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> A few percent of interest is a lot cheaper than 38% Not sure why that is comparable.
by cscurmudgeon 2y ago
> A few percent of interest is a lot cheaper than 38%
Not sure why that is comparable.
- vidarh 2y agoLet's say you have a tax debt of 1m, and your choice is to take out a 1m net dividend. Now you have to pay dividend tax. The other alternative is to borrow 1m, and pay interest on a 1m loan. Unless you hold the loan long enough for the aggregate interest accrued until you're able to sell some shares exceeds the dividend tax, it's a net saving.
- cscurmudgeon 2y agoAh, ok. But how many illiquid companies pay out dividends though? The real alternative is to not tax illiquid wealth.
- vidarh 2y ago> Ah, ok. But how many illiquid companies pay out dividends though? Ones whose founders have protected themselves against a significant wealth tax bill by ensuring investment agreements etc. protect their ability to. It's not rocket science to make this work if you worry about it. > The real alternative is to not tax illiquid wealth. Why? Taxing illiquid wealth has worked just fine in Norway for decades.