Wealth taxes on tech titans risk undermining markets built on future promise
The world has its first trillionaire, though some Zimbabweans might claim they got there first (“Elon Musk’s wealth equals 72% of all SA tax collected since 1997″, June 15).
What must it be like to have a personal balance sheet worth more than $1-trillion? One certainty is that politicians will see it as a vast pot of money waiting to be transferred to the public purse. But what, exactly, is the wealth they propose to tax?
In 1920, company wealth comprised railways, steel mills, oil wells and factories. Today it increasingly consists of software, algorithms, networks and brands. When markets value technology companies such as SpaceX they are not simply pricing the assets. They are pricing expectations: future innovation, future earnings and, crucially, the founder’s continuing commitment to creating them. Investors value founder-led companies because the founder’s incentives remain closely aligned with their own.
Suppose Musk were required to pay an annual wealth tax based on that valuation. The cash is not sitting in his bank account; it can only be raised by selling shares. Yet each forced sale reduces the founder’s ownership and, potentially, the alignment of incentives investors relied upon in the first place. A recurring wealth tax risks eroding the very assumptions on which the whole edifice rests.
Markets are remarkably good at placing a present value on tomorrow’s possibilities. However, governments can only collect tax from today’s cash. Confusing the two may make for attractive politics, but it is poor economics.
Neil Emerick
Free Market Foundation
Democracy questioned as UK faces leadership transition amid rhetorical politics
UK prime minister Sir Keir Starmer’s likely replacement, Andy Burnham, was elected mayor of Manchester and a Labour MP by the accepted democratic process ― people voted for him (“Keir Starmer — the man with no plan — quits as UK prime minister after two years“, June 22).
The discussion whether he should be handed the keys to 10 Downing Street simply because he’s a nice guy and won a by-election by a healthy margin is absurd. Politics is a contest of ideas.
Apart from the usual platitudes and cliches, Burnham’s philosophy is still largely rhetoric and his ability in high office unknown. The British public should hear his proposals and contrast them against the other contenders before parliament votes on the matter. It’s called democracy.
Bernard Benson
Parklands
US-Iran peace deal leaves Israel isolated and tensions high in the Middle East
As American reactions confirm, the US memorandum of understanding (MOU) with Iran is seen as abject surrender.
It happened because US President Donald Trump now understands that if the Strait of Hormuz remains closed the imminent exhaustion of the US strategic oil reserve will result not only in a midterm election disaster at home but also a global recession.
Wriggling on a hook of his own making, Trump decided not to include the instigator of this war, Israel, in the peace negotiations. Israel is now outside the tent threatening to burn the whole of Lebanon while refusing to withdraw its forces, a primary requirement of the MOU. It is also using both the Jewish lobby and the Christian Zionists to put maximum pressure on the US.
Despite the disastrous state of Israel’s economy, the destruction of the Israeli Defense Forces and the damage caused to Haifa and Tel Aviv, the regime doesn’t want peace. It is infected with a particularly noxious Zionist ideology, first identified by the Romans.
In AD 70 the Romans destroyed the Jerusalem temple, followed by a difficult siege of Masada to stamp it out. It has been argued that Titus and his Jewish partner, Berenice, concocted a more moderate Jewish cult attempting to leach the poison and bring peace to the empire.
That genie has once again escaped, only this time it is armed with the most destructive weapons known to humanity, with a plan for using it known as the Samson doctrine. As Prime Minister Benjamin Netanyahu recently made clear, “surrendering” to Iran is not an option.
In 1917, when the British cabinet discussed the draft of a letter to Lord Rothschild known as the Balfour Declaration, which declared its support for a future Jewish state, only one member, Edwin Montagu, was opposed. He was Jewish and understood the dangers of Zionism. What could happen now is a nightmare beyond even his imagining.
James Cunningham
Camps Bay
Historic fears of Zionism resurface as Israel faces external and internal threats
Why are so many commentators calling for Israel to “take action” to rescue the US-Iran peace deal? It was produced by America, Iran and a group of Islamic states (“An imperfect but hopeful Middle East peace deal”, June 18).
Israel was not included and cannot be dictated to after the fact. If the US and Iran wanted Israel’s involvement they would have invited it in.
Israel is a sovereign nation. It has its own agenda, which includes eliminating the Hamas and Hezbollah terrorists who committed heinous war crimes against its people and are still attacking it daily.
US vice-president JD Vance and others dragging Israel into the discussion is intended to set Israel up to be blamed if the US-Iran deal fails. It is beneath the values Judeo-Christian Western democracies are based upon.
Jacques Fortier
Montreal
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