The IRS just confiscates an equal percentage of every position they hold
Congrats there are now 3 men who can collaborate to collapse the government by shorting an insane position, have a portion of it seized, and wipe out all government revenue for a year. Sure they’d also be infinitely broke but you just gave them the lever to kill a country.
How would that possibly wipe out all government revenue for a year? The government didn’t have to buy the stock. There is no way they’d be worse off revenue wise than the current situation where there is no tax taken on these held stocks.
So the IRS seizes an option on the shorted position rather than the position itself, which comes due when the position is realized. Or, any liability for a position is assessed back to the investor rather than the government. Or any number of other rules are established to keep the IRS from assuming liability for losses and return them to the investor.
And, of course, the three men who collaborated are charged with securities fraud and conspiracy.
Liquidators would also have rules allowing them to react to market manipulation and other artificial market influences.
Congrats there are now 3 men who can collaborate to collapse the government by shorting an insane position, have a portion of it seized, and wipe out all government revenue for a year. Sure they’d also be infinitely broke but you just gave them the lever to kill a country.
How would that possibly wipe out all government revenue for a year? The government didn’t have to buy the stock. There is no way they’d be worse off revenue wise than the current situation where there is no tax taken on these held stocks.
Position vs stock. Learn to read.
So the IRS seizes an option on the shorted position rather than the position itself, which comes due when the position is realized. Or, any liability for a position is assessed back to the investor rather than the government. Or any number of other rules are established to keep the IRS from assuming liability for losses and return them to the investor.
And, of course, the three men who collaborated are charged with securities fraud and conspiracy.
Liquidators would also have rules allowing them to react to market manipulation and other artificial market influences.