1076
trickle not (lemmy.ml)
submitted 9 months ago by to c/microblogmemes@lemmy.world
83 comments fedilink hide all child comments
 
you are viewing a single comment's thread
view the rest of the comments
[–] 37 points 9 months ago (43 children)

His tax rate isn't related to his net worth, though. He didn't get a check for $59b.

You don't pay taxes on unrealized gains from investment vehicles, which is a good thing for the average person. Imagine having to pay a (mostly) perpetually increasing income tax on your 401k every year.

What needs to happen is the loans that banks give them against their non-liquid assets should be taxed as income.

  • permalink
  • fedilink
  • source
  • hideshow 43 child comments
    •
  • [–] 45 points 9 months ago (12 children)

    Nah, let’s tax them as realized gains, because if you are using your unrealized gains as collateral, is that not a form of realizing their value?

    I don’t care TBH, whichever one costs them more.

  • permalink
  • fedilink
  • source
  • parent
  • hideshow 12 child comments
    •
  • [–] 10 points 9 months ago (11 children)

    That's basically the same as taxing the loans as income, but I'm down to double tax them.

  • permalink
  • fedilink
  • source
  • parent
  • hideshow 11 child comments
    •
  • [–] 13 points 9 months ago (10 children)

    I don't think so. Just trigger a tax event on anything used as collateral for a loan.

  • permalink
  • fedilink
  • source
  • parent
  • hideshow 10 child comments
    •
  • [–] 5 points 9 months ago (3 children)

    That doesn’t work. Houses are already taxed to hell, even unrealized gains on a house is taxed. So triple taxing when you use a house as collateral would hurt small business owners.

  • permalink
  • fedilink
  • source
  • parent
  • hideshow 3 child comments
    •
  • [–] 1 point 9 months ago (2 children)

    But it's not extra taxing, it's just triggering a tax event so realized gain is taxed at that moment instead of some time in the future, which for the billionaires is never.

  • permalink
  • fedilink
  • source
  • parent
  • hideshow 2 child comments
    •
  • [–] 1 point 9 months ago (1 child)

    It is triple tax. You pay tax when you buy the house, you pay yearly tax of the unrealized gain of the increase in your property value. On top of that you want to add a tax when you use property as collateral so in this case a house which small business owners frequently do.

    Everyone needs to pay their fair share of taxes. Get rid of deductions for corporations and people with revenue/earnings over a certain amount, say 500k. We need to stop complicating the tax code because that is why there are so many loopholes.

  • permalink
  • fedilink
  • source
  • parent
  • hideshow 1 child comment
    •
  • [–] 1 point 9 months ago

    I'm in Canada, maybe it's different. You pay sales tax on a new house when you buy it, just like any purchase. Theres also land transfer taxes an other fees. When it goes up in value and you sell, you pay capital gains (unless it's your principal residence, and then there's an exemption). But until you sell or some other tax event, you don't pay any tax on its increased value until such a tax event happened. At that point it's assessed and you owe any tax on the gain. So if a tax event triggers some tax owing (like if using it as collateral triggered this), then later when you sell, you wouldn't pay on that gain again, only on any gain since the last tax event.

  • permalink
  • fedilink
  • source
  • parent
  • [–] 0 points 9 months ago (5 children)

    The value of the collateral would equal the value of the loan, though. It's effectively the same thing.

  • permalink
  • fedilink
  • source
  • parent
  • hideshow 5 child comments
    •
  • [–] 3 points 9 months ago (1 child)

    There is certainly some careful wording there that more intelligent people than us need to be writing. Both of you make sense, but I’m sure there would be ways to weasel out of one or the other. Something like “this or that, whichever is greater” would be a good start.

  • permalink
  • fedilink
  • source
  • parent
  • hideshow 1 child comment
    •
  • [–] 2 points 9 months ago

    Exactly the point. If the collateral is the same value as the loan, then the increase in value of the collateral is realized. Unless of course they're valuing the collateral at the original value, when first obtained.

  • permalink
  • fedilink
  • source
  • parent
  • [–] 24 points 9 months ago (3 children)

    If only there was a way to make sure the tax isn't levied on normal people... Oh well.

  • permalink
  • fedilink
  • source
  • parent
  • hideshow 3 child comments
    •
  • [–] 6 points 9 months ago (2 children)

    The problem with taxing unrealized gains is that the value is always changing. It's not real money.

    You'd have to pick a point in time to capture the stock/asset value, and the wealthy would just tank the value right before.

  • permalink
  • fedilink
  • source
  • parent
  • hideshow 2 child comments
    •
  • [–] 4 points 9 months ago*

    You’d have to pick a point in time to capture the stock/asset value

    You mean like the bank does when they loan the money?

    The loan shouldn't be able to be disbursed without realized gains/capital behind it, and they can't tank the value without impacting their loan.

  • permalink
  • fedilink
  • source
  • parent
  • [–] 8 points 9 months ago

    We absolutely pay taxes on unrealized gains. Property tax is the tax of unrealized gains. We do it for houses why can’t we do it for stocks? He’s getting dividend checks worth moillions every quarter.

  • permalink
  • fedilink
  • source
  • parent
  • [–] 5 points 9 months ago (3 children)

    Just tax wealth at twice the rate of inflation above 500 million dollars.

  • permalink
  • fedilink
  • source
  • parent
  • hideshow 3 child comments
    •
  • [–] 4 points 9 months ago (2 children)

    Above 2 million, maybe. Hell, make it 10 million for fun but holy shit do not let someone with 400 million pretend they aren’t disgustingly rich parasites.

  • permalink
  • fedilink
  • source
  • parent
  • hideshow 2 child comments
    •
  • [–] 3 points 9 months ago (1 child)

    The difference between someone worth 100 million and someone worth 100 billion is about 100 billion. But yeah finding a good point to set a limit is hard.

  • permalink
  • fedilink
  • source
  • parent
  • hideshow 1 child comment
    •
  • [–] 2 points 9 months ago

    It might be hard but I think buddy coulda done better than half a billion. We seriously need to stop low-balling our own shit, and hell we need to stop with the “offers” as if we can’t just make laws. It’s insane that we’re like this.

  • permalink
  • fedilink
  • source
  • parent
  • [–] 1 point 9 months ago

    You don’t pay taxes on unrealized gains from investment vehicles

    That's the problem.

    Imagine having to pay a (mostly) perpetually increasing income tax on your 401k every year.

    That's why a nuanced, well thought out tax plan is necessary. The average person doesn't have extra money to pay even more taxes. Billionaires do. That's the fundamental difference

  • permalink
  • fedilink
  • source
  • parent
  • [–] 1 point 9 months ago (1 child)

    Tax their net worth. The tax should be progressive, so that beyond a certain value, they can't get any richer even if their investment give high yields. Starting bracket can be 50M, 100M$, at this scale it doesn't matter much.

  • permalink
  • fedilink
  • source
  • parent
  • hideshow 1 child comment
    •
  • [–] 1 point 9 months ago

    The problem is to do that you'll have to capture the value of all of their assets at a specific point in time. This would require them knowing about it, so they could tank the value before.

    But, when they put it up for collateral, they're saying the assets are worth the amount of the loan, so it should be treated as a realized gain.

  • permalink
  • fedilink
  • source
  • parent
  • [–] 1 point 9 months ago (2 children)

    I suggest some other things need to happen to him.

  • permalink
  • fedilink
  • source
  • parent
  • hideshow 2 child comments
    •
  • [–] 0 points 9 months ago* (last edited 9 months ago) (10 children)

    What needs to happen is the loans that banks give them against their non-liquid assets should be taxed as income.

    But loans aren't income. You have to pay them back.

    Pretending a loan is income and in turn taxing it as such, just because the 'wrong thing' was used as collateral, is nonsensically-arbitrary, I think.

    P.S. Home equity loans are also 'loans against non-liquid assets'.

  • permalink
  • fedilink
  • source
  • parent
  • hideshow 10 child comments
    •
  • [–] 2 points 9 months ago* (2 children)

    Pretending a loan is income and in turn taxing it as such, just because the ‘wrong thing’ was used as collateral, is nonsensically-arbitrary, I think.

    Why not make a law against using unrealized capital gains as loan collateral? Or just force 'realization' of the capital at loan time, and they can pay the taxes on that. A home equity loan is against real property, so it wouldn't be subject to the same issue.

  • permalink
  • fedilink
  • source
  • parent
  • hideshow 2 child comments
    •
  • [–] 1 point 9 months ago (1 child)

    Why not make a law against using unrealized capital gains as loan collateral?

    Because that would outlaw home equity loans, for one thing. Anything you own that's increased in value since you started owning it is "unrealized capital gains" by definition, until/unless you sell it, not just stocks.

    The fact is, taking a loan out using stuff you own as collateral, regardless of what it is, is a perfectly normal thing to do that in itself deprives no one of anything. Lenders aren't in the business of throwing money out the window—they make these loans because they get repaid, and then some. Someone who takes out a home equity loan and uses the money to renovate their house so that it'll sell for an increased price beyond the loan amount + the interest rate, is making the exact same 'move' as someone who takes a loan out using their stock in a company as collateral, and uses that money to do things that make that stock increase in value beyond the loan amount + the interest rate.

  • permalink
  • fedilink
  • source
  • parent
  • hideshow 1 child comment
    •
  • [–] 2 points 9 months ago

    Not the previous poster, but you're of correct of course. The issue is that when multi-billionaires can get loans at nearly 0% because if their ridiculous "unrealized" wealth and then claim "nope, no income here" despite their "unrealized" wealth increasing significantly, there is clearly a big problem and needs a solutions.

    I am sure there could be some nuance used in any restrictions against said loans or tax against said weath. Someone before used a "$50 million" value as a good starting point, and at first glance that seems reasonable. Hell, you could easily make that number ten times higher and still cover most of the worst offenders. As long as there is an upper ceiling that stops these wanna be wealth hoarding dragons it's a good start.

  • permalink
  • fedilink
  • source
  • parent
  • [–] 2 points 9 months ago (2 children)

    Cmon, we can describe this process to discuss why it’s wrong, we can’t codify it into law that if you borrow against unrealized gains for the purpose of providing yourself a liquid income, you’re realizing the gains and must pay a tax on it?

    People don’t take out home equity loans to spend on groceries, maids, or yachts. They spend it on improving or repairing their home. The purpose is the asset.

  • permalink
  • fedilink
  • source
  • parent
  • hideshow 2 child comments
    •
  • [–] 4 points 9 months ago* (last edited 9 months ago) (1 child)

    People don’t take out home equity loans to spend on groceries, maids, or yachts. They spend it on improving or repairing their home.

    1. Having worked in a financial institution for many years, I can tell you that this is not even close to universally true. It's very common to use it as a debt consolidation strategy.
    2. Even assuming this is always true, you're essentially saying that they use the money from the loan against which their house is collateral, to do things that increase the value of the house. But borrowing using your shares in a company as collateral, in order to invest into that same company to increase its value, is essentially an identical 'strategy'. You're just arbitrarily deciding it's bad for one illiquid asset to be used as collateral, but not another, even if the goal (increasing the value of the thing used as collateral) is identical.
  • permalink
  • fedilink
  • source
  • parent
  • hideshow 1 child comment
    •
  • [–] 1 point 9 months ago

    But that’s just the thing - they’re not borrowing against their shares to improve the company. They’re using that as their income, and when the loans come due they just take out another one to pay off the first one. Infinite money glitch.

  • permalink
  • fedilink
  • source
  • parent
  • [–] 1 point 9 months ago (3 children)

    Fair enough, but if you want to start taxing the ultra wealthy, you have to start somewhere. Those loans are their main source of income.

  • permalink
  • fedilink
  • source
  • parent
  • hideshow 3 child comments
    •
  • [–] 2 points 9 months ago* (last edited 9 months ago) (2 children)

    Those loans are their main source of income.

    Loans aren't income. They only reason this 'move' works at all is because they are creating value at a rate that exceeds the interest rate + inflation. Other than the scale of the 'tactic', it's no different from taking a home equity loan to improve your home so that the amount it sells for has increased by more than was lost from the interest on/repayment of the loan.

    Realize that the lenders giving these ultra-wealthy these loans are not in the business of throwing their money out the window for fun. They make these loans only because they get repaid, with enough interest to make being without those funds in the meantime worth it for them.

  • permalink
  • fedilink
  • source
  • parent
  • hideshow 2 child comments
    •
  • [–] 1 point 9 months ago (1 child)

    Then the stocks used as collateral should be taxed as realized gains.

    Since we're talking about changes to the tax code, we could make it so that it only applies to loans over some arbitrary amount, say 10x the median yearly income of the bottom 50% of earners (within a certain time period to counter multiple smaller loans as loopholes).

  • permalink
  • fedilink
  • source
  • parent
  • hideshow 1 child comment
    •
  • [–] 0 points 9 months ago

    Then the stocks used as collateral should be taxed as realized gains.

    Why? They haven't been realized. Literally nothing happens to collateral unless the loan is defaulted on. Do you think you should your house should be treated as realized gains (i.e. the same as if you sold it), if you take out a home equity loan?

    we could make it so that it only applies to loans over some arbitrary amount...(within a certain time period to counter multiple smaller loans as loopholes)

    This is literally impossible to realistically enforce, total waste of resources and effort to even try. Myriad ways to spread it out over different people/entities/etc.

  • permalink
  • fedilink
  • source
  • parent