3 ms·
Wealthy people of course do all sorts of financial optimization. The framing of this as being primarily a way to avoid CGT is imho just uninformed populist rhet
by qeternity 2y ago
Wealthy people of course do all sorts of financial optimization. The framing of this as being primarily a way to avoid CGT is imho just uninformed populist rhetoric. The main reason this is done is for leverage e.g. Elon wants to buy Twitter but he does not want to reduce his stake in Tesla (ignoring whether he could actually liquidate that much TSLA stock in the first place).
- altacc 2y agoI'd disagree as due to the incredibly low amount of tax paid by the ultra wealthy it looks like CGT avoidance and Buy Borrow Die is a primary use case for borrowing against assets.
- amalgamationga 2y ago> the incredibly low amount of tax paid by the ultra wealthy According to IRS data, the top 1% of earners pay roughly 40% of all federal income taxes.
- qeternity 2y agoYou still have to pay interest. At 5% interest rates compounded after 4 years it’s cheaper to just pay CGT. The wealthy pay the vast majority of taxes. You might not think it’s enough, but let’s be realistic here. The biggest government expenditures don’t scale with someone’s wealth. So wealthy people aren’t consuming more government services yet they pay a much larger absolute sum.