4 ms·

How would you change it? I imagine there’s a reason people feel more comfortable lending to Elon than to people with a smaller amount of assets, and that it’s

by alecbz 4y ago

How would you change it? I imagine there’s a reason people feel more comfortable lending to Elon than to people with a smaller amount of assets, and that it’s not “lol fuck poor people”.

toomuchtodo 4y ago
Tax the proceeds at loan origination (1099-whatever filed by whomever is providing the cash based on pledged assets). How you pay the loan back if the collateral declines in value is your problem (or the bank’s problem, depending on the amount in question). High level, it closes a financial engineering loophole (buy, borrow, die [1]). The taxable event is when you get liquid, and a loan is liquidity. The tax code requires a patch, that’s all. [1] https://youtu.be/8pBPZMUcsh0 https://youtu.be/8pBPZMUcsh0
- jcheng 4y ago
  Would taxing the loan reset the cost basis, then? Or are you suggesting taxing the same gains twice (or more than twice if someone repeatedly takes out and pays back a loan against the same assets)? I agree buy, borrow, die is a problem but the “weird” feature of tax law that makes that possible is the step up in basis. (Getting rid of that has its own challenges I’m sure.)
  - bombcar 4y ago
    Given how fast heirs squander their wealth, it may not be worth the government fighting it too much, especially as the side-effects cause all sorts of howling (grandpa dies, dad inherits farm, has to sell it to pay the tax bill).
  - toomuchtodo 4y ago
    Shooting from the hip, sure, the broker could record this as a cost basis adjustment and report that attribute along with the rest of the form reported to the IRS.
- alecbz 4y ago
  Oh, sure, I thought GP meant the opposite (make it easier for non-rich people to take loans on assets) but this makes more sense.
  - ragebol 4y ago
    Guess that is implied but not really what I meant. Poor people don't have much assets so it wouldn't do much. My issue with the whole "Elon has to pay taxes" thing is that there are loads of people (fans?) fighting over why he shouldn't have to. It's the richest dude in the world, he really doesn't need defending for everyday people. I also like the cool stuff he does, don't like the non-cool stuff he does, as I do with a lot of people really
ragebol 4y ago
One proposal could be to also allow taxes to be payed in stocks. When those bits of stock bits are then transferred to ordinary people, they would be entitled to a bit of the dividends of eventually all companies. Not thought this all the way through and I'm very much not an economist, so there are lots of impracticalities. In a way, it's the opposite of 'cease the means of production': distribute the 'means' of capitalism.

by alecbz 4y ago

How would you change it? I imagine there’s a reason people feel more comfortable lending to Elon than to people with a smaller amount of assets, and that it’s not “lol fuck poor people”.

toomuchtodo 4y ago

Tax the proceeds at loan origination (1099-whatever filed by whomever is providing the cash based on pledged assets). How you pay the loan back if the collateral declines in value is your problem (or the bank’s problem, depending on the amount in question). High level, it closes a financial engineering loophole (buy, borrow, die [1]). The taxable event is when you get liquid, and a loan is liquidity. The tax code requires a patch, that’s all. [1] https://youtu.be/8pBPZMUcsh0 https://youtu.be/8pBPZMUcsh0

jcheng 4y ago
Would taxing the loan reset the cost basis, then? Or are you suggesting taxing the same gains twice (or more than twice if someone repeatedly takes out and pays back a loan against the same assets)? I agree buy, borrow, die is a problem but the “weird” feature of tax law that makes that possible is the step up in basis. (Getting rid of that has its own challenges I’m sure.)
- bombcar 4y ago
  Given how fast heirs squander their wealth, it may not be worth the government fighting it too much, especially as the side-effects cause all sorts of howling (grandpa dies, dad inherits farm, has to sell it to pay the tax bill).
- toomuchtodo 4y ago
  Shooting from the hip, sure, the broker could record this as a cost basis adjustment and report that attribute along with the rest of the form reported to the IRS.
alecbz 4y ago
Oh, sure, I thought GP meant the opposite (make it easier for non-rich people to take loans on assets) but this makes more sense.
- ragebol 4y ago
  Guess that is implied but not really what I meant. Poor people don't have much assets so it wouldn't do much. My issue with the whole "Elon has to pay taxes" thing is that there are loads of people (fans?) fighting over why he shouldn't have to. It's the richest dude in the world, he really doesn't need defending for everyday people. I also like the cool stuff he does, don't like the non-cool stuff he does, as I do with a lot of people really

ragebol 4y ago

One proposal could be to also allow taxes to be payed in stocks. When those bits of stock bits are then transferred to ordinary people, they would be entitled to a bit of the dividends of eventually all companies. Not thought this all the way through and I'm very much not an economist, so there are lots of impracticalities. In a way, it's the opposite of 'cease the means of production': distribute the 'means' of capitalism.