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> Wealth is always eventually taxed when it’s liquidated. For large segments of wealth (real estate) this is untrue. Inherited property receives a step-up in
by nrmitchi 6y ago
> Wealth is always eventually taxed when it’s liquidated.
For large segments of wealth (real estate) this is untrue.
Inherited property receives a step-up in cost basis to the current "fair market value", such that the capital gains liability is removed.
You might argue that this is realm of the "Estate Tax", but that is a different topic.
https://www.investopedia.com/terms/s/stepupinbasis.asp https://www.investopedia.com/terms/s/stepupinbasis.asp
> if it is never liquidated, then it arguably doesn’t really matter.
This is also not true. It does matter. It is not difficult to take extremely large "loans" (loans are not taxed) against assets that you own, in order to avoid actually selling the asset. This is a not-rocket-science way to reap the benefits of an absolutely massive fortune without any of it ever being "liquidated".
- bhupy 6y ago> You might argue that this is realm of the "Estate Tax", but that is a different topic. What? Why? This is pretty squarely in the realm of how to taxa transfer of wealth. The wealth tax is a really ham-fisted way to solve this problem. > It is not difficult to take extremely large "loans" (loans are not taxed) against assets that you own, in order to avoid actually selling the asset. Even if one were to take a collateralized loan, it would need to eventually be repaid, and for this to happen, some gain would have to be realized somewhere. That money isn't free. No matter what, that wealth is eventually taxed.