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This insanity stems from the media misleading the public into thinking people like Musk (for example) actually have hundreds of billions in cash. He doesn't. Wh
by collias 5y ago
This insanity stems from the media misleading the public into thinking people like Musk (for example) actually have hundreds of billions in cash. He doesn't. What he has is Tesla stock, which the public is welcome to buy as well.
If you bought say $5000 of TSLA 3 years ago, that would now be worth nearly $100,000. The media will try to tell the uninformed that you've made a ton of money, and "have paid no taxes". But you haven't made a ton of money, you still just have TSLA shares. As soon as you convert them to USD you have to pay tax on the gains like everyone else.
- toomuchtodo 5y agoIf you can borrow against it, you can tax the loan proceeds. It just moves the tax realization to when you receive liquidity for the asset versus a bonafide transfer, closing a loophole. Pay the loan back whenever you want. https://financialpost.com/personal-finance/high-net-worth/elon-musk-short-on-cash-keeps-borrowing-more-and-more-money-even-as-tesla-stock-surges https://financialpost.com/personal-finance/high-net-worth/el... (“Elon Musk, short on cash, keeps borrowing more and more money even as Tesla stock surges; Musk has US$548 million in personal loans from Morgan Stanley, Goldman Sachs and Bank of America, an increase of 8 per cent since May”
- collias 5y agoI mean...yeah. Normal people do exactly this every month with credit cards, mortgages, etc. Should you pay a tax on your mortgage loan amount?
- toomuchtodo 5y agoMaybe? Depends on your net worth and your income. If the rules aren’t getting the desired results, you change the rules. Clearly (imho) the existence of billionaires demonstrates a deficiency in public policy and tax statute.
- AnimalMuppet 5y agoI don't think "there should be no billionaires" is a good starting point for deriving tax policy. I especially don't think it's good to have that as an undebated starting point.
- toomuchtodo 5y agoTo each their own politics and belief systems. Wealth is a form of power, government and democracy are checks and balances on power. Unchecked power corrupts. Ergo, my position. I appreciate that others might not agree, that’s what voting is for.
- AnimalMuppet 5y agoWell, every year I pay a tax on the value of my house and property. The difference is that I pay it to the state, not to the Feds.
- rsj_hn 5y agoWhy on earth would you tax loan proceeds? Each time you take out a mortgage, auto, or credit card loan you want to be hit with a tax bill? The wealthy are not the only people who borrow to fund to consumption -- the middle class does as well, and much more so than the wealthy.
- toomuchtodo 5y agohttps://www.peoplestaxpage.org/buy-borrow-die https://www.peoplestaxpage.org/buy-borrow-die
- rsj_hn 5y agoTBH, that seems like more of a rant than something resembling policy analysis. It's also quite foolish -- loans are given out secured by some asset more valuable than the loan. That means when you die, the asset goes to the bank. Might as well set up a page advocating for people to get reverse mortgages and try to (incorrectly) frame it as a tax revolt.
- toomuchtodo 5y agoFeel free to Google “buy, borrow, die” and pick a link where the content is delivered in whatever tone you find most palatable. It’s all the same concept (tax avoidance using loopholes and financial engineering).
- unclenoriega 5y ago> What he has is Tesla stock, which the public is welcome to buy as well. Let them eat cake?
- mdavis6890 5y ago"have hundreds of billions in cash." And so what if he does? The biggest issue I see is that so many confuse money/wealth with actual stuff. It's the stuff - the goods and services that add value to our lives - that matter. Consuming stuff takes from society: the time, effort and material to produce it. Simply having wealth, in whatever form, is totally neutral. If Rich Guy has a trillion Dollars in the bank, it doesn't affect anybody. But if they spend it all on potatoes, then that is what would impact society by subtracting all of the potatoes and limiting their use by others. Consumption is what takes from society. Wealth doesn't subtract (or add) anything.