This could never work in practice because it would unfairly penalise founders of small companies whose share value may not be so spectacular.
The principle of paying tax on a notional value (which is what the market share price effectively is) is crazy - as the author points out the value can go down. Who's to say that it doesn't go through the floor at some point, which by his reckoning would allow for you to claim some of the tax back? Talk about volatility - you would want the stock to be massively unstable!
The author suggests that selling stock to pay for a tax bill as a solution - but that sale would also be taxable. Therefore you could never fully pay off your tax bill, and what would happen if you ran out of shares to sell?
I think the rot stems from the practice of lending where shares in public companies are used as security. This is not security at all and should be stopped. The impact would be clear it would force companies to either pay a (taxable) salary to it's founders and directors (like SMEs) or let them sell shares to realise income.
The principle of paying tax on a notional value (which is what the market share price effectively is) is crazy - as the author points out the value can go down. Who's to say that it doesn't go through the floor at some point, which by his reckoning would allow for you to claim some of the tax back? Talk about volatility - you would want the stock to be massively unstable!
The author suggests that selling stock to pay for a tax bill as a solution - but that sale would also be taxable. Therefore you could never fully pay off your tax bill, and what would happen if you ran out of shares to sell?
I think the rot stems from the practice of lending where shares in public companies are used as security. This is not security at all and should be stopped. The impact would be clear it would force companies to either pay a (taxable) salary to it's founders and directors (like SMEs) or let them sell shares to realise income.