[londons_explore]

> late stage companies have valuations that are too high to IPO without taking a big valuation haircut.

AKA, we've made a loss, but don't want to admit it yet.

If I were tax policymaker, I would force all assets to have a valuation every year, and published in a register, and allow anyone else to buy any of those assets for the declared value.

If you over declare, you pay more tax. (you'd pay perhaps 1% of the asset value every year, and that would replace income tax, capital gains tax, etc)

If you under declare, someone else will come take your asset off you for whatever value you said.

Suddenly this whole idea of "unrealised gains/losses" goes away, as does fake valuations for tax avoidance.

[krisoft]

> If I were tax policymaker, I would force all assets to have a valuation every year, and published in a register, and allow anyone else to buy any of those assets for the declared value.

That feels problematic. How much is your wedding band? Or the urn with your grandma’s ashes? Or the favourite teddy bear of your child? Or all coppies and rights to your wedding photos?

I hope you declare them high enough or people might just take them for the lolz.

[s1artibartfast]

you are thinking too small. Buy up all the futures in food, 100x your stated valuation, and sell it back to the starving masses.

[krisoft]

Yeah. Maybe. That plan sounds hard. In particular at that level of disruption society will defect. You will owe all the food on paper, but nobody will enforce your right.

Probably it would be much more lucrative to snatch up the homes of older folks who accidentally misdeclared. With the right PR you can even label your victims as tax cheats! What a “beautifull” system!

[s1artibartfast]

Why should we let private profiteers benefit from the mistakes of the elderly. We should have the IRS snatch their homes directly for resale. This would optimize turnover and government revenue.

[FactKnower69]

feigning an inability to distinguish between private property and personal property to manufacture resistance to reform of political economy, what a concept

[krisoft]

Are you saying that when they said “all assets” they actually meant “some assets”?

[JumpCrisscross]

> I would force all assets to have a valuation every year, and published in a register, and allow anyone else to buy any of those assets for the declared value

This would make investment bankers and lawyers happy and nobody else.

Note that any company with a '40 Act investor already has public valuations per those investors' opinions published--it's how you get "Fidelity marks down value of Twitter stake again" headlines [1].

> this whole idea of "unrealised gains/losses" goes away

As does the entire American private capital market, including small business, since illiquid investments now become punitively expensive to hold.

The more I think about it, the more impressive this proposal becomes in terms of solving almost zero problems while actively making the problem worse in different ways.

[1] https://www.reuters.com/technology/fidelity-marks-down-value...

[singron]

This is has actually been used before.

Ports would tax ships on the value of their cargo. It wasn't viable for the port to create valuations themselves, so they left it up to the ship, but the port had the right to buy the cargo at that price.

The scheme kind of works well if it's liquid commodities (e.g. grain, oil, lumber) and the purchasing right is held by a non-capricious authority (i.e. one that only exercises that right to call a bluff).

Taking a down-round on an IPO can be very damaging to a company. Since employee equity is based on options, that puts those options underwater and means employees will make nothing in the IPO. Internally, the company is doing 409a valuations and admits in writing that the valuation is down.

[Gigachad]

I wonder how this works for items that have far more value to the owner than the market value. Say shipping my personal belongings to another country. The value of my stuff is probably quite low, but it would be incredibly inconvenient and disruptive if it was purchased at it's market value and flipped on ebay.

[lokar]

Do many companies pay in options anymore? I’ve only seen RSU for years now.

[singron]

Basically all early stage startups use ISOs. Public companies typically use RSUs. Some startups transition to RSUs before their IPO.

RSUs are kind of unworkable if the valuation will increase significantly before the shares become liquid since you owe taxes on their value as they vest whereas ISOs let you defer taxes until at least exercise if not sale.

[JamesBarney]

> If I were tax policymaker, I would force all assets to have a valuation every year, and published in a register, and allow anyone else to buy any of those assets for the declared value.

You and your dad run a plumbing business. Every year you have to pay someone 10k to get a valuation. Then strangers can buy a piece. Do you have an operating agreement? If not he can force a sale if the company.

I don't think this is a great policy.

[axus]

Couldn't the annual valuations be gamed by insiders? Who's going to impartially decide the declared value?

Best alternative I can think of is a soft fascism where the government receives a small stake in the company each year instead of cash. Then holds or auctions it as some bureaucrat sees fit.

[JumpCrisscross]

> Couldn't the annual valuations be gamed by insiders?

Yes. It's not even difficult to imagine. Management undervalues group assets to buy them on the cheap for themselves.

[fuzzfactor]

>Management undervalues group assets to buy them on the cheap for themselves.

It's not my imagination, I've seen how they sell the same assets back for a profit after enjoying some tax depreciation for a while too.

[happyopossum]

> and allow anyone else to buy any of those assets for the declared value.

Pretty problematic to force the sale of assets from private individuals in anything remotely resembling a free country.

That aside, wouldn't this just result in megacorps owning literally everything in a matter of a few years?

[londons_explore]

You mean those megacorps that don't like to pay many taxes? Means individuals can simply buy stuff off the megacorps.

[fluoridation]

Won't individuals also have to do those valuations? What prevents someone from taking the stuff right off your hands, and so on ad infinitum?

[ttymck]

"allow anyone else to buy any of those assets for the declared value"

How would this work?

[JumpCrisscross]

> How would this work?

Private ownership would become impractical for the hoi polloi.

The wealthy would need to pay a new class of bureaucrats to keep asset values up to date, to continuously incorporate new information into their marks. Everyone else would be better off renting--owning a car would be risky as it could be snatched from you at a moment's notice due to an overnight shift in the metal markets.

Remarkably similar to a feudal system, actually.

EDIT: What am I thinking, you'd just move all your financial assets overseas and maintain as little real property as possible domestically. The same thing folks do in the Gulf countries where the monarch gets stealsy from time to time.

[londons_explore]

Bob declared his car to be worth $18k in 2023. Fred fills in an official form, pays $18k to bob, and takes bobs car. Perhaps a 1 month handover period is given, and perhaps a 10% 'hostile sale' fee is given to the government to prevent abuse of the system to take houses from grannies.

Lets say any item worth over $10k (including cars, land, houses, companies, etc) would be part of the system.

Another way of looking at it is "all items in the nation are always for sale, and if you don't want to sell you better choose a high price".

Obviously if you don't want your stuff taken, declare a high value. But you'll pay a bit more tax for the privilege.

[s1artibartfast]

Perhaps we could institute a similar law for people and tax their self reported value of their time/labor. If you under-report you can be press-ganged into slavery for a specified duration, say 1 year.

This would ensure that people's labor and their bodies would be put to the most efficient economical use as well as increase tax revenue.

It would also solve the problem of undercompensating of workers. If your employer values your experience and knowledge, they would have to pay a premium for it, otherwise a competitor would buy you out from under them.

[gruez]

Poaching is already a thing. Why do you need a press gang law on top?

[s1artibartfast]

poaching is currently inefficient. Poachers have find employees and many employees refuse the offer for selfish reasons, Even if the salary is higher and would generate higher income taxes. These people are cheating society of tax revenue and growth it would otherwise have.

Lots of people hoard their time, spending it with friends, family, and children. This would force that time and labor into the market, where it could be taxed and contribute to social good.

A woman reading a book or singing to their child creates no taxable income, and doesn't contribute to GDP. Under the current proposal, If She didn't pay sufficient income tax on the time she selfishly hoards, a company like hooters could buy her and put her labor to more productive use.

[JumpCrisscross]

> perhaps a 10% 'hostile sale' fee is given to the government to prevent abuse of the system to take houses from grannies

So Bob is not only out a car, but down $1,800k to boot?

[ttymck]

Surely you can't be serious. Say, in this fantasy world, my car appreciates $3k. Can Fred still pay $18k before I have a chance to re-assess?

[londons_explore]

If some asset changes in value, you could reassess at any time.

Just like a car dealer changes the sticker prices on his cars every few days,

[pertymcpert]

Have you really thought this idea through before you write about it in public?

[sroussey]

This will be fun with crypto. You assessed yesterday and it shot up in value and I take it off your hands at 3am.

[happyopossum]

So now you have a full time job managing the declared value of all of your assets? Or perhaps you'd suggest families now have to hire an asset management firm?

this is ridiculous

[whatshisface]

If you show up at the tax assessor's office with a check for more than the self-reported value of my home, realistically plus the premium the government pays in eminent domain cases, you get the title. That idea is pretty much "eminent domain for all."

[jermaustin1]

This is terrible. I don't want to loose a priceless family heirloom (grandma's Sheraton-style rocking chair from 1890s) just because someone wants it and can write a check for $1 more than the assessed value. That discounts sentimental value. And if I now have to declare sentimental value and pay taxes on it, I'd rather burn it to the ground (grandma would approve).

[whatshisface]

A lot of people hate eminent domain too, for that exact reason. I think libertarians want to get rid of it entirely because it's an involuntary transaction.

[JamesBarney]

Yeah eminently domain isn't great. But also it's better than the alternative which is having a country without roads.

[lotsofpulp]

Not being born to a grandma who could afford a life stable enough to preserve and pass down such a chair is also an involuntary transaction, but libertarians don’t seem to talk about that.

[BobaFloutist]

That seems really annoying to deal with. It's possible it would lead to a better society eventually, but in the short term I'd rather speculators not buy my shitbox car out from under me because they spotted the chip shortage before I did.

[whatshisface]

It might not be so bad if you were allowed to accept an increase in your tax assessment rather than selling at the new price.

[JumpCrisscross]

> might not be so bad if you were allowed to accept an increase in your tax assessment rather than selling at the new price

Sounds like a bonanza for developers.

[whatshisface]

I think that's the point, to free up all the economic activity that's being held up by patents, copyright and land underuse, and to get fair tax assessment on assets previously exempt from property taxes as a bonus.

[Detrytus]

There’s a similar concept with real estate taxes in some countries: you pay your tax based on self-reported valuation, but if you sell for a price that’s higher than this valuation then you have to pay adjusted tax for like 5 years back.

[s1artibartfast]

You just eliminated the right to hold assets and conduct most long term planning. Sounds terrible.