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>Plus, a lot of that wealth is likely 'in' his company, which is really just fake money. Then maybe we should give the poor some of this "fake money" since it'

>Plus, a lot of that wealth is likely 'in' his company, which is really just fake money. Then maybe we should give the poor some of this "fake money" since it's fake and doesn't matter anyway. >EDIT: Repeat after me: net worth increases are not income. Net worth increases are not income. I mean, I "made" $250k last year in home appreciation, but that's just fake money. If they taxed me on it, it would come out of my much smaller take home pay. >This is the big lie. Most of these asset prices are increased due to inflation anyway. In real terms, both the stock market and real estate have been stagnant for decades, but by inflating the currency, they can make people out to have 'increasing net worth' and then tax them. This is an actual big lie, since you can borrow against assets like this with secured loans. And you can turn it into cash without moving out immediately with reverse mortgages. How are you able to get "free real money" from "fake money"? Maybe it's not as fake as you think.

dahfizz 5y ago
> you can borrow against assets like this with secured loans Okay, and how do you pay back these loans? That's right: with your income. You're just moving the problem around.
- mrkurt 5y ago
  No, you die. Your assets get liquidated. The estate pays the loans. No income involved, at least in tax terms.
- monocasa 5y ago
  Or you take out more loans to cover the interest until you die.
- CyanLite2 5y ago
  Ultra-Wealthy secured loans don't work like mortgages you and I deal with. On a $1 billion dollar asset, they can borrow like 40% of that, with no monthly payments, just one big balloon payment at the end of the 10+ year term with a little bit of accrued interest. They simply refinance in 10 years, and now the asset is worth $3 billion and then they take out an even bigger loan. Because it's a loan, it's not considered taxable income. And the interest payments on this loan are tax deductible. And usually these assets (like real estate, or stocks) often pay out dividends or rental income. So they can borrow on these assets ad infinitum and use the proceeds to continue to reinvest in more hard assets and to fund their lavish lifestyle. They won't directly own a super-yacht, their company will own it and rent it back to them, with the maintenance expenses considered business expenses since it's a rental business. Same with their vacation houses. Along the way they may pay a modicum of capital gains taxes on the stock dividends, but it's usually offset by the tax-deductible interest on the loan itself. Rinse and repeat for a few decades. At the end of it all, they have enough dividends/rental income, that's paying for lavish lifestyles, and they still own all of the hard assets that they can then pass down to their heirs with minimal taxable events.
satronaut 5y ago
Everyone gets a free education for 12 years, and access to infinite knowledge (library with books and internet). Qualifying families also have access to dirt cheap internet (at&t offers internet for 10$ a month if you're poor). Most anybody has the means to research how to set up an amazon store, a blog, or a youtube channel and start making business income. But instead of spending their time learning how to better their life, they waste it on social media, watching tv, etc.
- monocasa 5y ago
  > set up an amazon store, a blog, or a youtube channel and start making business income. Those are barely above MLM scams in likelyhood of making money. You're sort of proving the opposite of your point by giving those as examples to pull yourself out of poverty.
  - satronaut 5y ago
    you can make money if you do your research. You won't make millions over night, but you have to start somewhere. Really though, if people learned how to properly budget their time and money, change their habits, and disassociate from groups that bring them down, they'll have positive changes in their life. You can lead a horse to water but you can't make it drink though.
    - monocasa 5y ago
      You can technically make money with Herbalife too. Hell, I wouldn't be surprised if a greater proportion of people made money on Herbalife versus a YouTube channel.
      - satronaut 5y ago
        maybe, but can you say the same on blogging or online e-commerce. Or if somebody supplements their income doing uber/lyft or doordash/instacart?
iammisc 5y ago
We do. Most Americans own homes which means they're sitting on hundreds of thousands in fake money

dahfizz 5y ago

> you can borrow against assets like this with secured loans Okay, and how do you pay back these loans? That's right: with your income. You're just moving the problem around.

mrkurt 5y ago
No, you die. Your assets get liquidated. The estate pays the loans. No income involved, at least in tax terms.
monocasa 5y ago
Or you take out more loans to cover the interest until you die.
CyanLite2 5y ago
Ultra-Wealthy secured loans don't work like mortgages you and I deal with. On a $1 billion dollar asset, they can borrow like 40% of that, with no monthly payments, just one big balloon payment at the end of the 10+ year term with a little bit of accrued interest. They simply refinance in 10 years, and now the asset is worth $3 billion and then they take out an even bigger loan. Because it's a loan, it's not considered taxable income. And the interest payments on this loan are tax deductible. And usually these assets (like real estate, or stocks) often pay out dividends or rental income. So they can borrow on these assets ad infinitum and use the proceeds to continue to reinvest in more hard assets and to fund their lavish lifestyle. They won't directly own a super-yacht, their company will own it and rent it back to them, with the maintenance expenses considered business expenses since it's a rental business. Same with their vacation houses. Along the way they may pay a modicum of capital gains taxes on the stock dividends, but it's usually offset by the tax-deductible interest on the loan itself. Rinse and repeat for a few decades. At the end of it all, they have enough dividends/rental income, that's paying for lavish lifestyles, and they still own all of the hard assets that they can then pass down to their heirs with minimal taxable events.

satronaut 5y ago

Everyone gets a free education for 12 years, and access to infinite knowledge (library with books and internet). Qualifying families also have access to dirt cheap internet (at&t offers internet for 10$ a month if you're poor). Most anybody has the means to research how to set up an amazon store, a blog, or a youtube channel and start making business income. But instead of spending their time learning how to better their life, they waste it on social media, watching tv, etc.

monocasa 5y ago
> set up an amazon store, a blog, or a youtube channel and start making business income. Those are barely above MLM scams in likelyhood of making money. You're sort of proving the opposite of your point by giving those as examples to pull yourself out of poverty.
- satronaut 5y ago
  you can make money if you do your research. You won't make millions over night, but you have to start somewhere. Really though, if people learned how to properly budget their time and money, change their habits, and disassociate from groups that bring them down, they'll have positive changes in their life. You can lead a horse to water but you can't make it drink though.
  - monocasa 5y ago
    You can technically make money with Herbalife too. Hell, I wouldn't be surprised if a greater proportion of people made money on Herbalife versus a YouTube channel.
    - satronaut 5y ago
      maybe, but can you say the same on blogging or online e-commerce. Or if somebody supplements their income doing uber/lyft or doordash/instacart?

iammisc 5y ago

We do. Most Americans own homes which means they're sitting on hundreds of thousands in fake money