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Started By
Message
“The rich avoid tax by taking loans against their stocks!”
Posted on 6/13/26 at 3:02 pm
Posted on 6/13/26 at 3:02 pm
This talking point is making the rounds on X again now that Elon is in his own little “4 commas” club.
I’m currently in a back forth with one I reeled in that insists this is how they pay no taxes.
He tries to go on tangents with things like “normal people can’t do this”.
I keep bringing it back to a comparison with a HELOC.
Should a person that pulls cash out of their house with a HELOC pay taxes on that money?
If not, then why should it be different for other assets?
And, by the way, the appreciated value of those stocks that collateralized the loan is fully taxable. Primary residence appreciation is not. So, if anything, common proles have proportionally more opportunity to avoid taxes than 12-Zero Elon.
I think I’m closing in on:
I’ll probably be blocked any minute now.
I’m currently in a back forth with one I reeled in that insists this is how they pay no taxes.
He tries to go on tangents with things like “normal people can’t do this”.
I keep bringing it back to a comparison with a HELOC.
Should a person that pulls cash out of their house with a HELOC pay taxes on that money?
If not, then why should it be different for other assets?
And, by the way, the appreciated value of those stocks that collateralized the loan is fully taxable. Primary residence appreciation is not. So, if anything, common proles have proportionally more opportunity to avoid taxes than 12-Zero Elon.
I think I’m closing in on:
I’ll probably be blocked any minute now.
22
Posted on 6/13/26 at 3:05 pm to Ag Zwin
Thank you.
Posted on 6/13/26 at 3:40 pm to Ag Zwin
The loans are called SBLOCs and with 100k portfolio most people can get one
Posted on 6/13/26 at 3:57 pm to Ag Zwin
Also dumb because they have to pay the loan at some point. However they come up with the money is going to be taxable.
Posted on 6/13/26 at 4:04 pm to Ag Zwin
Now do Congress and the Senate with their insider trading.
I'll hang up and listen.
I'll hang up and listen.
Posted on 6/13/26 at 4:05 pm to Ag Zwin
They mainly do it to avoid inheritance taxes for their heirs.
Everyone whose parents own securities at death will benefit from the new basis rule, but frankly it violates my sense of fair play.
Why should the value of your estate go up just because you die?
Everyone whose parents own securities at death will benefit from the new basis rule, but frankly it violates my sense of fair play.
Why should the value of your estate go up just because you die?
Posted on 6/13/26 at 4:12 pm to Rusty_magnet
quote:
Now do Congress and the Senate with their insider trading.
I'll hang up and listen.
Good, because I’ll tell you the same thing I keep telling him.
We are talking about one thing and one thing only here.
Even if I agree with you, that’s not today’s topic.
Posted on 6/13/26 at 4:12 pm to Ag Zwin
I don't think you have to be necessarily "rich" to take advantage of that.
It's just smart financial maneuvering.
The Marxo-Commies are such insufferable scumbags.
It's just smart financial maneuvering.
The Marxo-Commies are such insufferable scumbags.
Posted on 6/13/26 at 4:13 pm to Ag Zwin
quote:
Should a person that pulls cash out of their house with a HELOC pay taxes on that money?
If not, then why should it be different for other assets?
You have a valid fairness point here. However, the overall point, that the rich use loans to defer paying capital gains, is true. And I think we should fix that. We have a dangerous widening of the gap between the super rich and the rest of society. We should address that. And by “we” I mean conservatives.
If we don’t address it, the pressure will build until the left addresses it with Marxism. Taxing loans secured by stocks that are used for living expenses is a sensible measure. BTW, I do it. So I’m not motivated by envy or hatred.
Posted on 6/13/26 at 4:15 pm to Bestbank Tiger
quote:
Also dumb because they have to pay the loan at some point. However they come up with the money is going to be taxa
It’s essentially a line of credit where they pay the interest using the LOC. Not much different than a HELOC. They don’t want earned income.
Posted on 6/13/26 at 4:19 pm to Penrod
quote:
However, the overall point, that the rich use loans to defer paying capital gains, is true. And I think we should fix that. We have a dangerous widening of the gap between the super rich and the rest of society. We should address that. And by “we” I mean conservatives.
They are deferring the gains as everyone tries to do…. If the government implemented a forced sale of capital, the ramifications would cripple the market. The same market that holds the 401ks, pensions and IRAs that the middle class relies on to retire.
Posted on 6/13/26 at 4:20 pm to TROLA
quote:
It’s essentially a line of credit where they pay the interest using the LOC.
Hol’ up.
You’re saying they take out cash, accrue interest charges, then pay that interest with the money they took out?
Posted on 6/13/26 at 4:21 pm to TROLA
What is a HELOC/ LOC?
Posted on 6/13/26 at 4:21 pm to Ag Zwin
Anyone who has a portfolio worth more than $1B should definitely be taxed for this. I'd go as far as $5M but billionaires gotta start paying their fair share.
Posted on 6/13/26 at 4:23 pm to Ag Zwin
quote:
You’re saying they take out cash, accrue interest charges, then pay that interest with the money they took out?
Of course.
ETA. It’s credit though. They only take out what they need. Then roll the interest into the LOC
This post was edited on 6/13/26 at 4:27 pm
Posted on 6/13/26 at 4:23 pm to Bestbank Tiger
quote:
Also dumb because they have to pay the loan at some point. However they come up with the money is going to be taxable.
No, it’s not dumb. I pay something like 5%. That allows me to keep that money in the market compounding. It is easily outgrowing that 5% such that the after tax gains can pay down the debt with a lot of pure profit left over. Remember, I only pay capital gains on this. Also, my managers will harvest losses to offset some of the gains and then reinvest in similar stocks so I don’t lose out on the opportunity of the low share prices.
Posted on 6/13/26 at 4:24 pm to Swampcat
quote:
a HELOC/ LOC?
Home Equity Line Of Credit… Line Of Credit
This post was edited on 6/13/26 at 4:43 pm
Posted on 6/13/26 at 4:25 pm to Ag Zwin
you're preaching to the choir. if i've said all of that once, i've said it a million times.
Posted on 6/13/26 at 4:27 pm to Ag Zwin
You don’t pay income taxes on any loan or line of credit. But don’t you have to pay it back plus interest at some point?
Posted on 6/13/26 at 4:28 pm to TROLA
Ok thanks.
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