At 5:27 PM 9/18/96, Jason Vagner wrote:

On Tue, 17 Sep 1996, Timothy C. May wrote:

...

I've been thinking a lot about the prospects of a "wealth tax," or "asset tax," in the U.S. With the stock market averages at record levels (and, hey, Intel has gone up $6 just so far today, to an unheard of $94.5 level), and with increasing fractions of people's overall net worth tied up in equities, bonds, houses, property, etc., it may be that the looters will take a more serious look at taxing people's overall wealth, e.g., the 5% of net worth per year that some countries have.

Forgive me if this is a stupid question, but could this lead to "engineering" the market at particularly times of the year to decrease the "official" value of an entity's value and complicating the pricing of equities? Would this become a viable means for those with less wealth to capitalize on the momentary "dip" in prices?

Certainly people would look for "loopholes" and mechanisms for reducing their officially-calculated wealth, were such a wealth tax to be implemented. For example, they might find ways to transfer their wealth to trusts, corporations, foundations, etc., and then "use" this wealth by hiring themselves as high-priced consultants, providing "company cars" and "company yachts." (Arguably this already happens, with such corporate perquisites considered part of the compensation package for many highly-paid executives.) As to whether there are schemes for reducing the valuation of equities only at certain times of the year, I can't think of any that would have a significant effect. Deals to sell stock at artificially low prices are frowned upon. As are "parking" schemes. --Tim May We got computers, we're tapping phone lines, I know that that ain't allowed. ---------:---------:---------:---------:---------:---------:---------:---- Timothy C. May | Crypto Anarchy: encryption, digital money, tcmay@got.net 408-728-0152 | anonymous networks, digital pseudonyms, zero W.A.S.T.E.: Corralitos, CA | knowledge, reputations, information markets, Higher Power: 2^1,257,787-1 | black markets, collapse of governments. "National borders aren't even speed bumps on the information superhighway."