481–490 of 504 posts
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It's nuts that we treat LTCG and income differently. We should adjust LTCG for inflation and then charge the amortized taxes whenever folks realize gains. "but then taxes would be too high!" yes, so we should also reduce income taxes when we do this. Quit flogging the upper-middle class to pay for the technically unemployed rich.
Take it a step further and just remove income tax and tax wealth at rest.
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Given American anti tax sentiment, it isn’t surprising. Plus there is a concerted effort to maintain the narrative that the government should be starved, because the government is the most wasteful body that can be. Being rich isn’t just some sort of statistical metric - it’s also a clear cut option to have your principles and desires accommodated. It’s not hard to believe. To determine whether its 60-40 (tax avoidan…
Being wealthy unlocks the option to not be a rational actor with little or no real world consequences, enabling capricious urges and whim to be a significant factor in the decision making process. See: Elon musk.
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> They would go so far as to pick a materially worse deal that allowed them to pay no taxes, over a higher payout that required some taxes paid. I find that hard to believe. I highly suspect that the "materially worse" deal you speak of is simply less liquid cash, but more retained wealth.
As a poor person who doesn't fully own his own house but pays in taxes 60% of their income, and much of the rest in house loan interest and principal, I can see how that would play in my own case. If I were to come up onto a lump sum of money by, say, some creative endeavor of mine, and that money is going to be taxed at a 65% tax (such is the law in Sweden for income taxes), I might consider to do a number of things…
The fantassy that one can pay for wellfare by only taxing the rich more or by reducing their loopholes is a pipedream.
Or you could have a society with very low taxes and very low to none social programs, especially if your government doesn't love fighting expensive wars all the time.
Wars and wellfare programs are all very expensive. Even miserly wellfare programs like what the US got is creating some real debt default risk over there.
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https://news.ycombinator.com/item?id=41410835
That doesn't sound like the lifetime loans that the supposed $2,500 an hour "private wealth attorney at an international law firm" was talking about. In his story, the loans are at .5% - 3% and only payable decades later upon death (though the firm would supposedly also get a share of earnings increase). This sounds like normal SBLOC (Securities-Based Lines of Credit).
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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.
It’s 0.5% plus a portion of the asset appreciation, not just 0.5%
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Ok, so now the costs are the servicing of the loan for 40 years, and paying some percent of the appreciation. Is there any indication that this would be cheaper than just paying the $17M in taxes?
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…
I don't understand what's in it for the lender in the borrow stage.
Yeah, I felt like the “you have to be wealthy” hand-waving in the quoted section wasn’t very explanatory. Are lenders giving the ultra-rich great interest rates here as a loss-leader to try to attract other business from them? > First, this type of planning is generally not economically feasible unless the taxpayer has a net worth exceeding around $300M. If you’re worth less than that, you’re not going to be able to…
Banks and investment firms are not allowed to loan money out privately for less than the AFS, which is 3.72% right now: https://www.investopedia.com/terms/a/applicablefederalrate.a...
The entire post reads like a LARP.
If this is accurate, it finally explains something I've been asking about for years: The loan is paid back after the step-up in basis. That's the loophole. If the loan was paid back before step-up, the estate would still have to pay capital gains tax.
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I’d argue it’s still about marginal utility, but you’re talking about second order marginal utility. That is, by increasing the amount of wealth that’s locked up in equities, you’re “funding progress”. I would still posit that the second order marginal utility of those 20 cents is higher in hands of somebody who needs it. In the same way you talk about how that 20 cents impacts the derivative of “progress”, think abo…
> I would still posit that the second order marginal utility of those 20 cents is higher in hands of somebody who needs it. In the same way you talk about how that 20 cents impacts the derivative of “progress”, think about how those 20 cents would impact the derivative of the people it’s redistributed to. The innovation that happens because people build companies and technologies that they go on to sell in public mar…
I made no reference to UBI. I don't think UBI is a solution to the system of poverty. But we don't need to go there.
There are ways to redistribute wealth that are less direct than SNAP and UBI. The public education system, our transportation infrastructure, the funding of basic research (which contributed to the transistor, modern vaccines, and modern passenger air travel).
There is a whole spectrum of investment between "give a man a fish" and "fund the construction of a competitive industry of privately-owned fish farms to feed people fish"; and it's worth understanding why we're often presented with the false choice between them, instead of the options in between. It's not because the one on the right is most efficient.