Solid Snake07 posted... You can't just remove tens or hundreds of billions of dollars of equity from the markets with no repercussions.
Even a whiff that something like this was a real possibility would send the market into an absolute panic. This would totally flatline everyone's retirement accounts, the politicians that were stupid enough to implement it will be pariahs and replaced with people who will immediately undo it. Which is why it'll never happen.
This is absolute nonsense talk
https://www.forbes.com/sites/brendancoffey/2019/09/25/a-wealth-tax-could-actually-make-billionaires-richer-while-raising-revenue/
A few years ago I was researching the majority shareholding Shoen family of U-Haul parent Amerco, when a fund manager I was speaking with had a serious request of me. When I spoke to Amerco management, would I emphasize they needed to free up more shares in the company? There were too few Amerco shares and too little daily trading volume, he said, that he couldnt buy more shares as things stood without breaking his funds rules.
That anxious fund manager shines light on a seeming beneficial paradox with proposed wealth taxes from Senators Elizabeth Warren and Bernie Sanders: its possible the government can raise more money and the taxed billionaires end up richer.
The reason is liquidity. Scarcity generally increases prices but not always, especially in the equities markets. Too few shares available to freely trade and businesses begin to be worth less, not more. Simply: dozens, perhaps hundreds, of large, successful companies are trading at inferior values and less-than-efficient capital costs because ultra-wealthy insiders own too many shares. That excludes them from trillions of dollars of potential investor money from many mutual funds, ETFs and indexes. Creating more freely traded shares through billionaire insiders needing to sell some shares to pay wealth taxes can unlock that trapped value.
More significantly for shareholders of billionaire-dominated companies, the lack of liquidity and independent shareholder control excludes many companies from being included in the indexes which are the basis for massive amounts of ETF investments. The S&P 500 is the index basis for $3.4 trillion of funds (and another $6.5 trillion benchmarked to it). The S&P excludes companies that are below a minimum $4.1 billion float of shares and only recently changed its rules to allow companies with less than 50% float (it previously had permitted some low-float, billionaire dominated listings, like Warren Buffetts Berkshire Hathaway).
You guys appear to have not researched this at all and just come up with this most bs hanging fruit arguments possible.