How do you know you have over 100m in assets? One never really knows the worth of something until it's sold. (i.e. try selling a used car. there's what you think it's worth and what you get...)
And once the asset is sold, that's a taxable event.
You raise a good point. I found this page from the Norway tax authority. (In a previous post, I noted that Norway had had a wealth tax for a long time. About 1%.)
> When calculating wealth tax, you must include any assets that you own at the end of the year. These assets must generally be valued at what the asset is worth on the open market. However, an exception is made in the case of housing, and a lower value, known as the tax value, must be used when calculating wealth tax.
(1) "assets must generally be valued at what the asset is worth on the open market". I guess there will be GAAP accounting rules about how to value less liquid assets. Tradable securities are easy to value; other things, like artwork are less easy to value. In the case of a car, an accountant could reasonably use an online used car marketplace to find a value. (The US has something called the Kelley Blue Book.)
(2) "an exception is made in the case of housing". It sounds like there is a totally different set of rules for taxing housing (land+building).
So if I don't apply for a loan, I don't get assessed, which means I don't pay taxes? Anyway, the system is not that simple and bank assessment would be trivial to game. People do it now even without taxes on the line...
This doesn't work if the shares have low-to-zero liquidity, similar to housing or land. In environments where it can take days to find a buyer, the price slippage could be more than the tax itself.
Few things are easy. Some problems with your proposal:
1. Assumes the asset in question is publicly traded.
2. Assumes the publicly traded asset has a non trivial amount of trade volume
3. Assumes asset price is relatively stable, moving in a narrow band along a clear trend-line
4. Assumes you have defined the price from the stock information (last trade before close. Daily average, etc)
5. Assumes holder's position is small enough not to affect stock price were they to sell.
And stocks are the easiest to do this with!
Look at the Trump vs NY court case for the value of his house in FL. Unlike the valuation imposed by government fiat, the valuation was agreed to freely by the parties. The courts found it excessive (and it might be) and proposed a valuation so ridiculously low it alone gives Trump grounds to appeal that the judge is either incompetent on the matter or has a personal bias and should anyway have recused himself.
I do believe it was the Mar a Lago, yes. Trump's valuation was eye watering, I still can't believe it, but the market players agreed to it.
The banks agreed to the valuation and under no coercion agreed to lend money with it as collateral. Trump pays off that loan and the banks are made whole.
By contrast my school board telling me my house is worth 600 k instead of 400 k scares the shit out of me. I can't agree to it and my only recourse are the courts. The school board has lawyers on staff so it costs them nothing if I sue.
The courts found it excessive (and it might be) and proposed a valuation so ridiculously low it alone gives Trump grounds to appeal
This is just wrong. The very low valuation was not proposed by the NY court, but by the Palm Beach County tax appraiser. This is because the property is deeded for use as a social club rather than a private residence (a condition of sale when Trump purchased it iirc, and one which affects future disposal of the property) and as a commercial entity the value is appraised as a multiple of business income.
Thing is, under law you are not allowed to falsify information on financial disclosures like this, regardless of whether the counterparty is OK with it or not. It may be that the state considers the integrity of the financial system a higher priority than individual deals, or it may be designed to prevent money laundering - more likely the latter, as there are a lot of ways to clean dirty money if everyone involved is willing to accept some imaginary claims as fact.
The art is very valuable, financially, because people are willing to pay for it.
However, absent the market clearing the asset, its value is impossible to objectively evaluate. Even if we had an objective function to evaluate art the basis of evaluation is incorrect - the artwork is valuable as an instrument of government corruption
So m, if we can't even agree on the reason why Hunter's artwork is worthwhile, how can we even possibly evaluate it?
And once the asset is sold, that's a taxable event.