161–170 of 504 posts
>Let's assume the asset appreciates at an annual rate of 8 percent Quite a lot of value creation going on. Good on them!
That's like $40K/hr if they take no sick days or time off to go yachting. Their labour must be super important.
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What do you call living to be 90 years old, if not very lucky? Again, luck.
You can do a lot to improve your odds of hitting 90 vs what actuarial tables show. Baseline may only be 15% but a very healthy lifestyle can get close to 50/50 which isn’t some major stroke of luck.
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>the obvious solution (removing the cost basis step-up when assets change hands) Not as simple as it sounds...when you can set up original ownership of an asset into a trust and have control of that trust change hands.
moving the funds into the trust would be a taxable event, so I'm not sure what the problem is.
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> Most people try to minimize taxes. I don’t think this is true. Most people pay more in taxes, and receive the pleasure of a refund check come April.
Even these people try to minimize their taxes so the refund is larger.
It always puzzled me how tax-adverse some wealthy people are. I'm not talking about the wealthy people that have 100% of their wealth tied up to company (stock) that they operate - but the wealthy people that are just asset-rich, with zero operational duties. Their wealth is handled by wealth managers, they probably don't even know what they own. But minimizing taxes and hoarding wealth is priority number 1.
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>Inherited wealth is the least earned Let's be real. No wealth is 'earned'. It's almost entirely luck and social connections. No different from inheritance. Besides, inheritance can be hard work, psychologically. Your parents may be in a very different socioeconomic group than you for most of your adult life. Your baseline expectation for a 'normal' lifestyle is somewhat elevated (due to the lifestyle you experienced…
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> Most people try to minimize taxes. I don’t think this is true. Most people pay more in taxes, and receive the pleasure of a refund check come April.
I think "minimize taxes" is short for "minimize tax liability" and refunds due to overpayment have absolutely nothing to do with that once you've paid enough to avoid penalties and interest (which is only ~90% of your liability).
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Did I say that anywhere?
> Tell that to the kids in Congo who have to dig out Cobalt for free. That's actual reality and it has arrived in the west.
What does this have to do with the concept of someone "earning" something?
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Mmm, I think we're mixing up some numbers here. Let me try to break this down for clarity. Using the numbers in the report, the $17M in taxes would be paid after just 10 years, not 40 years, because the asset appreciated from $50M to $108M in 10 years and the buyer wanted liquidity at that point. After 35 years, the FMV of the asset is $740M, and tax liability would be (740 - 50) * 1/(20 + 3.8 + 5) = $198.72M So, the…
The idea that anyone is getting a 0.5% interest rate for anything —let alone with collateral of a risky asset—when treasuries are at 4%+ is fanciful, and makes me lean strongly in the direction of the LARPer theory.
Anyway, I bet at that level of loan the customer has a lot more power; no lender is going to want a billionaire to do their business elsewhere. The human lender who signs the loan gets a promotion for increasing the bank's future-money. And if it goes sour, that human won't lose money. Even the bank doesn't need to worry about its existence if it will be bailed out by the tax payer anyway.
It always puzzled me how tax-adverse some wealthy people are. I'm not talking about the wealthy people that have 100% of their wealth tied up to company (stock) that they operate - but the wealthy people that are just asset-rich, with zero operational duties. Their wealth is handled by wealth managers, they probably don't even know what they own. But minimizing taxes and hoarding wealth is priority number 1.
edit: Hoarding is buying assets that could be used productively and storing them somewhere instead of using them. People with a political axe to grind like taking words with negative connotations and applying them to things that don't make sense to manipulate you.
If you think about it for more than two seconds you will understand we already have a word that describes someone with a lot of assets, "wealthy" or "rich". So hoarding as a term only makes sense when used in the context of someone stockpiling something that could be used by people in need. "Hoarding" shares in a company does not make sense for example.