Dan Gillmor

An astoundingly innumerate comment from someone who should know better. https://mastodon.social/@rbreich@masto.ai/109689872733190141

Musk didn't "lose $200 billion" when the value of his stock plummeted. His theoretical wealth dropped.

There should be a wealth tax nonetheless (and capital gains should be regular income, with investment gains indexed for inflation when cashed in).

But we should be honest about what we're doing.

Jan 14, 2023 at 10:27pmWeb
Show threadSilversaltyJan 14, 2023
@dangillmor
I think most people understood the point. If Musk had sold his Tesla stock earlier he could have bought stock in a car company that wasn't Ponzi scheme value based. His choice.
Show threadTheAnymouseProphetJan 14, 2023

@dangillmor
If you use "theoretical value" to secure financing then that "theoretical value" should be taxed.

Real enough to borrow against, real enough to be taxed.

Show threadJohn GordonJan 14, 2023

@SocialJusticeHeals @dangillmor

Although to borrow against unrealized assets the loan must be repaid with real assets. So it’s a form of credit score calculation.

But to Dan’s point, Reich certainly knows better.

Show threadTheAnymouseProphetJan 14, 2023

@dangillmor
Let me put it to you another way. The middle class couple that is kind enough to rent me a room below local market value, last year they added solar and increased insulation.

Even though housing is a volatile market, it added value and their property tax went up. They are being taxed for a gain that isn't realized or even paid for.

Why shouldn't the wealthy also be taxed for gains that aren't yet realized?

Show threadTheAnymouseProphetJan 14, 2023

@dangillmor
I know people forced to sell because they couldn't keep up with property taxes.

Perhaps if the wealthy had to pay taxes on their stock gains, the stocks would stay closer to real value rather than spike in speculative bubbles that then burst and harm small investors.

Show threadDan GillmorJan 14, 2023
@SocialJusticeHeals Property taxes are a mess, I agree.
Show threadJohn GordonJan 14, 2023

@dangillmor @SocialJusticeHeals

Property values are far less volatile than stocks and we aren’t taxed on home value in 5y — but it is the closest thing to a tax on shares. It’s still pretty distant though.

Show threadPhilip N CohenJan 14, 2023
@dangillmor in that case I think all wealth is theoretical wealth
Show threadDan GillmorJan 14, 2023
@philipncohen In a sense, sure. But cash is usable right now and only subject to a drop in value via inflation, which takes a fair amount of time (except in some places in somewhat rare circumstances). Holdings that can go to zero in a year or so, or drop precipitously, are much more theoretical.
Show threadBrianJan 14, 2023
@dangillmor
In what way is stock ownership theoretical?
Show threadDan GillmorJan 14, 2023
@brian It isn't. The value is only real when you sell.
Show threadBrianJan 14, 2023
@dangillmor
Stocks are as real as a bank account.
Show threadDan GillmorJan 14, 2023
@brian Name a stock that can't lose value (apart from inflation)...
Show threadBrianJan 15, 2023
@@dangillmor
Name a currency that can't lose value? If you invest in something and it loses value, you have lost money. You can't argue that it's a "paper loss" or some nonsense, it's a real loss. Maybe you're thinking about illiquid options or something, but stocks can be bought and sold in minutes
Show threadChristopher SmithJan 14, 2023
@dangillmor I mean, when people start someone "lost $X" in their investment, this is what they mean. This didn't seem misleading.
Show threadDan GillmorJan 14, 2023
@cbsmith Yes, when people say this, they're incorrect. But they've been mis-educated, so it's understandable.
Show threadChristopher SmithJan 14, 2023
@dangillmor It's not ignorance; it's short hand.
Show threadceolnJan 15, 2023

@dangillmor
There are no "correct" uses of words like "lose" and "wealth" here, that make it "innumerate" or otherwise wrong to say that he lost $200 billion.

No one thinks that he had that much in a bank vault in cash, and had to give it back. :)

It's entirely reasonable to describe a $N drop in "theoretical wealth" as "losing $N".

I don't really understand the vehemence that some people put into this kind of claim. (Except when they say that some billionaire isn't "really rich" because their wealth is mostly in stock. I gather you aren't doing that here.)