7 ms·

Is he trying to sound smart or simply promote anti-tax candidates so he keeps more of his money?

by fundad 4y ago

epgui 4y ago
I'm torn on this question. I think I could argue both sides ad nauseam, so I'll just say that I don't know what he thinks.
- fundad 4y ago
  Some columnists can’t figure him out either, but his motives are clear, I’m going by not subtle actions. He promotes GOP candidates and favors right wing journalists. He engages in QAanon conspiracies on his network. He’s one of many right wing operators who started or bought social media sites. Donating the personal maximum to both parties is nothing compared to what is essentially $44B in-kind campaign contribution.
tenpies 4y ago
Isn't it too late for that given the exorbitant tax bill he already paid? [1] Short of Democrats passing one of those economy-destroying net wealth taxes, or a truly-absurd unrealized capital gains tax; the damage is done for Musk. Granted, taxes of this nature being what they are, he will likely be able to recover some of that amount in future years. --- [1] https://www.cnbc.com/2021/12/20/elon-musk-says-he-will-pay-over-11-billion-in-taxes-this-year.html https://www.cnbc.com/2021/12/20/elon-musk-says-he-will-pay-o...
- LynxInLA 4y ago
  In your mind, would it be "truly absurd" to redefine what counts as a realized capital gain? [1] In my mind, if you take a loan against your equity, you are realizing the current market value. This would be difficult to implement (especially with private companies and options), but it would close a big gap in the tax system that is primarily used for tax avoidance. [2] --- [1] I completely agree that taxing unrealized gains in the current system would be a terrible idea. [2] The main non-tax reasons I can think of are retaining voting power and cashing out on pre-ipo stock.
  - epgui 4y ago
    Are loans against equity using the full market value of the equity as the value of collateral? I would find that surprising.
    - LynxInLA 4y ago
      I doubt it, but why wouldn't it be close to market value for public companies? I don't know how it works for the ultra-wealthy, but regular investors can draw a loan against their deposits with securities-based lines of credit (SBLOCs). SBLOCs have a limit smaller than the total value of your portfolio, but your collateral is still the current securities. I'm mainly spitballing here, but I agree it would be extremely difficult to implement fairly. I just think it is worth investigating.
      - epgui 4y ago
        > I doubt it, but why wouldn't it be close to market value for public companies? If it's a large amount of shares, there should still be a liquidity discount (not exactly a DLOM, but something like that, because when you try to sell a large amount quickly, you can't get your order filled at the market rates without depressing the market rates). Plus, as we have just discussed, you can presume that even if the shares are fully liquid, part of the gains (if there are gains) will be taxed, and that's money that might not be available to pay off the creditor. On top of that, I'd wager that lenders would subtract an additional safety margin for volatility/risk. I have absolutely no idea, and please don't quote me on this, but it wouldn't surprise me if creditors applied a ratio of at least 1:2. --- Edit: this random website I stumbled upon on the first page of Google search results for the query "using share equity as collateral" (no idea how reliable or representative this is) seems to indicate that a ratio of 1:2 (they say "50%") is applied. They also say that you could expect to pay about 1% in interest annually. https://www.ennessglobal.com/portfolio-finance/securities-backed-lending https://www.ennessglobal.com/portfolio-finance/securities-ba... They also mention that there may be qualitative factors that come into play: The key points a lender will look at are: - The value of your securities - What the security is made up of - The liquidity of the security - If the security is listed, which exchange it is listed on - How concentrated the shares are - The industry or field the company trades in - The management team
- fundad 4y ago
  Oh so the rest of his wealth is in a Roth? Word, didn’t know that.

Is he trying to sound smart or simply promote anti-tax candidates so he keeps more of his money?

by fundad 4y ago

Is he trying to sound smart or simply promote anti-tax candidates so he keeps more of his money?

I'm torn on this question. I think I could argue both sides ad nauseam, so I'll just say that I don't know what he thinks.

fundad 4y ago
Some columnists can’t figure him out either, but his motives are clear, I’m going by not subtle actions. He promotes GOP candidates and favors right wing journalists. He engages in QAanon conspiracies on his network. He’s one of many right wing operators who started or bought social media sites. Donating the personal maximum to both parties is nothing compared to what is essentially $44B in-kind campaign contribution.

tenpies 4y ago

Isn't it too late for that given the exorbitant tax bill he already paid? [1] Short of Democrats passing one of those economy-destroying net wealth taxes, or a truly-absurd unrealized capital gains tax; the damage is done for Musk. Granted, taxes of this nature being what they are, he will likely be able to recover some of that amount in future years. --- [1] https://www.cnbc.com/2021/12/20/elon-musk-says-he-will-pay-over-11-billion-in-taxes-this-year.html https://www.cnbc.com/2021/12/20/elon-musk-says-he-will-pay-o...

LynxInLA 4y ago
In your mind, would it be "truly absurd" to redefine what counts as a realized capital gain? [1] In my mind, if you take a loan against your equity, you are realizing the current market value. This would be difficult to implement (especially with private companies and options), but it would close a big gap in the tax system that is primarily used for tax avoidance. [2] --- [1] I completely agree that taxing unrealized gains in the current system would be a terrible idea. [2] The main non-tax reasons I can think of are retaining voting power and cashing out on pre-ipo stock.
- epgui 4y ago
  Are loans against equity using the full market value of the equity as the value of collateral? I would find that surprising.
  - LynxInLA 4y ago
    I doubt it, but why wouldn't it be close to market value for public companies? I don't know how it works for the ultra-wealthy, but regular investors can draw a loan against their deposits with securities-based lines of credit (SBLOCs). SBLOCs have a limit smaller than the total value of your portfolio, but your collateral is still the current securities. I'm mainly spitballing here, but I agree it would be extremely difficult to implement fairly. I just think it is worth investigating.
    - epgui 4y ago
      > I doubt it, but why wouldn't it be close to market value for public companies? If it's a large amount of shares, there should still be a liquidity discount (not exactly a DLOM, but something like that, because when you try to sell a large amount quickly, you can't get your order filled at the market rates without depressing the market rates). Plus, as we have just discussed, you can presume that even if the shares are fully liquid, part of the gains (if there are gains) will be taxed, and that's money that might not be available to pay off the creditor. On top of that, I'd wager that lenders would subtract an additional safety margin for volatility/risk. I have absolutely no idea, and please don't quote me on this, but it wouldn't surprise me if creditors applied a ratio of at least 1:2. --- Edit: this random website I stumbled upon on the first page of Google search results for the query "using share equity as collateral" (no idea how reliable or representative this is) seems to indicate that a ratio of 1:2 (they say "50%") is applied. They also say that you could expect to pay about 1% in interest annually. https://www.ennessglobal.com/portfolio-finance/securities-backed-lending https://www.ennessglobal.com/portfolio-finance/securities-ba... They also mention that there may be qualitative factors that come into play: The key points a lender will look at are: - The value of your securities - What the security is made up of - The liquidity of the security - If the security is listed, which exchange it is listed on - How concentrated the shares are - The industry or field the company trades in - The management team
fundad 4y ago
Oh so the rest of his wealth is in a Roth? Word, didn’t know that.