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The Most Effective Way to Tax Wealth: the IN-KIND Method
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this post was submitted on 01 Mar 2025
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Degrowth
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There’s a lot of talk about how taxing share grants and stock options potentially harms innovation, as it impacts startup employees. Startup doesn’t have enough cash to attract top tier employees, so they’re offered stock grants as part of compensation which is fair enough. But if they’re taxed, and the stocks are illiquid (pre IPO), the employee is going to end up paying a whole bunch of tax on something that might, in the future, be worth a certain amount.
Collecting the taxes in-kind is a simple and incredibly obvious solution now that I see it.
A sales tax disproportionately impacts people who are lower income, as a greater percentage of their earnings go towards purchasing essential goods - and defining exclusions for sales taxes is a whole exercise. Food, easy; heat, ok. But what if i heat with electricity and also drive with electricity? Should clothes be taxed? Where do we draw the line on what constitutes luxury clothing when people buy carhartt for very different reasons depending on their income source. What about diapers, people choose to buy disposables. Condoms? Period products are a shoe-in but what about cups or reusable panties?
I don’t hate the idea, but it is complex. Like most tax schemes…