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Actually the wealthy (also) use debt as an alternative to realizing taxable income. Borrowing money at 1-3% is a lot cheaper than paying 40-50% tax. You can es
by cletus 5y ago
Actually the wealthy (also) use debt as an alternative to realizing taxable income.
Borrowing money at 1-3% is a lot cheaper than paying 40-50% tax. You can essentially defer tax liabilities forever this way.
- chii 5y agobut to pay the debt (that is used for consumption), they need after-tax dollars. If they borrow to invest (instead of consumption), then yes, paying debt is better than paying tax and investing the after-tax dollars.