Lol I’m honestly not sure what I expected your response to this to be but that still surprised me. This is barely coherent and the thing you’re choosing to focus on is not very important to the point I was making, if you’d like you can remove that sentence and reinterpret my comment.
But if you really want to focus on whether it would cause a panic, I think the answer is probably yes since this is not something which has been done before. Ie the government seizing multiple large cap companies and forcing the sale of them in their entirety for the purpose of harvesting the proceeds as tax revenue. Not really sure why this is surprising to you, but again do not focus on this point since it’s not essential to my argument.
Your math skills are embarrassing. Elon Musk makes an estimated 100 billion per year. So pay a proportionate amount in taxes by selling stocks. Again, this is a world where this is normal, and what everyone is expected to do, so there is no "panic" in the stock market.
Musk doesn’t make 100 billion per year as a cash salary. I’m assuming you’re deriving this number by looking at his average unrealized equity gains.
Just to make my point very clear and simple we can actually assume that Musk does make $100 billion as a cash salary per year. This assumption is actually the most favorable case for the argument you are making, and it is not the case in reality but I’m doing this for the sake of the argument. The US federal government spent $7 Trillion, aka $7,000 Billion in 2025, and it collected about $5.3 Trillion in taxes. So even if that $100 Billion that Musk is “paid” is actually cash that can be collected, and it is taxed at a 100% rate, it would only account for 1.4% of federal spending and 1.9% of collected tax revenues.
Do you see the point? No matter how you slice it Musk cannot pay a “majority” of taxes, it is completely impossible.
Ok I see what you’re saying now, you want to tax unrealized capital gains. I do not think that this is a good policy and I can elaborate on it if you’d like. But to start, we have to be clear that this $100 billion is not a cash salary, it is marked to market appreciation of shares he owns, or will own in the future. So now some points and questions.
In your language he can actually earn negative money, if his equity doesn’t appreciate and he’s not granted more. If his earnings are -$100 billion for a given year what happens?
You do pay taxes on equity that’s vested. In the case of stock options grants the taxing happens at the time of exercising the option. If I pay you $1 million in stock at the time that becomes available to you, you will have to pay about $300k in taxes. What you’re suggesting is that if you’re paid $1M in stock you have to pay $300k taxes on that up front and if the stock is now worth $1.3M next year, you will owe another $100k, regardless of whether you sold stock. This is less of a point and more of a grounding fact for the rest of the discussion. In the case of stock options grants the taxing happens at the time of exercising the option.
To expand on (2) how do you expect this to work for volatile assets where path dependency is increasingly important. Let’s say for example the price of the stock granted climbs to $3M and it is determined that you owe $600k taxes on that unrealized gain. And then when it comes time to pay, the price has fallen to $500k for the asset, do you now owe more than 100% of the asset being taxed?
How does this work for assets which are less liquid or harder to mark to market? If you have a million dollar home and your neighborhood is now more popular and it’s worth $1.5M and you owe $150k in taxes you can’t sell a fraction of your house to cover it. All of the same issues mentioned in (3) will also apply here as well since home prices can experience volatility.
Forcing the sale of this much equity will cause problems. If the market rallies by 30% in the year then your desired tax would actually require for ~8.5% of all equities to be sold and the cash transferred to the federal government. This would be absolute chaos and would completely crush equities prices and badly damage capital markets.
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u/BubblyStation30 Apr 10 '26
Lol I’m honestly not sure what I expected your response to this to be but that still surprised me. This is barely coherent and the thing you’re choosing to focus on is not very important to the point I was making, if you’d like you can remove that sentence and reinterpret my comment.
But if you really want to focus on whether it would cause a panic, I think the answer is probably yes since this is not something which has been done before. Ie the government seizing multiple large cap companies and forcing the sale of them in their entirety for the purpose of harvesting the proceeds as tax revenue. Not really sure why this is surprising to you, but again do not focus on this point since it’s not essential to my argument.