Thread by @gbponz

Thread: it is , anyway, only a costly loan son of #QE, and unintended consequences abound. Here are some, in no particular order: (/)
@Halsrethink @amlivemon @nglinsman @chigrl @DavidBCollum @DiMartinoBooth

https://twitter.com/ChadPergram/status/1453017783869059081

1. of course, there are not enough super rich to go around so this would trickle down to middle income / middle wealth families. Moreover, will pension plans be excluded? #401K, #IRAs? (/)

2. but let's assume there are: what will be the evaluation price? taxing EARNED financial income means that demand has balanced the supply generating that income. In this case, since no stake gets sold, that won't happen.(/)

So, a strategy for the #Bezos and #Musk of the world would be this: check if the date approaches for the application of said tax. Then, sell ALL of your stake... minus the voting rights. At that point, it's "earned capital gain tax", but at least you get taxed on real money.(/)

Bear in mind that you would have to sell part of the stake anyway to pay for the tax (no lending against your shares, not convenient😉); so why not ALL, if you can retain control? at the margin you could set it up like this:(/)

you put them in a vehicle which issues one for one against the shares, except that it retains voting rights and a preset sunset clause at a price which increases at a preset rate equal to the average required IRR of big pension funds on an event:(/)

That clause can get exercised within 120 days if and only if that tax law is repealed either in court or by Congress. Neat, uh?
3. given that the vast majority of invested money is in some kind of mutual funds or pooling arrangement, what happens there?

4. And since at some point those unrealized gains are either taxed on an inheritance basis or otherwise protected via trust arrangement and such, is #Yellen effectively voiding all Trusts (pun intended)?