital gains that your buddy Jeff Bezos got paid in 2025 that he paid absolutely no taxes on. If he would sell them he would have to pay capital gains at that time.
I marvel at how the ‘elite’s’ can convince people that unrealized capital gains are NOT capital gains because they are unrealized and that deferred compensation is NOT compensation because it is deferred. I believe we should tax ALL gains and ALL compensation as the Income Tax was designed to do at the time they are produced. This is how it would work.
Every year after a purchase of an asset [stocks, bonds, savings accounts, personal items held as investments (paintings) etc.] the item would be sold and immediately bought back. This is called a ‘Wash’ sale. In a Wash sale the increase in value is taxable income but the losses can only be applied to the asset basis. As an example.
You buy an asset for $100. One year later it is sold for $110 and immediately bought back for $110. The $10 increase in value is taxable income just like it would be if you sold the asset and didn’t buy it back. The new basis for the item would be $110 because that is what you just bought it back for.
If the asset is only worth $90, the $10 loss cannot be used to offset other capital gains but can be added to the new basis of $90 so that the asset basis remains at $100. If you want to use the loss all you have to do is sell the asset and not buy it back.
All the mechanism to implement this system are in place since 2012 and it could be started tomorrow. The problem is that the Federal Reserve in 2016 estimated that there is at least $50 Trillion (that’s with a T) of untaxed (unrealized) capital gains and income (deferred) in the United States. Today it is probably twice that. The first year it is implemented would be a killer and probably have to be phased in over a number of years.
I am not asking for something extra like your cheating buddies are, just that they pay their taxes on their income and capital gains as they make them just like I have to do. Maybe now I will be able to sleep.
The issue isn’t how or when they are taxed, the issue is that the total value of these equity issuances is absurdly high and involve no monetary risk from the executive. These grants are made by buddy-buddy boards and compensation committees composed of other executives who also want to get a lot of equity compensation while putting no money at risk. Bezos is a somewhat different case because he was the founder and builder of the business and took equity in lieu of cash. Musk is fine because he takes no cash compensation and the targets set for his equity to vest are incredibly high. That is not the case in most public companies where the exercise price is typically just the price at grant.