Wealth Taxes Could Kill Privately-Owned Companies
8 hours ago
- In-N-Out Burger has never sold shares or taken outside capital, remaining entirely owned by the Snyder family for 75 years.
- Lynsi Snyder moved to Tennessee and established a second HQ, citing California's difficulty for raising a family.
- California's Proposition 40 would impose a one-time wealth tax of up to 5% on billionaires, sparking debates on economic impact.
- The wealth tax forces founders of illiquid private companies to sell shares, potentially losing control of their businesses.
- Lynsi's ownership of In-N-Out represents control over the company's mission, not just monetary value.
- A wealth tax can transform privately governed institutions into entities driven by shareholder profit maximization.
- The Takings Clause of the Fifth Amendment may protect control rights, but its boundary with taxation is unclear.
- Proposition 40's valuation rules directly target voting control, potentially forcing founders to surrender governance.
- Private companies enable individuals to exercise constitutional rights materially, and wealth taxes threaten this infrastructure of liberty.