It likely posed an appreciable risk to his business ventures that CA at some point will try to tax unrecognized capital gains,
People like Musk leverage their paper wealth into real (risky) loans and the like to support their business ventures (and personal lives)--part of the "socialize risk, privatize profits" model of pseudo-capitalism they practice.
A thoughtless approach to taxing unrecognized gains is not a good idea, but I certainly understand why it might be considered, at least for some minimum threshold. There's already something like this in the way some stock options are handled: individuals are taxed at exercise on the difference between the FMV and the strike price, whether they sell or not. I don't see why a similar principal couldn't be made to work with actual equities, at least for some high-value accounts/holdings.
Socializing what risk? What are you even talking about? Musk put his entire fortune from PayPal on the line for Tesla knowing that in all probability it would fail. It turned out well for him but it was still a huge risk he took.
I would argue that the opposite is true. California wants a larger cut of profits from business activity within their borders without any risk on their part, or even having to provide better services than competing states.
>> Musk put his entire fortune from PayPal on the line for Tesla knowing that in all probability it would fail. It turned out well for him but it was still a huge risk he took.
For sure Elon Musk is a very smart guy and he works really hard and he knows how to deliver amazing products and his PR skills are amazing... That said, we can't deny that he got a lot of support from the US government. Without US government help (e.g. subsidies, grants, carbon credits), he probably would have failed flat on his face like all other geniuses. His ability to secure government support had more to do with luck (history and social connections) than skill.
So as great as Elon Musk is, he did socialize a lot of his risk.
> For sure Elon Musk is a very smart guy and he works really hard and he knows how to deliver amazing products and his PR skills are amazing...
And again, don't ignore the part where he used his entire PayPal fortune to build a company that he thought had a high probability of failure. That's key to this conversation about risk.
The government chose to take on the risk of providing subsidies in order to get the benefits it enjoys today due to Musk's efforts, which is a growing electric vehicle industry. That wasn't Musk's choice to socialize risk, it was elected officials'. And that choice has paid off well for everyone.
> Government officials didn't risk anything, they risked other people's money
Government has its own accounts, therefore it has its own money to spend. It doesn't matter that they get that money from taxpayers, it belongs to the government by law.
> leverage over politicians
What leverage over politicians was used and what objectives did it achieve? Please give specific examples. AFAIK, the EV credits were designed to get more EVs on the road to reduce pollution and were successful at doing that. They are also not limited to Tesla.
> hoarding attention
What does that mean? You're complaining that people write articles about Musk?
Why does taking private loans against his private assets count as socializing risk? The banks he gets these loans from understand the risk and do not represent "society".
If you mean 2008, yeah, you're right, but those were mostly loans to relatively low income people buying homes, not loans against billionaires' unrealized capital gains.
People like Musk leverage their paper wealth into real (risky) loans and the like to support their business ventures (and personal lives)--part of the "socialize risk, privatize profits" model of pseudo-capitalism they practice.
A thoughtless approach to taxing unrecognized gains is not a good idea, but I certainly understand why it might be considered, at least for some minimum threshold. There's already something like this in the way some stock options are handled: individuals are taxed at exercise on the difference between the FMV and the strike price, whether they sell or not. I don't see why a similar principal couldn't be made to work with actual equities, at least for some high-value accounts/holdings.