Microsoft chief executive Satya Nadella sold about half his Microsoft shares. The shares he sold were worth about $285 million, the Wall Street Journal reports based on an SEC filing. "Analysts said the move could be related to Washington state instituting a 7% tax for long-term capital gains beginning at the start of next year for anything exceeding $250,000 a year," the Journal says.
If even the prospect of a state tax change triggers this significant a move, imagine the effect of a new tax on unrealized capital gains on the model of the Biden-Wyden Wealth Tax or even of Biden's Plan To Double the Capital Gains Tax. Is it really good for America to push management to have less of an ownership stake in companies that they run, so that their personal incentives are less aligned with those of the rest of the shareholders? Do Democrats really think they can impose such a tax without triggering huge sales in advance of the taxes being imposed? Or are they planning to try to make such taxes retroactive so as to avoid Nadella-like behavior? Another executive whose business is at least partially based in Washington state, Jeff Bezos, reportedly sold about $6.7 billion of Amazon stock in May and another $3.3 billion or so in November. Maybe Bezos also figures he'd possibly save the 7 percent tax. Seven percent of $10 billion is $700 million, which is a lot of tax money to save, even for someone like Bezos.