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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: TigerPaw who wrote (10338)	1/30/2006 9:20:15 PM
From: TimF	Read Replies (1) \| Respond to of 541465

It would be more like a 30 year bond. The idea is that the ownership is not immortal. OK so you not only wouldn't let heirs fully inherit partial ownership in a public corporation you would also take it away from private owners during their lifetime (at least with compensation). People usually don't lose their house in the process of paying their property tax. They do if they don't pay the tax. It would be the same here, if you keep up a steady reinvestment or provide ongoing labor to the enterprise you would be able to maintain an equivalent or increasing number of shares. No it would be very different here. I don't have to buy back parts of my house (either actual physical parts, or just part ownership) because of real-estate taxes. What it would stop is buying a startup as a penny stock and then collecting profits forever if the company is successful. That is more like a lottery than an investment anyway. The lucky purchaser would still make a heck of a return on his investment, it just wouldn't last forever. That enormous possible return is what motivates a lot of investors in ideas that seem like decent but very very risky long term bets. Yes many early investors cash out after a few years, but not all of them, and those who do can sell as high as they can because the ongoing value of the stock includes a fraction of all future potential earnings. If you make it more like a bond you discourage such investment. Very risky long term investments require enormous possible returns. I wonder if such a requirement for public corporations might cause more of them to not list on the stock market and instead say private. The founders or the early investors of the companies might hold on to a company that could be "the next Intel or Microsoft" rather than accepting having their company slowly taken away from them without them getting to decide if they want to sell or control the timing of the sale. Tim