“Amazon.com Inc. held its initial public offering (IPO) on the Nasdaq on May 15, 1997, at a price of $18 per share. $10,000 invested on that day and price would be worth more than $12 million as of May 2020.”
Suppose you inherited that $10,000.00 from your working class parents in 1996 and put it all into Amazon. Are you now rich? If so, and I think you are, then what shall we do with you and your wealth? You still live in the same old 1200 square foot house you also inherited from your parents in ’96, you drive a used Honda, you drink Budweiser, not Imported Belgian Ale, you cook and eat at home, and you buy your clothes at Target, all as countenanced by “The Millionaire Next Door.” You earn $50,000 per year as an assistant manager at an auto parts store.
What case can be made that you, who “saw your wealth soar” in the last 25 years (you plutocrat, you), should be taxed on your wealth? I’m okay with a tax on the dividends, assuming Amazon pays dividends, and I should know but can’t check right now.
You are King For a Day. What would you do? Keep in mind that, after you pay the tax on the value of your portfolio, the stock could drop precipitously. Amazon has a lot of intrinsic value, so I can’t see it ever dropping to zero. I can see it dropping by 35%, however.
If the stock is more speculative and volatile, like GameStop, it can indeed drop to zero. After you pay the tax. You could even get a second tax bill if the second tax year ends before the stock goes to zero.