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> The rich borrow against gains That they have to pay back with interest. This made a little sense except for short-term loans when one had liquidity issues wh
by Aloisius 2y ago
> The rich borrow against gains
That they have to pay back with interest. This made a little sense except for short-term loans when one had liquidity issues when interest rates were close to zero or in very, very limited circumstances where someone knew they were close to death - but that more has to do with the broken way we handle taxing inheritance.
With the prime rate is 7.5% today, it makes far less sense.
> "re-invest" (no profit) into durable assets for their business
Capital expenditures aren't subtracted from revenue. They have no effect on profit.
- ty6853 2y ago>Capital expenditures aren't subtracted from revenue. They have no effect on profit. This is a cheap slight of hand to confuse unsophisticated readers. It has effect on taxable profit since much of cap ex is deductible.
- Aloisius 2y ago> since much of cap ex is deductible Since when? Last I checked, capex was not deductible. You can deduct depreciation of assets over time, but that's not going to offset profit to create a loss unless you're spending far more money than you profited (by say, taking out loans). There is the expiring bonus depreciation provision on a limited limited class of assets which would let you create a loss, but even that's subject to recapture if you sell those assets.