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Buy, Borrow, Die – Explained

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Re: Buy, Borrow, Die – Explained

#211

Post by barbazoo »

TrackerFF wrote: post #85

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.

Greed is hard to imagine for me, I don’t know what motivates those people.

It’s so strange that this behaviour seems to be worshipped by so many people.

Why would we do that as a society? Do we need people that hord anything for profit, do they add value to your group?

Re: Buy, Borrow, Die – Explained

#212

Post by syngrog66 »

For anyone who thinks "$80k is not a lot of money" or that it is well spent on a mere logo then I invite you to send me even a small fraction of that amount. Just $10k would move the needle here immensely. Heck $1k would move the needle.

I can receive funds via CashApp at: https://cash.app/$mk2022akmar/

Re: Buy, Borrow, Die – Explained

#213

Post by SergeAx »

> Let's assume the asset appreciates at an annual rate of 8 percent.

Easy peasy. You going to the asset shop and buying there a brand new shiny asset, which will appreciate 8 percent for the next 30-40 years. This is a great plan. Swiss watch.

Re: Buy, Borrow, Die – Explained

#214

Post by santoshalper »

gruez wrote: post #147
lokar wrote: post #132

Earlier quoted context omitted.

It’s more than tax minimization. It’s buying politicians and distorting society so they pay less.

> It’s buying politicians and distorting society so they pay less. If you had the time and resources, wouldn't you try to affect change in government? It's not fundamentally any different than showing up to your city council meeting to get housing developments approved/blocked, for instance. Moreover, most people don't think of themselves as bad people, so they probably legitimately think they're doing the Right Thin…

Definitely not.

Re: Buy, Borrow, Die – Explained

#215

Post by barbazoo »

SoftTalker wrote: post #95
TrackerFF wrote: post #85

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.

Why does this puzzle you? It seems like completely expected behavior to me. Most people try to minimize taxes. Who do you know that gladly pays more than they legally have to pay?

At some point in my life I took a step back to look at my life and how I’m doing and how much I pay for that life. Maybe I’m just incredibly lucky.

My conservative expectation is that we all have to start contributing a lot more over the next few decades if we want to maintain our standard of living, otherwise it will just gradually get worse. I hope I’m wrong.

Re: Buy, Borrow, Die – Explained

#216

Post by manquer »

SergeAx wrote: post #213

> Let's assume the asset appreciates at an annual rate of 8 percent. Easy peasy. You going to the asset shop and buying there a brand new shiny asset, which will appreciate 8 percent for the next 30-40 years. This is a great plan. Swiss watch.

The return % is hardly important to what author is saying here. You can assume 4% and still get to 200M in 35 years.

Does 200M or 750M make any difference to the point ?

Re: Buy, Borrow, Die – Explained

#217

Post by treyd »

barbazoo wrote: post #215
SoftTalker wrote: post #95

Earlier quoted context omitted.

Why does this puzzle you? It seems like completely expected behavior to me. Most people try to minimize taxes. Who do you know that gladly pays more than they legally have to pay?

At some point in my life I took a step back to look at my life and how I’m doing and how much I pay for that life. Maybe I’m just incredibly lucky. My conservative expectation is that we all have to start contributing a lot more over the next few decades if we want to maintain our standard of living, otherwise it will just gradually get worse. I hope I’m wrong.

> otherwise it will just gradually get worse.

The austerity policies of the neoliberal turn has already caused standards of living among the less fortunate to drop over the last few decades already. The 2008 crisis is when it started to impact the middle class and we're still feeling the impacts 16+ years later.

Re: Buy, Borrow, Die – Explained

#218

Post by [deleted] »

barbazoo wrote: post #215
SoftTalker wrote: post #95

Earlier quoted context omitted.

Why does this puzzle you? It seems like completely expected behavior to me. Most people try to minimize taxes. Who do you know that gladly pays more than they legally have to pay?

At some point in my life I took a step back to look at my life and how I’m doing and how much I pay for that life. Maybe I’m just incredibly lucky. My conservative expectation is that we all have to start contributing a lot more over the next few decades if we want to maintain our standard of living, otherwise it will just gradually get worse. I hope I’m wrong.

[deleted]

Re: Buy, Borrow, Die – Explained

#219

Post by hollerith »

barbazoo wrote: post #215
SoftTalker wrote: post #95

Earlier quoted context omitted.

Why does this puzzle you? It seems like completely expected behavior to me. Most people try to minimize taxes. Who do you know that gladly pays more than they legally have to pay?

At some point in my life I took a step back to look at my life and how I’m doing and how much I pay for that life. Maybe I’m just incredibly lucky. My conservative expectation is that we all have to start contributing a lot more over the next few decades if we want to maintain our standard of living, otherwise it will just gradually get worse. I hope I’m wrong.

What would the government spend the additional tax revenue on, in your conservative expection?

Re: Buy, Borrow, Die – Explained

#220

Post by w4 »

xmprt wrote: post #105
bhauer wrote: post #51

Earlier quoted context omitted.

The step-up in cost basis on death is the original sin that underpins the entire debate over unrealized gains. It's disheartening to see so much thought and deliberation going into an obviously toxic idea (taxing unrealized gains) when the obvious solution (removing the cost basis step-up when assets change hands) is being ignored. Inherited wealth is the least earned, so it should be politically palatable to change…

This might be unpopular but I think there are ways that taxing unrealized capital gains could work without being super radical. 1. Allow unrealized losses to be deducted. 2. Once a certain percentage of the gain is taxed, step up the cost basis by the amount of tax paid. That way you avoid double taxation (once under the unrealized value and again when the asset is sold). 3. (optional) Keep the tax rate on unrealized…

> 1. Allow unrealized losses to be deducted.

This seemed really reasonable to me until I started thinking about how it might work in practice. The sequence of returns can make this proposal ineffective in practice, even if it makes sense on first blush.

By way of explanation: Let's say you're the founder of Pets.com in an alternate universe where unrealized gains have always been taxed (and correspondingly unrealized losses can be deducted). It's 2000, and you've just had an incredible run. You have also paid incredible taxes along the way.

Then your company blows up and goes to zero.

Now you've payed an incredible amount of taxes on your paper gains, and have realized no gains whatsoever. So the entire enterprise only resulted in an enormous real loss to you. Sure you can now carry forward those losses, but so what? You're never going to make up the difference, unless we're also letting your heirs carry forward those losses into the next century or two.

Given the exposure to massive tax bills without any actual profits, who in their right mind would start or invest in a business under that tax code? Who would dare invest a large portion of their personal worth in public equities given the risk that they plummet, as they did in 2022, 2020, 2008, 2001, 2000, 1987, 1962, 1929, 1907, etc.? Who would take a gamble on a big real estate development? And so on.

It seems to me that a tax on unrealized gains massively disincentivizes investment and the creation of anything new, and therefore the only way to tax capital gains that makes sense is if we calculate the tax due based on when chips are taken off the table. Issues like Buy, Borrow, Die are better addressed with other changes to the tax code that undo the weird incentivizes presently in place (e.g. eliminating the step-up basis, possibly at some threshold if the goal is to make the tax code more progressive). Unless, that is, your goal is to actively disincentivize entrepreneurship and investment. Which if it is, I guess fair enough, but then none of us should be surprised to find ourselves with a lower standard of living in a decade as a result.

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