> It doesn’t apply to shares held by hedge funds like KKR, nor to corporate investors like Tencent and Sony.
If that's the case, then what prevents billionaires like him from creating "Tim Sweeney angel fund LLC" and have that entity retain control of Epic?
Then since this entity is private, couldn't it defer that tax at the time it sells the entity?
With the whole deferred tax scheme that applies to assets not traded on an exchange, i.e. a "deferral charge meant to replicate interest payments on taxes that went unpaid each year, together totalling a tax capped at 49%" as described in https://www.rollcall.com/2021/10/27/wyden-details-proposed-t...
Surprisingly, tax schemes invented at the last minute to thread the needle with a couple of moderate senators and a Byzantine reconciliation process are not typically well thought-out!
Indeed, whatever conditions there are on this tax, will become the new standard conditions all sufficiently wealthy people will have their accountants arrange their finances to satisfy in order to be excluded.
LLC are discarded entities for tax purposes so no change there. The reason it’s not an issue for hedge funds is ownership is split among many non billionaire owners. As opposed to llcs, setting up a shell corporation for stock holdings would lead to accumulated earnings tax. I think you will see some asset hiding as always but the obvious solution is the Peter Thiel billion dollar Roth IRA trick. Assuming roths are excluded I mean.
Because his shares on "Tim Sweeney angel fund LLC" would appreciate every year and he'd have to pay the same taxes on unrealized gains.
The only way to avoid this is being a foreigner.
Effectively, what they'll accomplish with this tax is either:
1) Letting only foreign billionaires control American companies; or
2) Force American entrepreneurs to waive their citizenship (which, in practice, is #1).
So, yeah, it seems these politicians are either blind or are legislating against American entrepreneurship, in favor of foreign billionaires.
If that's the case, then what prevents billionaires like him from creating "Tim Sweeney angel fund LLC" and have that entity retain control of Epic?
Then since this entity is private, couldn't it defer that tax at the time it sells the entity?
With the whole deferred tax scheme that applies to assets not traded on an exchange, i.e. a "deferral charge meant to replicate interest payments on taxes that went unpaid each year, together totalling a tax capped at 49%" as described in https://www.rollcall.com/2021/10/27/wyden-details-proposed-t...