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Buy, Borrow, Die – Explained

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Re: Buy, Borrow, Die – Explained

#291

Post by Beijinger »

Reebz wrote: post #165
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.

Loss aversion is a major factor in behavioural economics that explains why people act this way.

Seems to be an instinct.

A lawyer told me, this is how you scam people. Mainly Medical Doctors. Pitch an investment to them. They don't bite. Then mention, that they will save taxes with this investment, and they will say: Where do I have to sign?

Re: Buy, Borrow, Die – Explained

#292

Post by zb1plus »

nerdponx wrote: post #244
dymk wrote: post #229

Earlier quoted context omitted.

Healthcare, school lunches, diversion programs, research grants

(conts) infrastructure upkeep, managing various natural resources, emergency management, weather reporting/forecasting/research, economic reporting/research... There are so many valuable services provided by the US federal government. People just take it all for granted.

I've always said people should be able to directly allocate where their taxes go within the government expenditures, or be able to file an objection based on religious or philosophical beliefs to having their tax dollars fund morally objectionable things. I would be much happier to pay taxes if they went to funding schools, infrastructure, NASA, emergency management, poverty relief and other useful things instead of putting undocumented immigrants who could be productive members of society in concentration camps or bombing brown people. Furthermore, I am happy to fund particular defense initiatives like supporting Ukraine, but I want a line item veto on unproductive or morally repugnant things the government does.

Re: Buy, Borrow, Die – Explained

#293

Post by [deleted] »

paulryanrogers wrote: post #279
throwaway22032 wrote: post #143

Earlier quoted context omitted.

I think that categorising it as hoarding is a bit of a loaded stance. I own a home and I have assets that I use to pay my daily expenses. I am, by your definition, asset rich. I don't need to "do" anything other than maintain the investments. (I also do work, but that's besides the point). On an intellectual level I realise that if we are to have a public sector it needs to be paid for, and that I'm never going to be…

When the government is us there can be disagreement about what thresholds of taxes and services are best for society. Thinking only individually misses the forest for the trees. Private industry's record is just as messy as that of government. Thankfully voting gives us a voice. Private corporations listen only to share holders. (Unless they have competitors which is increasingly rare.) Yet corporations also get to l…

[deleted]

Re: Buy, Borrow, Die – Explained

#294

Post by hnburnsy »

zkelvin wrote: post #113
xmprt wrote: post #105

Earlier quoted context omitted.

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…

Taxing unrealized capital gains already isn't all that radical -- property tax is effectively a tax on unrealized gains of property value, and essentially every municipality has that tax.

> Taxing unrealized capital gains already isn't all that radical -- property tax is effectively a tax on unrealized gains of property value, and essentially every municipality has that tax.

Property taxes are a use tax (roads, police, fire, schools, etc), apportioned base on property value, it is not a capital gains tax.

Re: Buy, Borrow, Die – Explained

#295

Post by jalapenos »

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.

It puzzles you in spite of knowing that wealthy people are taxed more by default due to progressive tax rates etc?

Re: Buy, Borrow, Die – Explained

#296

Post by vineyardmike »

zb1plus wrote: post #292
nerdponx wrote: post #244

Earlier quoted context omitted.

(conts) infrastructure upkeep, managing various natural resources, emergency management, weather reporting/forecasting/research, economic reporting/research... There are so many valuable services provided by the US federal government. People just take it all for granted.

I've always said people should be able to directly allocate where their taxes go within the government expenditures, or be able to file an objection based on religious or philosophical beliefs to having their tax dollars fund morally objectionable things. I would be much happier to pay taxes if they went to funding schools, infrastructure, NASA, emergency management, poverty relief and other useful things instead of…

> I've always said people should be able to directly allocate where their taxes go within the government expenditures, or be able to file an objection based on religious or philosophical beliefs to having their tax dollars fund morally objectionable things.

Obviously, this was supposed to be the job of the person you elected.

But in 2024 we definitely have the technology to let people vote on smaller units of issues that they care about.

I would be completely in support of people self-allocating their taxes as long as (1) the distribution still had to add up to 100% so you can’t under contribute and (2) government offices capped their income and redistributed excess to the general funds instead of letting some feel-good departments waste money they didn’t need but were allocated.

Re: Buy, Borrow, Die – Explained

#297

Post by johnnyanmac »

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?

Guess it's easy to talk this way as someone who isn't that rich, but if I'm at the point where I have 8 figures accessible, or 7 figures liquid and own all the important assets (house, car, kids' college funds in 523, etc), I don't particularly care what part of my income is being taxed past that point.

My goal isn't to make money for money's sake. Nor even leaving oodles of money to my kids. I'd metaphorically just spend my days strumming a guitar for the rest of my days. The economy is just a distraction from what I really care about.

Re: Buy, Borrow, Die – Explained

#298

Post by johnnyanmac »

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…

Me? No. My goals are fairly simple. Rent is just a distraction from that goal.

Re: Buy, Borrow, Die – Explained

#299

Post by johnnyanmac »

throwaway22032 wrote: post #260
littlestymaar wrote: post #190

Earlier quoted context omitted.

> Most people try to minimize taxes No, most people don't care about their tax the way wealthy people do. I ended up in a wealthy family through marriage and I can tell you nobody I my original social circle spent even a fraction of the effort the wealthy do when it comes to taxes.

It's always funny to read this sort of thing because it's like you're so close to connecting the dots but don't quite get it. Is it not entirely logical that a cohort that actually pays attention to where 20%, 30%, 40% of their money is going ends up wealthier than one that doesn't?

It may be a horshoe (the poor need to manage every peeny, the hyper rich distort society to minmax their riches), but the American Dream died decades ago. You can't just follow some financial wellness workshop to "save money" when you can't barely pay rent as is. Hard works correlation with wealth has decreased dramatically, very quickly

Re: Buy, Borrow, Die – Explained

#300

Post by jandrewrogers »

Rury wrote: post #271
w4 wrote: post #220

Earlier quoted context omitted.

> 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…

I think what you do is simply tax stock ownership. Say you own 100 shares of stock. A 2% tax would mean the government would confiscate 2 of your shares, so you then own 98 shares. The government then proceeds to sell their confiscated shares on the open market (not at once, but spread out over the next year) and use the proceeds as tax revenue. You as an investor can maintain your 100 shares of stock by simply buyin…

This tacitly assumes a pretty naive model of how these markets work. The dynamics of poor liquidity, dead equity, stock restrictions, intangible asset loss, etc materially change the outcomes you can expect. In many cases it may cost the government more than the revenue generated, and the counter-party as well. This doesn’t work like your retirement account. Similar types of scenarios historically created by civil litigation have had many adverse consequences to business in practice.

And property taxes are deductible in the US. I’m not sure where you got the impression they aren’t.

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