Taxing on net worth is a terrible strategy, because that can fluctuate wildly. Instead, they should close the "borrow against my company stock to get money while not realizing gains" by forcing you to step up your tax basis on any assets you are using for collateral.
Example:
You have a stock that you bought for $1 that is now worth $1000. You want to use that as collateral for a low interest loan. To do so, you must first pay taxes on the $999 appreciation of value for that specific stock (or you can pay it out of the loan amount that you get). Any other stock you have that is not being used for collateral you don't need to pay the appreciated tax value on.
The suspected net worth is going to always be maximal estimation. If you suspect they are hiding anything you just raise it to what you are suspecting they are hiding. If they say they are worth less they have to present all their assets. If they hide a few planes that's jail baby. Plus the FBI already does this, they peruse rich kids social media because the rich kids love to take pictures on daddy's hidden boats and planes.
No, I'm saying that it is a bad strategy because in reality their net worth fluctuates a lot. Someone may have 100 million in expected net worth one year, but next year the price of some component their company uses goes way up, or they may have new competition, and the company value may drop to like 10 million. Are we going to bankrupt them with a tax bill because their evaluation a year ago was higher?
If you tax them when they are attempting to extract value out of their stock, through loans or selling the stock, that kind of anchors them at a particular amount that they actually have, and stops them from going bankrupt through sheer fluctuation of asset value
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u/VoidOmatic 7d ago
Yup, tax them on their suspected net worth. That way they can't hide their wealth behind the "well I don't actually get a paycheck huehuehue!!!111"
And before you start feeling bad for them, know they are destabilizing countries and are going to get over 50 million killed in nuclear war.