But market Cap is not net worth of a company. Net worth is book value, the difference between net tangible assets minus liabilities.
Consumer price growth in July slowed to its lowest post-pandemic level, a sign that the surging inflation that has gripped the U.S. economy is finally ebbing. On a 12-month basis, the Consumer Price Index (CPI) cooled to 2.9%, down from 3% in June — the first time the index dipped beneath 3% since March 2021.7
So you are saying the founder in this case would not be deemed to have any unrealized capital gains? How would you describe the net worth of a founder who has 20 % in a company that got valued at 1 billion, but has no real estate or other meaningful tangible assets and has never turned a profit? Zero?
I asked you once and I'll ask again. Do you want a lesson? I have decided to be generous. I'll give you a discount. Just let me know.
ur using terms you non't understand net worth is the total equity of a company, total assets minus total liabilities. Total assets = total tangible asset + total intangible assets
Here's a lesson on why taxing unrealized gains would be insane. https://www.zerohedge.com/markets/harris-unrealized-gains-tax-would-obliterate-us-economy
I am by no means an expert on accounting on taxes and on this proposal, but it depends on how net worth is defined. In your scenario, market capitalization is not the same. Also, a system where someone like a Peter Thiel was able to accumulate 5BILLION dollar in a Roth account tax free is pretty insane and skewed.
Do you want a lesson or not? I'm offering you a discount. I'm an investment wiz and you're just low riz.
I was referring to the difference between market capitalization of a company and the net worth of a company which is not the same but if I am wrong, I am wrong.
A private market company valuation is the equivalent of a public company's market cap. If you own a certain percentage of whatever the market sees as the value of the company and that is your only asset, then that's your net worth (ON PAPER). And if the market sets a higher valuation and you have not sold any shares, then you have an unrealized gain. There are many people who - on paper - would have crossed the 100m wealth threshold ON PAPER, but have no or almost no liquidity (unless an exit occurs - that's where the tax has to be paid in the current (and any respectable) system). It would be crazy to try and tax someone with no liquidity on a paper gain. Many of these companies still go bankrupt or their valuation goes down massively. Is the idea to punish and bankrupt entrepreneurs for trying to build companies? That's textbook communism, and about as anti traditional American dream as it gets.
I would like to debate this further but I do not have enough about the nuts and bolts of the proposal and the mechanism to determine wealth for it to be productive so I will bow out. You could be right tho.
