Elon Musk's 'wealth' is stock ownership in Tesla/SpaceX. He has 'some' cash income. Last year, he paid 30% taxes State (California) and Federal on income of ~30Billion $. His tax was ~10Billion $, the biggest tax contribution in American and World history. Rest of Elon's 'stock wealth' can only be unlocked by selling. If Tesla stock price crashes, Elon's magical 'stock wealth' disappears.
'Unrealized gains' tax is idiotic. Example: Tesla up 2% ? - > Make Elon pay -> Elon doesn't have cash ? -> Force to sell his stock -> Tesla stock crashes on Elon selling -> Elon's imaginary 'stock wealth' disappears -> IRS has to refund Elon
Not only will US govt not make money in this situation, its would cause chaos in the market. Many hedge funds, banks, 401Ks have Tesla stock in their portfolio, meaning innocent people will lose money. Great job ! US Govt, Elon and everyone else will suffer and lose.
What is the solution ? IRS collects tax when you SELL the shares. At that point wealth is not 'imaginary stock wealth' that could change every hour, rather cold hard cash. This is practical. Musk cannot buy food with Tesla stock, he has to sell it at some point to be able to eat and buy things.
iamtanmay@wolfballs.com 2 years ago
Why did the Banks give Musk money ? Because Elon put his Tesla shares as collateral. This is the same as mortgaging your house. If Elon does not pay the Banks back WITH INTEREST, he will lose the stocks.
If you consider a Bank Loan to be a handout or "other peoples' money", you are ignorant of basic finance