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There is obviously an upward limit on the debt they can acquire. The problem isn’t that this is an infinite money cheat. It is a tax avoidance cheat because no
by slg 4y ago
There is obviously an upward limit on the debt they can acquire. The problem isn’t that this is an infinite money cheat. It is a tax avoidance cheat because now the income is all long term capital gains that can be realized whenever is most convenient and gains can be offset by losses. That is how these people have tax rates below 5%.
- missedthecue 4y agoThere is a $3000 cap on capital gains loss offsets. Useful for the middle class, but useless if you're Jeff Bezos.
- slg 4y agoYou are misremembering the details of that cap. The $3k cap is for offsetting ordinary income. These people have little ordinary income. Almost all of their money would be from capital gains. A $1b capital loss can be used to completely offset a $1b capital gain and leave a tax bill of $0.
- RhysU 4y agoRight. Because the tax due on $0 net is $0.