Modeling a Wealth Tax
19 hours ago
- A wealth tax applied repeatedly over decades can consume a significant portion of a successful startup founder's stock, with a 1% tax taking 45% over 60 years.
- Even with a high threshold of $50 million, a 2% wealth tax still takes about 65% of a founder's stock, showing the compounding effect of such taxes.
- Wealth taxes are more impactful than income taxes because they tax the same asset each year, compounding over time, while income taxes apply only to annual income.