If I sell my house, there's a reasonable expected range of money I can expect for it.
If a majority stock holder in a company sells all of their stock, the price first the first share sold is likely going to be completely different (and substantially less!) than the last share sold.
"It's difficult to accurately value" isn't an argument against taxing net worth. It's like the old (likely apocryphal) Winston Churchill joke, "We already established what type of woman you are, now we are just haggling over price". Just take whatever the proposal is, cut in half, quarter, or whatever fraction you want and you no longer have an argument against it.
Personally my favorite idea for this stuff that I have heard thrown around is to allow people to self value everything. However, that self valuation then becomes a price tag. Let a billionaire's accountants put their own evaluation on their equity in a business. But that becomes a binding offer and some other billionaire could come along and buy them out at that valuation. That creates pricing pressure in both directions, the person is prevented from underpricing their assets due to the threat of another buyer coming in and a person is prevented from overpricing because it increases their taxes. And suddenly all the problems regarding how the government appraises these things disappears.
Forcing people to write a call option on their property without an offsetting risk premium only sounds like a good idea if you neither understand the implications nor the math. Asset values would collapse because risk would go to the moon.
And that ignores that it trivially enables large-scale exploitation and looting by construction.
>without an offsetting risk premium
Once again, this is simply haggling over price. Name the premium you think is justified and add that into the law.
The market determines the risk, not the asset owner. The owner has no special knowledge of what the risk actually is separate from the market pricing it. You explicitly want them to accurately price it outside of a market, which is effectively impossible, ignoring that the price is highly fluid and dynamic.
If the owner is required to invent a fake risk premium then it virtually guarantees that the risk will be mis-priced. Forced rampant mis-pricing is an exploitable arbitrage opportunity of epic proportions. Every quant worth a damn will make a fortune looting this. No serious policy can ignore this defect. It has the additional political downside that no one can ever own anything anymore in a meaningful way, which won’t be popular.
No one takes this idea seriously because anyone with a modicum of finance math background can see that the math doesn’t math. Political ideology doesn’t even figure into it.
I don't get it. What if the person doesn't want to sell at all? Self-value at +inf and pay 1% of that?
Society has already decided that we can compel people to sell their private property for fair compensation via eminent domain. Plus getting the assets in the hands of people who value them more certainly creates utility and presumably increases the tax base via further development.
This type of forced sale happens all the time with public companies. For example, only like 60% of Twitter shareholders approved the sale to Musk, but the other 40% were forced to go along with it regardless of their preference. If Musk can do that to other people, why should some hypothetically richer person not be able to do it to Musk?
And to repeat myself for a third time, we don't need to haggle over price. If we only want this to apply to billionaires, assets worth $50 million, or whatever, that's fine. If one of the people impacted truly doesn't want to sell, let them set the price as high as makes them feel safe. I'm not going to lose any sleep over taxing the emotional desires of billionaires.
> For example, only like 60% of Twitter shareholders approved the sale to Musk, but the other 40% were forced to go along with it regardless of their preference
They signed up to that, though. Tagalonpg/dragalong rights are priced into the share price. That's not the same thing.