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re: “The rich avoid tax by taking loans against their stocks!”
Posted on 6/13/26 at 4:31 pm to Penrod
Posted on 6/13/26 at 4:31 pm to Penrod
quote:
We have a dangerous widening of the gap between the super rich and the rest of society.
This is a credit issue, not a taxation issue. Being able to make money from borrowed money is at the core of it. The rich have more access to capital through asset appreciation, the poor do not. Extra money in the system leads to inflation which also impacts the poor more than not.
If we quit creating capital by allowing it to be borrowed into existence the gap closes. It would crash everything but that’s the solution.
1
Posted on 6/13/26 at 4:32 pm to theballguy
quote:
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.
What is their fair share? What percentage of the income tax revenue should come from billionaires? And since you threw out $5 million, what percentage should come from those with net worths above $5 million? You’re probably aware that they are carrying us already.
Posted on 6/13/26 at 4:33 pm to theballguy
quote:
but billionaires gotta start paying their fair share.
Eat shite
Posted on 6/13/26 at 4:34 pm to Swampcat
I’m trying to understand. I admit I’m not good with this stuff.
You take out say a 10,000$ loan, but you don’t have to pay taxes on it.
If you hv to pay the loan back with interest?
Now what? This is where I’m missing something. I apologize.
You take out say a 10,000$ loan, but you don’t have to pay taxes on it.
If you hv to pay the loan back with interest?
Now what? This is where I’m missing something. I apologize.
Posted on 6/13/26 at 4:34 pm to SquatchDawg
quote:
But don’t you have to pay it back plus interest at some point?
If you ask this then you have no business making the following statement..
quote:
If we quit creating capital by allowing it to be borrowed into existence the gap closes. It would crash everything but that’s the solution.
Posted on 6/13/26 at 4:36 pm to Ag Zwin
quote:
Hol’ up. You’re saying they take out cash, accrue interest charges, then pay that interest with the money they took out?
You realize the criticism is about the ability to pass wealth multiple generations before a single dollar is paid in taxes?
Posted on 6/13/26 at 4:40 pm to Swampcat
quote:
Now what? This is where I’m missing something. I apologize.
These are lines of credit based on the basis of an asset. They roll the interest into the line of credit.
Example.. Bankx gives me 100 million in credit. I’m not taking money out until I want some, it’s not a traditional loan.. The interest is then added into the amount owed. If my credit line gets low but the asset has risen, I then apply for extension of the credit line. Rinse and repeat.
Now. This isn’t a perfect system and can lead to stock manipulations but it also drives liquidity down the line..
Posted on 6/13/26 at 4:40 pm to TROLA
Also someone mentioned a line of credit.
So correct me if I’m wrong: you can only take out a line of credit against the amount of money you hv in the bank.
Let’s say someone has 50000$ dollars in the bank; they then are approved to take a LOC against that 50000$ . How would one make money on this? They still hv to pay it back?
So correct me if I’m wrong: you can only take out a line of credit against the amount of money you hv in the bank.
Let’s say someone has 50000$ dollars in the bank; they then are approved to take a LOC against that 50000$ . How would one make money on this? They still hv to pay it back?
Posted on 6/13/26 at 4:53 pm to Swampcat
No. The credit line is backed by an asset(s) at a defined basis.
These are institutional banks who have billions in cash reserves. They want your business badly. These guys don’t need as much cash as you think. They live on credit based on their wealth…. Most people, myself included think about cash, I’ve found that many of the ultra rich don’t..
Ultra rich have Wealth managers that manage their money and in coordination with tax experts to minimize tax liability.
There’s a big misunderstanding regarding wealth and cash. Two completely different things ..
These are institutional banks who have billions in cash reserves. They want your business badly. These guys don’t need as much cash as you think. They live on credit based on their wealth…. Most people, myself included think about cash, I’ve found that many of the ultra rich don’t..
Ultra rich have Wealth managers that manage their money and in coordination with tax experts to minimize tax liability.
There’s a big misunderstanding regarding wealth and cash. Two completely different things ..
Posted on 6/13/26 at 4:57 pm to Swampcat
quote:
Let’s say someone has 50000$ dollars in the bank; they then are approved to take a LOC against that 50000$ . How would one make money on this? They still hv to pay it back?
Remove the step-up in basis tax and this entire topic disappears.
Posted on 6/13/26 at 4:58 pm to lsuconnman
quote:
You realize the criticism is about the ability to pass wealth multiple generations before a single dollar is paid in taxes?
Then make THAT the topic.
Should basis be completely reset at TOD. I would argue probably not.
Easy to deal with for publicly traded securities. Private companies, not so much.
I can have that conversation because it is concrete policy.
The “He does the same thing I can do but he does it bigger” nonsense just turns into a morass of class envy.
Posted on 6/13/26 at 4:59 pm to holdem Tiger
quote:
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?
It doesn’t. Your tax basis is increased to the value at death. Often, the executor has to sell securities to pay estate taxes. Imposing income tax on a transaction that is necessary to pay estate taxes should violate everyone’s sense of fair play.
Posted on 6/13/26 at 5:01 pm to TROLA
quote:
There’s a big misunderstanding regarding wealth and cash. Two completely different things ..
Exactly.
She has gone off the res the last couple of years with some Trump-bashing, but Claire still gets a lot of stuff right.
This is the X post where my back-and-forth is rooted.
Her point is actually less about the merits of the issue and more about how disingenuously the press and politicians discuss it.
Loading Twitter/X Embed...
If tweet fails to load, click here.Posted on 6/13/26 at 5:02 pm to TROLA
quote:
Not much different than a HELOC.
Can it be frozen like a HELOC?
Posted on 6/13/26 at 5:03 pm to TROLA
quote:
Most people, myself included think about cash, I’ve found that many of the ultra rich don’t..
You don't have to be ultra rich to implement sound financial decisions in your day to day life ... although, yeah, seeking pertinent informations from your various asset managers, a trusted accountant and an occasional tax attorney is prudent.
Listen, if you're doing it right and you're investing through a good fudiciary that you trust ... he's normally going to know the best way to avoid as much tax liability, and how to realize the full potential of your hard earned investments, as possible.
Posted on 6/13/26 at 5:03 pm to TROLA
quote:
. 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.
Nah, we are not talking about that kind of scale. Let’s use Elon Musk as an example. What are his annual expenses? $500 million? If he’s borrowing $500 million per year tax it as ordinary income. The effect will be that he’ll quit doing it and sell some shares instead. He’ll have to pay capital gains on those stock sales.
This is 1/2,000 of Elon’s shares. This is not taxing all of his unrealized gains, just the ones he needs to sell to support his lifestyle. It would not crash markets, or even cause a blip.
Posted on 6/13/26 at 5:10 pm to Ag Zwin
Trump can fix this by allowing people of color to invest in the stock market
Posted on 6/13/26 at 5:11 pm to Penrod
quote:
This is 1/2,000 of Elon’s shares. This is not taxing all of his unrealized gains, just the ones he needs to sell to support his lifestyle. It would not crash markets, or even cause a blip.
I am reminded…
Loading Twitter/X Embed...
If tweet fails to load, click here.Posted on 6/13/26 at 5:12 pm to Penrod
You think he’s spending 500 million a year. 
On what
On what 
Posted on 6/13/26 at 5:16 pm to Ag Zwin
I get letters twice a week asking me to take out a heloc. Whats annoying is i have 200K in equity and they want me to borrow 20. Wish harrasing advertisements were illegal. I havent responded to the last 300 offers. Save some paper.
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