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Eric Schmidt To Sell Up To 42% of Stake In Google
derGoldstein writes "AllThingsD reports that Eric Schmidt 'plans to sell up to 3.2 million shares of his class A common stock in the company,' according to an SEC filing. 'The amount is equal to approximately 42.1 percent of his overall stake in Google.'"
I doubt this has anything to do with any bad news
for Google. It is my guess Schmidt just wants the
money here and now. Totally understandable.
Or we could have a better incremental tax system where dirt poor is not the bottom and fat rich is not the top.
> Increasing wealth at one pole, increasing misery at the other.
This has nothing to do with capitalism. This has to do with the government raising taxes aimed at the middle class since the rich can move and the poor can't pay. Decade after decade the middle class shrinks while prices go up, taxes go up and the government becomes like a pimp managing tired older whores.
When both political parties give the government's ATM card to lobbies and spend trillions on what they think will get them elected again it appears that there is no hope.
There is only one solution: become rich or become poor.
lucm, indeed.
Here's a hypothesis:
Google beat the last challenge from the antitrust attorneys from Texas, but it can't count on the future.
Specifically, other states or federal entities could attack it, and then there's all of the EU, which traditionally takes a harder line on privacy violation and monopoly.
Schmidt is no dummy and so he's divesting a reasonable amount (less than half) of his stock to hedge against a potential catastrophic future decline.
Remember what happened to Microsoft. They basically floundered hard after an assault by the department of justice. If the same happens to Google, they'll have to put most of their plans on hold for a decade as well.
Futurist Traditionalism
It's news for a reason. It seems unlikely he is strapped for cash, and as he's acting Executive Chairman of Google, a significant stock sale has to mean he's convinced the market capitalization for his Outfit has peaked. Often, if you look way up ahead in the distance, you can just make out the Captain running ahead of all those rats.
Happiness in intelligent people is the rarest thing I know.
Ernest Hemingway
capitol gains tax post fiscal cliff is about 23.5% IIRC...If he had done this in December, it would have been about 15%...If you factor the marginal income tax rate that most people pay, the average federal income tax comes out to about 18-21% based on actual household income (for normal households of say 30k - about 2500 k)
The real benny comes in with no SS or Medicare taxation.
Yes, because there's no poverty or starvation in Marxist countries at all right?
Except that US taxes have been trending down for 30 years, and wages have not kept up with inflation.
Actually, there's a third solution. You may not have thought of it.
If wealth condensation were an unstoppable force, it would have run to completion thousands of years ago and there would never have been a middle class in all of recorded history. Clearly there is some counteracting force. Something which we haven't since... let's say 1945.
Yes, because there's no poverty or starvation in Marxist countries at all right?
Nah. It is just that in Marxism, everyone is equally poor.
morcego
Careful with the vagueness there. That's 42% of his stake in Google, not to be confused with 42% of the company's stock.
Nah. It is just that in Marxism, everyone is equally poor.
The choice isn't necessarily between extreme capitalism and extreme socialism...
Socialism to the point where people don't starve, can start over after failing and are given a decent chance to go to university, isn't so expensive that hard work won't be profitable anymore.
(Socialism to that extend, does however, encourage risk taking, as there's a system to help you if you fail).
It's often called liberal socialism, many/most countries in Europe (especially northern Europe) are quite successful with this approach.
In Europe taxes are spent largely on public works, public health, and public services, so taxes are not a net loss for citizens but contribute directly to their welfare and to the smooth running of society for the man in the street.
The difference in the US isn't so much in the rate of taxation, but what is done with your tax dollars. They're not spent for the social good to any large degree, but fund the huge military complex and benefit the rich more than the poor. (Here the rich pay much more tax than anyone else.)
The US "misery" problem to which you refer is much more deeply rooted than could be solved by changing the rate of taxation. It can't. Your society is structured to create misery.
Federal Income Tax is down - almost every other tax has increased. Local wage taxes, state income taxes, sales taxes, property taxes... It took the recent financial crisis to knock us back down to 1970s levels, but expect that to ramp back up as the economy recovers. Just prior to the financial crisis, we were at an all-time high for total tax burden as a percentage of GDP.
Got my numbers here.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
It's because the math is confusing. They compute the pay they get divided by the hours they work and try to compare that figure to the same statistic for a capitalist. They get in trouble when they attempt to divide by zero...
I am not exactly sure what insider trading is, but since he not only knows the inner workings of Google but controls them, how is this not insider trading?
It *IS* insider trading. Any CEO selling their own stock is insider trading. That is why the SEC requires documentation and a public disclosure of any potential transaction before the sale happens, which is what the linked document is. The SEC cannot prohibit such sales, but they do put them under extremely tight restrictions - such as preventing such sales near the end of a quarter, when financial results are known internally but not yet released.
It is important to note that this does not mean that Eric *is* going to sell 42% of his stake, it means that he is now *allowed* to sell *up to* 42% of the stock. Many such filings end up with a smaller amount sold.
All trades of stock by that corporation's officers are "insider trading;" the question would be whether it's illegal insider trading. In a nutshell, if he knows about something that the public doesn't and trades based on that knowledge, it's illegal. (Although the Zynga guys seem to be getting away with it so far.) Since he's such a large shareholder, anything he does is going to have some effect on the price, so it's hard to say whether he sold because he knew it was about to drop or it dropped because he sold.
I'm getting a price for GOOG of $785. That's $2,512,000,000 of literal cash under the mattress. IT's not that GOOG is a particularly risky stock, but money in the bank is more or less zero-risk; putting enough away to live like a king for the rest of your days certainly seems to me the absolutely perfect retirement strategy.
Facts do not cease to exist because they are ignored. - Aldous Huxley
Excellent post.
For finer detail you notice that Schmidt has file a “plan” to sell 2.4b over the next year. That plan gets handed over to a 3rd outside party so Schmidt is removed from the timing and execution of said plan. So, at this point everybody on a level playing field.
People will argue that these are two solutions. But just like the two-party system where there is no real option and thus for all things real, this is only one option.
A bit like the option if you want your left knee or your right knee broken. The people doing it say you have a choice, but for those in real life there is no option.
If things do not change, there will be some sort of revolution. Not sure if it can be compared of trowing the red jackets out, beheading the aristocracy or by strikes. I know it will be bloody. I know it will be temporary as after a while you need to redo it.
Not so much a question about if, but about when. It could happen anytime now or 50 years in the future. The start could be somebody not wanting to sit in the back of the bus. It could be somebody trowing tea in the river. It could be one kid killed by the Fingerman, uh, TSA. It probably will be something else.
It will be a random act that will be the last drip, but it will happen.
Don't fight for your country, if your country does not fight for you.
A middle class as we know it is a fairly recent phenomenon, probably starting in the Netherlands in the 17th century.
xkcd is not in the sudoers file. This incident will be reported.
This is a good idea, except it would probably be easily abused by "splitting companies" into smaller ones. Having progressive taxrates where the marginal rate below the median national income is close to 0% and rises quickly above that would be my solution. While you do want to incentivize working harder, if you make it impossible for the poor to work hard and get ahead, what is the point. Also, inheritance tax!
One big problem with our tax system is that it taxes work far more than wealth. Tax rates on earned income are high, taxes on dividends and capital gains are low. So a very high-paid individual (think good actors, sports figures, etc.) who may bring in $10 million of annual earned income gets taxed at ~50%, while someone who collects $10 million in dividends annually gets taxes at 15%. And the larger tax on work extends way down into middle class incomes, where it constrains people much more than it does my hypothetical high earned-income worker.
I would like to try it the other way around for a bit, or at least bring the two rates nearer one another. Haven't the time to push the numbers, but I wonder what the revenue implications would be if we taxes earned income, dividends, and cap gains all at 25%. There's probably a more balanced mix of rates that would bring in plenty of revenue and ease the disproportionate tax burden on work.
That graph doesn't agree with what you said. Our all time high was in 1944 (94%), and we haven't been anywhere near that in a very long time. We're currently at 33%, which is a huge difference, although that is only tracking the very top tier of income tax. Also, that graph isn't very useful. If we added a new tax tier that said anyone making more than 1 trillion dollars a year would get taxed at 94%, the graph would show 94% at the highest tier, but no one would ever be in that tax bracket, so that number is useless.
For finer detail you notice that Schmidt has file a âoeplanâ to sell 2.4b over the next year. That plan gets handed over to a 3rd outside party so Schmidt is removed from the timing and execution of said plan. So, at this point everybody on a level playing field.
One game executives can play is to have several "plans" at any one time.
These plans can be suspended and resumed as needed, in order to match actions to the stock price.
It lets them use their insider knowledge and deflect scrutiny by saying "look, I have a plan approved by the SEC!"
[Fuck Beta]
o0t!
The market economy is a tool, not a way of life. Beyond a certain point, monetary rewards do not cause people to aspire to be more productive, so what's the point in letting that wealth accumulate in their hands? Power? You can have a tax system that is far more progressive than it is today while still rewarding hard work.
You want to incentivize paying your employees better but without eliminating the ability to pay executives great money.
All employees that actually do anything, are on fixed, and very inflexible salary. It's ersatz sales drones and arrogant executives, that get any variations.
Contrary to the popular belief, there indeed is no God.