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South Korea has a 50% heritage tax - and it applies, as far as I'm aware, to everything. Causes and absolute havoc when billionaires die and the companies need to be broken up, but ultimately it seems to work
Won't anyone think of the havoc people still inheriting millions of dollars have to go through? 🎻 More people might have an opportunity to buy in on the society's corporate institutions? 🎻
That sounds like the right thing to do for a society that values... Society.
Can't the heirs just adjust between themselves who gets what and in what form?
It would make more sense to just pay out some heirs and keep companies and other high value assets as undivided as possible.
When someone dies, something happens to the assets they own. It doesn't matter what happens or how it gets divided, but the South Korean government takes 50%.
I explain myself poorly.
The state getting a 50% cut over total value of assets and money is a no brainer. If one million is left in cash+stocks+bonds+property, 500k goes to the state, although I think it's a bit cloudy when it comes to paying tributation on property.
But a company has - usually - its own legal status. A company by itself is an entity that can not by cut up at will, unless dissolved and reformed under diferent parts.
The company isn't necessarily broken up, but the shares of the company are owned by individuals, and those shares go to the government. To your point, you could keep "the more valuable shares", but the shares are valued in currency by both you and the government, so it's kind of hard to say which are more valuable than others
We all seem to be thinking towards openly traded companies but how small(er) companies would go through such a process?
A traded company is not a head splitter to tax as an inheritance: shares are owned in a given number, there is a given number of heirs, each share has a given publicly tradeable value. Keeping with the Korean example, if there are 100.000 shares to split between two heirs, each heir receives 50.000 shares, which at a spot valuation of $2, implies each heir has to pay $50.000 in taxes, the 50% cut for the state.
I don't really see any logic in the state entering in true possession of company actives when what is due is its monetary value, which can be paid in cash by the heirs.
But a non-traded company will not be as easy to tax because it has no easily measurable value. A father leaving a company with a total social capital of $100.000 to two or three sons can in fact be leaving a company with a lot less true value, after considering loans, assets, values due to pay and receive, etc. And such an entity is not easy to split into equal parts.
Seems like there should be an easy way for any BIG company: a stock split. Any company that has shares, even private shares, can be forced to undergo a stock split of which the government gets half. Boom, government owns half the company. To get more surgical about it, only shares held by the deceased would be split.
Smaller companies don't have such an easy mechanism but it seems to me they would cause less chaos.
Of course, this seems like a colossal incentive to never incorporate in Korea.
Presuming there is such a structure. Non traded companies can have huge values without having a stock structure.
And what is the logic of a government owning a part of a company by default when what really matters is receiving the corresponding liquid monetary value?
There are specific sectors where state must hold objective interests and in some cases even hold complete control but most sectors are more of liability than an asset to a government.
"Capitalism is just human nature."
If it's just human nature, then why do we need a militarized police force to enforce order? Having workers go to a workplace, do labor, and then send the profits to some far away entity that probably isn't even there is actually very far from human nature. It's something that necessarily requires the implied threat of violence to maintain. Same with tenants and landlords. No one would pay rent if it wasn't for the police, who will use violence to throw you out otherwise.
It also frustrates me how that argument just waves away the incredibly complex and actually extremely arbitrary legal structure of capitalism. What about human nature contains limited liability for artificial legal entities controlled by shareholders? "Ah yes, here's the part of the human genome that expresses preferred and common stock; here's the part that contains the innate human desire for quarterly earnings calls."
edit: typo
Its so dumb. "Human nature" according to who? Ignoring that appeal to nature is a logical fallacy its also just...fake. humans are social obligate primates. We naturally form small communal groups. We've interacted cooperatively and altruistically since before we were anatomical humans. If capitalism is human nature why did it take 19,700 years for anatomically modern humans to invent it. Because for one thing, commerce is not the same as capitalism. And even commerce is somewhat recent. Most of human history we didnt barter, pre-money barter economies are a myth. We had "gift economies" where we simply helped and gave each other what we needed. Without explicitly demanding a return but understanding others will help you out the same when you need it.
“Of course the CEO deserves 399 times your pay, they take 399 times the risk!”
"and what is the penalty if they lose that risk?" "Why, they become a labourer like the rest of us!"
But the UnReALiZEd Gains
Honestly their Super Yachts, mansions, and luxury climate bunker compounds should be eligible for section 8 housing subsidy if you think about it.
They have so little liquidity, couldn't you just die?
In the Arms of the Angels plays to images of sad Warren Buffets, Elon Musks, etc...
"They make everything: The wine, the glasses, the chairs, the buildings. Without their investment, none of that could be made."
PU has already compiled the best ones.
The one mentioning the iPhone will long be a favorite.
Wow. Almost every single thing he listed at the beginning (before I turned this off because I was getting the urge to punch his face so strongly my work computer's screen was at actual risk) has taken enormous amounts of "big government" subsidy. And well over half of them (possibly much higher!) are actively damaging society.
Woohoo! Capitalism!
There's something disconcerting about the structure of that person's face and the ways it does and does not move how it should when the person it belongs to speaks.
Not many would do well reading that script.
Argh, I watched two seconds of it. Now YouTube will recommend that stuff to me forever.
Holy shit those comments are as cringey as the video somehow.
It's a wonder the commenters don't drown staring up at the rain with their mouths agape.
You can see the Wilks's oily paw prints all over.
lol it's literally the argument they use
A much better approach is to require all private industry to be cooperatively owned, then replace private lending with a central bank. With this model if people want to start a business they have to run it as a cooperative ensuring that profits are fairly shared amongst all the people working at the business, and that decision making process within the company is democratic. Meanwhile, instead of going to VCs for loans, the company would submit a proposal to the state bank.
Agreed, but eventually someone calls that socialism/communism and we're all back to square one.
Scaremongering about socialism/communism doesn't have the same effect it used to nowadays.
How do you keep the singular state bank from being captured and corrupted inside of 2 years?
Captured and corrupted by whom? Without capitalism, you don't have rich oligarchs running around to corrupt everything. As a real world example, the central bank works fine for over 70 years in USSR.
The USSR was famously corrupt and a massive failure on the overall besides. This is not the example you are looking for.
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this post was submitted on 26 Sep 2023
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