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The richest people borrow against their stock (2021)

forbes.com

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Re: The richest people borrow against their stock (2021)

#241

Post by orionsbelt »

vel0city wrote: post #218
scotty79 wrote: post #180

Earlier quoted context omitted.

What you tax is not really relevant as long as it doesn't disrupt some activity you want to continue happening. If it was up to me I'd tax spending not income. Regardless of what you are spending on. Bread? Sure! Employee? Yes! 10% of Tesla? Same!

> If it was up to me I'd tax spending not income. Regardless of what you are spending on Under this system the poor who spend the majority of their income just to survive pay the highest effective tax rate while the wealthier who save most of their income have the smallest effective tax rate. That sounds like a fair and equitable system to you?

Sure, you can have transfers back to the poor.

Re: The richest people borrow against their stock (2021)

#242

Post by PopAlongKid »

JumpCrisscross wrote: post #75
blast wrote: post #64

Earlier quoted context omitted.

> At that point your stocks (and other assets like houses) have their cost-basis adjusted to the current price. Is this a special provision that kicks in only on death (and not before)? How long has that been in place?

> Is this a special provision that kicks in only on death To my knowledge, yes [1]. [1] https://en.wikipedia.org/wiki/Stepped-up_basis > How long has that been in place? Since 1921 [1]. When the estate tax was in force, it was meant to avoid double taxation. In 1976, the Congress replaced the step-up basis with a carryover basis (you don't pay taxes on death but neither do you step up the basis). In 1980, it repealed…

The Wikipedia article does a poor job of explaining that it is not "step up basis", it is "basis adjustment to fair market value", which may be up or down. They do have a paragraph further down about "stepped down basis", but it still doesn't make the point clear.

Re: The richest people borrow against their stock (2021)

#243

Post by vel0city »

orionsbelt wrote: post #241
vel0city wrote: post #218

Earlier quoted context omitted.

> If it was up to me I'd tax spending not income. Regardless of what you are spending on Under this system the poor who spend the majority of their income just to survive pay the highest effective tax rate while the wealthier who save most of their income have the smallest effective tax rate. That sounds like a fair and equitable system to you?

Sure, you can have transfers back to the poor.

You're just moving the point a little along the scale though. So now instead of the super poor paying a higher rate, now it's the slightly less poor. And the slightly less poor as you keep moving that transfer cutoff point. You're still going to have some point where the wealthier are paying a significantly lower rate than those who make a good bit less than them.

Re: The richest people borrow against their stock (2021)

#244

Post by cryptonector »

WA wrote: post #211
mherrmann wrote: post #205

Earlier quoted context omitted.

I think it does matter. Let's assume Musk paid $12B. How much have you paid? Isn't it then actually reasonable to say that he contributed more than you to the country, even if his tax percentage is lower than yours?

What do you gain by talking about absolute numbers? They are meaningless. By this logic, Musk could pay only $1 million in tax and still would've "contributed more to the country" than most individuals. If you talk about taxes percentage-wise, you make clear that the super-rich do not pay their fair share, that they will get richer faster than everybody else and, the most important fact, that long-term stability migh…

> If you talk about taxes percentage-wise, you make clear that the super-rich do not pay their fair share

Well, this is partisan / ideological stuff at this point. I'm only pointing out that the super rich can get away with paying very little in income and capital gains taxes. What's a fair share for the super-rich really depends a great deal on how they got rich (with corporate welfare?) and how much value they have added to the country and the world. And what the tax code should do about it is yet another story. I'm not even remotely advocating for some unrealized capital gains tax or, really, anything of the sort. If anything I think what's unfair and unwise here is that dividends get taxed as income twice (once at the corporation, once where received), which incentivizes reinvesting so as to grow a company's valuation [so as to grow its owners' net worth]. We might have more rich-but-much-less-rich people if we didn't double-tax dividends, and that would [probably] ameliorate the balance of power in the country.

Re: The richest people borrow against their stock (2021)

#245

Post by vel0city »

JumpCrisscross wrote: post #238
vel0city wrote: post #217

Earlier quoted context omitted.

So much stuff has several layers of taxes on it but "double taxation" is really only used when discussing inheritance taxes. It's a term wealthy people made up to trick poor people into feeling sorry for ultra wealthy actually paying taxes on things.

> "double taxation" is really only used when discussing inheritance taxes It’s a common concept, e.g. in the double taxation of corporate earnings and dividends.

You're right, its pretty common for the wealthy to try and trick poor people into feeling sorry for the wealthy actually paying taxes on things.

As my other post pointed out, tons of things have multiple layers of taxes. But the things people suddenly have some big moral issue with "double taxation" are things like estate taxes and corporate earnings and dividends and capital gains.

Few people bat an eye at us double taxing the low income nicotine addict. Everyone seems to want me to shed tears for the billionaire having to pay "double taxation" on their third vacation mansion they're inheriting.

Argue the rates are too low or too high for a given transaction. I can get behind that. But just crying because there's two different taxes being applied to a given transaction? Really?

Re: The richest people borrow against their stock (2021)

#246

Post by JumpCrisscross »

vel0city wrote: post #245
JumpCrisscross wrote: post #238

Earlier quoted context omitted.

> "double taxation" is really only used when discussing inheritance taxes It’s a common concept, e.g. in the double taxation of corporate earnings and dividends.

You're right, its pretty common for the wealthy to try and trick poor people into feeling sorry for the wealthy actually paying taxes on things. As my other post pointed out, tons of things have multiple layers of taxes. But the things people suddenly have some big moral issue with "double taxation" are things like estate taxes and corporate earnings and dividends and capital gains. Few people bat an eye at us double…

> people suddenly have some big moral issue with "double taxation" are things like estate taxes and corporate earnings and dividends and capital gains

People get plenty mad about sales taxes double taxing taxed income, too. Nobody likes paying taxes.

This isn’t a localised term.

Re: The richest people borrow against their stock (2021)

#247

Post by SideQuark »

Anyone can borrow against their own assets: house, car, stocks, cash holdings, 401k, even their expected earnings (e.g., college loans). They can even borrow against nothing as far as they're trusted (e.g., credit cards).

None of this is special to any class or income level.

News at 11.

Re: The richest people borrow against their stock (2021)

#248

Post by scotty79 »

vel0city wrote: post #218
scotty79 wrote: post #180

Earlier quoted context omitted.

What you tax is not really relevant as long as it doesn't disrupt some activity you want to continue happening. If it was up to me I'd tax spending not income. Regardless of what you are spending on. Bread? Sure! Employee? Yes! 10% of Tesla? Same!

> If it was up to me I'd tax spending not income. Regardless of what you are spending on Under this system the poor who spend the majority of their income just to survive pay the highest effective tax rate while the wealthier who save most of their income have the smallest effective tax rate. That sounds like a fair and equitable system to you?

And yet the rich spend vastly more money than poor. You can see it trivially by noticing that the poor have all their money from the work that they do for the rich.

Taxing spending would be way more equitable than whatever we are now doing.

We are already doing some taxation of spending. VAT, sales tax, social security fees. All of those are paid by buyers of goods, services and labor. If we did the same for investments government would have so much more money to deal with the problems instead of borrowing it from commercial banks at interest.

Re: The richest people borrow against their stock (2021)

#249

Post by scotty79 »

vel0city wrote: post #243
orionsbelt wrote: post #241

Earlier quoted context omitted.

Sure, you can have transfers back to the poor.

You're just moving the point a little along the scale though. So now instead of the super poor paying a higher rate, now it's the slightly less poor. And the slightly less poor as you keep moving that transfer cutoff point. You're still going to have some point where the wealthier are paying a significantly lower rate than those who make a good bit less than them.

At appropriate level of transfers the cutoff point is at millionaires you no longer can call poor in good conscience.

And people below cutoff point thanks to transfer effectively pay negative tax.

Re: The richest people borrow against their stock (2021)

#250

Post by vel0city »

JumpCrisscross wrote: post #246
vel0city wrote: post #245

Earlier quoted context omitted.

You're right, its pretty common for the wealthy to try and trick poor people into feeling sorry for the wealthy actually paying taxes on things. As my other post pointed out, tons of things have multiple layers of taxes. But the things people suddenly have some big moral issue with "double taxation" are things like estate taxes and corporate earnings and dividends and capital gains. Few people bat an eye at us double…

> people suddenly have some big moral issue with "double taxation" are things like estate taxes and corporate earnings and dividends and capital gains People get plenty mad about sales taxes double taxing taxed income, too. Nobody likes paying taxes. This isn’t a localised term.

> People get plenty mad about sales taxes double taxing taxed income, too.

Yeah, and it's a dumb position to take. Like what, we can only apply one tax from one source to a given dollar bill's serial number after it leaves the fed, and after that point that dollar can never be taxed again? Otherwise, gasp, double taxation!

The company shouldn't pay payroll taxes, they charged sales taxes to get that income to pay the salaries. I shouldn't pay any income taxes, the company paid payroll taxes on the money that had sales taxes on it. I shouldn't pay sales taxes, I paid income taxes on the money that had already had payroll taxes that had already had sales taxes that had...

Suddenly nobody pays any taxes anywhere because somewhere up the chain someone else already paid taxes on that dollar!

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