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The richest people borrow against their stock (2021)

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

#331

Post by mcculley »

next_xibalba wrote: post #329
mcculley wrote: post #268

Earlier quoted context omitted.

Certainly some parents are proponents of the estate tax. I did not say that all parents are opposed to it.

You have projected your bias onto my comment. I do not advocate for an estate tax and don't necessarily support it. And claiming that opposition to an estate tax is an opposition to the success of other people's children is also definitely not anything I believe or claim. Our economy is not zero sum. Everyone can win. Also, redistributive policies almost always fail and waste vast sums while failing.

I did not argue in favor of redistributive policies. If I am arguing anything, it is against people lying to themselves about their ideology.

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

#332

Post by chgs »

yzydserd wrote: post #281
chgs wrote: post #276

Earlier quoted context omitted.

But honest day’s work income has an additional payroll tax which totals about 20% marginal for the majority of people (plot about 60/40 between employer and employee). Far better to be paid in shares.

Oh yes National Insurance Contributions. They’re a bit messed up imho. The employee pays 8% to NICS on earnings between 12.5 and 50k. For income over 50k, it’s 2%. The employer pays 13.8%, and some people assert the employee ultimately pays the cost through a lower salary.

Well at my company it comes from the same budget. Doesn’t matter how you hide it.

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

#333

Post by cryptonector »

chii wrote: post #318
cryptonector wrote: post #237

Earlier quoted context omitted.

Let's say you're worth $100bn. You don't need to spend $1bn a year, just even a few tens of $ millions will be plenty, so you're borrowing a minute portion of your net worth. And your stocks will be going up in value, typically, so... you'll never run out of money. Plus you'll be a great customer for the banks that lend you money, so you'll get preferential interest rates. You'll never run out of money. You'll die an…

> You'll die and still have the lion's share of your wealth and i don't see anything wrong with that at all. It seems, recently at least, that a lot of people believe they're somehow entitled to the wealth that these high networth individuals have managed to accumulate.

> and i don't see anything wrong with that at all.

Read my comments on that post. I never said there was anything wrong with that.

IMO we should stop double taxing dividend income.

> a lot of people believe they're somehow entitled to the wealth that

Do not count me among those.

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

#334

Post by lifeisstillgood »

eadmund wrote: post #330
lifeisstillgood wrote: post #328

Earlier quoted context omitted.

(Probably a bit late to the conversation but whatever) > You have gained income from your capital at this point. Let’s say Jeff Bezos wants to buy a yacht. He has 1 million amazon shares worth 1 cent when he started and now worth 100 dollars. So he can sell the shares to get 100 million dollars and buy the yacht. But he has to pay 10% capital gains. Or he can borrow 100 million from any bank and they will accept the…

> Or he can borrow 100 million from any bank and they will accept the shares as collateral. He does not pay capital gains at this point Nope, but when he does sell those shares, he will (except for the step-up in basis rule on death). And he has to make payments on the loan, which has to come either from income (which is taxed), sales of capital (which is taxed) or other loans (which will then be paid off with money…

If I understand “step up in basis” this is where Jeff Bezos never sells his shares, dies and leaves his shares to his son for example. The (US) tax law then “steps up” the value of shares - so instead of saying the shares were orignally worth 1 cent each and now with 100 dollars each, they are treated as being worth 100 dollars when the son gets them and so he has to pay no capital gains. I think I over simplify.

And you suggest eliminating that is a good idea.

I agree - but suggest we don’t have to wait till Jeff dies - there are other taxable “liquidity events” that are freely entered into and do not rely on third party valuations, and that achieve the goal of (the Modern Monetary Theory goal) of taxing and so eliminating money.

And yes the loan is a liability - but under current tax law (which is some version of buy, borrow, die) the wealth remains untaxed or under-taxed, kind of defeating the point of governments printing the money.

In short we want wealth to circulate not congregate.

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

#335

Post by listenallyall »

gnepon wrote: post #326
refurb wrote: post #323

Earlier quoted context omitted.

There is no objective definition of fairness. That’s your definition By your definition if someone works 40 hours, after taxes they should have the same amount as someone who worked 20 hours. That doesn’t seem fair to me

This is the kind of extreme internet Libertarianism that's dangerous in the real world. Not practical or concerned with extreme poverty through inequality, but preferring to fight on first principles, like all tax being theft (not your claim, but equatable). I'm less concerned about the definition of fairness and more concerned about real human suffering.

> more concerned about real human suffering.

Then your priorities are misdirected. The US Govt grabbing a few extra percent of billionaires' income would not reduce human suffering in any way.

If anything, the ultra-rich have been far more effective than governments at improving impoverished human lives by setting up charities and using them to directly send money to poor regions around the world, enabling clean water and food and basic health services.

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

#336

Post by dennis_jeeves2 »

WA wrote: post #179
refurb wrote: post #159

Earlier quoted context omitted.

Bezos has paid $1.5B and Musk over $12B in taxes according to Google.

Please stop counting taxes of super-rich in absolute terms. It simply doesn't matter. We need percentage-based taxes to get the real picture. Because those numbers seems a rounding error given their wealth.

>percentage-based taxes

Why is percentage better than absolute or vice versa?

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

#337

Post by dennis_jeeves2 »

toenail wrote: post #112
janalsncm wrote: post #96

Earlier quoted context omitted.

The fact that we can tax houses, the main form of wealth for most people, proves that wealth taxes (levied on other forms of wealth) would be just fine.

Why have taxes at all if the government can just print money?

It gives the appearance that the government is doing something useful. If the government just printed money the peasants would start revolting.

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

#338

Post by refurb »

gnepon wrote: post #326
refurb wrote: post #323

Earlier quoted context omitted.

There is no objective definition of fairness. That’s your definition By your definition if someone works 40 hours, after taxes they should have the same amount as someone who worked 20 hours. That doesn’t seem fair to me

This is the kind of extreme internet Libertarianism that's dangerous in the real world. Not practical or concerned with extreme poverty through inequality, but preferring to fight on first principles, like all tax being theft (not your claim, but equatable). I'm less concerned about the definition of fairness and more concerned about real human suffering.

> This is the kind of extreme internet Libertarianism that's dangerous in the real world.

Saying there is no objective definition of fairness and then calling out the unfairness in your idea is "extreme internet Libertarianism"?

No, it's just common sense.

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

#339

Post by dang »

aassddffasdf wrote: post #104
bdangubic wrote: post #71

Earlier quoted context omitted.

The fact is though if you live in America are paying property taxes on your home, you are NOT hiding from the IRS the fact that you do - you are not saying "sorry, I don't really own this home and I won't be paying anything to you until such later time when my ownership will be revealed at the grand sale at which point I'll pay some taxes" With "unrealized" stock gains you are doing just that - hiding ownership so yo…

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

#340

Post by dang »

zooq_ai wrote: post #26
bdangubic wrote: post #7

Earlier quoted context omitted.

> If you own stocks, your brokerage will lend you money at a very low rate, secured by the equity - typically up to about half of your stocks' worth. This should be illegal of course... You cannot for the purposes of paying taxes say "hey, I don't actually have this money, this is unrealized gains" and then turn around (to brokerage house or anyone else) and say "hey, look I actually do have this 'money' - lemme borr…

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