2 ms·
> When you lend money from a bank, you will not spend it on fancy restaurant visits. Because you know you will have to pay it back. Wealthy people borrow again
by naasking 3y ago
> When you lend money from a bank, you will not spend it on fancy restaurant visits. Because you know you will have to pay it back.
Wealthy people borrow against their equity all of the time to avoid taxes while funding their lavish lifestyles.
- chii 3y agoIf the money borrowed is not spent on investments, then they would have to use after-tax money to pay the interest. This after-tax money needs to have been pre-tax money at some point, so therefore, they do pay taxes at some point. Just not income tax presumably, but something akin to capital gains tax (e.g., sell off some of their assets/equity to pay interest). It's a lower tax rate, but in absolute terms, it's still a large numbner.