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Posted on 2/18/26 at 9:53 am to Penrod
quote:
BTW, DOGE is STILL producing very real gains (about $50 billion per year) for the taxpayers through a reduced federal workforce.
The federal budget deficit for fiscal year 2024 (ended Sept. 30, 2024) totaled $1.8 trillion, marking a $138 billion or 8% increase over the 2023 deficit. This deficit equaled 6.4% of the nation's Gross Domestic Product (GDP), significantly above the 50-year average of 3.8%. The increase was largely driven by rising interest costs on national debt, Social Security, and Medicare.
We got a ways to go.
Posted on 2/18/26 at 10:39 am to Captain Beyond
quote:
The federal budget deficit for fiscal year 2024 (ended Sept. 30, 2024) totaled $1.8 trillion, marking a $138 billion or 8% increase over the 2023 deficit. This deficit equaled 6.4% of the nation's Gross Domestic Product (GDP), significantly above the 50-year average of 3.8%. The increase was largely driven by rising interest costs on national debt, Social Security, and Medicare.
We got a ways to go
YES! And…
quote:
DOGE is STILL producing very real gains (about $50 billion per year) for the taxpayers through a reduced federal workforce.
Posted on 2/18/26 at 10:42 am to dickkellog
quote:
no jethro our problem is that too many now pay nothing. since the end of ww2 when we had deliberate confiscatory tax rates through the reagan cuts which indexed the brackets to inflation, and the bush tax cuts, the creation of child tax credits and the trump tax cuts 90% of americans pay no income tax. that's not morally right and it's not fiscally sound.
You nailed it, Jethro, and some of the people now paying nothing are the elite billionaire class. Why can’t you understand that?
Posted on 2/18/26 at 10:51 am to Penrod
quote:
You nailed it, Jethro, and some of the people now paying nothing are the elite billionaire class. Why can’t you understand that?
I get you wont understand this but proper fix for this is not more taxation or more regulations. The answer is to remove the loopholes that only exist for the super rich. Minimize and simplify tax codes will result in the rich paying more.
If you fall for the traditional "we need to tax them more" all you are going to get is new taxes with new loopholes where only the people already paying taxes get to pay more taxes.
Posted on 2/18/26 at 11:05 am to notsince98
quote:
he answer is to remove the loopholes that only exist for the super rich.
Which ones would those be? Using stock as collateral to secure a personal loan isn't a loophole. Anyone can do it.
I also think it is a bit obtuse to say using that strategy (which I haven't ever really seen any hard figures that it is happening at any type of large scale, but maybe those numbers are out there?) that they aren't paying taxes. It is a tax deferment method for sure, but taxes are still being paid multiple ways. The lenders are paying income tax and eventually the borrowing party will have to either liquidate assets or use income to repay the loan and interest, which are both taxable events as well.
This post was edited on 2/18/26 at 11:58 am
Posted on 2/18/26 at 12:02 pm to notsince98
quote:
I get you wont understand this but proper fix for this is not more taxation or more regulations. The answer is to remove the loopholes that only exist for the super rich. Minimize and simplify tax codes will result in the rich paying more.
Since I am one of the rich, living exclusively off of investments, I get it all too well. My suggestions were to eliminate the carried interest for private equity and to tax loans, against portfolios, that are used in place of income. Do you agree with these or do I still not understand?
Posted on 2/18/26 at 12:16 pm to Penrod
quote:
tax loans, against portfolios, that are used in place of income
If we went down this route as a solution, would you then be in favor for a 1:1 deduction for future taxes due when they sell assets or use income to repay the loan/interest?
Posted on 2/18/26 at 12:21 pm to NC_Tigah
quote:
quote:
what do you say about billionaires paying no taxes?
I routinely follow this with "What's the solution?" but you included a couple of solid proposals.
quote:
The first is to repeal the carried interest laws that allow private equity to sell companies at gains and pay no taxes if they roll it into another fund. The second is that loans to support lifestyles (in other words, loans used as income) should be taxed. This would prevent billionaires, and millionaires north of about $75 million, from using loans to avoid capital gains.
Indeed.
Add to that the government skim of "capital gains" that results from government generated inflation. Make capital gains only in constant dollars.
Posted on 2/18/26 at 12:46 pm to GoCrazyAuburn
quote:
If we went down this route as a solution, would you then be in favor for a 1:1 deduction for future taxes due when they sell assets or use income to repay the loan/interest?
We would have to. The basis would have changed. But the reality is that the practice would largely end. In March I am going to have to decide whether to withdraw some of my investments, paying taxes on any gains, in order to fund our lifestyle. I am also considering a roughly 4% interest loan against the account. If I do that then I could keep the portfolio intact and compounding.
For the sake of round numbers, let’s say I need $800,000. I would have to sell about $1 million, and pay about 20% capital gains. Or, I could borrow $800,000 and leave that million in stocks. I’d pay $32,000 in interest if I borrow. What can I expect to make? 8%? If so, that’s $80,000. Now, I still owe basis on that $1,080,000. But it is still at work compounding. And if I can afford to accumulate the debt that would come from borrowing about 1.07 times the previous year’s debt (4% for interest and 3% for inflation), then I can do that until I die. At that point, my heirs inherit tax free and pay off the loan that might be $30 million or so.
That would normally be the smart way to do it. I probably won’t borrow, because the method depends on having good returns in the market, and I’m predicting a sluggish market this year (This is a nearly foolproof sign you should bet the house).
This post was edited on 2/18/26 at 12:48 pm
Posted on 2/18/26 at 12:56 pm to Penrod
quote:
At that point, my heirs inherit tax free and pay off the loan that might be $30 million or so.
Well, besides estate taxes.
Would this also apply to any loan used for income where an asset is used as collateral? So for instance, a HELOC?
This post was edited on 2/18/26 at 1:36 pm
Posted on 2/18/26 at 12:59 pm to Cosmo
quote:
We need a 20% flat tax on everybody with no loopholes or hiding income
Regurgitated talking point that would never work. Billionaires would find away around it. What are you going to tax? Assets?
Posted on 2/18/26 at 3:22 pm to Penrod
quote:
Since I am one of the rich, living exclusively off of investments, I get it all too well. My suggestions were to eliminate the carried interest for private equity and to tax loans, against portfolios, that are used in place of income. Do you agree with these or do I still not understand?
there's the internet we all know and love,
for the record thurston howell III i'm not a fan of declaring that a loan is now income seems that could be a slippery slope i was a broker for 21 years and lived out of my margin account and i don't know a single broker that didn't.
the reason it's not income jughead is that you have to pay it back.
Posted on 2/18/26 at 5:01 pm to Penrod
quote:
This is true, but you are skipping over the point that the top 1% is divided into two groups: the wealthy who are paying the 40% to which you referred, and the super-wealthy who are paying almost nothing. It’s that latter group that the article is addressing, and it’s true. The tax code is set up to allow them to go through generations of the most extravagant living without paying either income tax or capital gains tax.
Is the interest paid on the loans taxed to the lender to pay? Think carefully.
Posted on 2/18/26 at 5:29 pm to udtiger
quote:
Is the interest paid on the loans taxed to the lender to pay? Think carefully.
I didn’t quite understand the wording of the question. The interest paid would be income to the lender, but it would have no taxable effect for the borrower.
Posted on 2/18/26 at 5:38 pm to GoCrazyAuburn
quote:
Well, besides estate taxes.
Nope. Zero estate taxes for the generationally wealthy. Example:
I have ownership in a company that is probably valued at about $1.5 million. I am about to put those shares into trust for my children. Regardless of what that company sells for one day, they will only consider the $1.5 million for purposes of estate tax. Both my wife and I can give about $14 million tax free, so $28 million. You see how the game works? I expect that company to grow such that my share will be worth 10 or 15 million dollars. I can donate shares of many companies, public or private, and only the current value is considered for inheritance taxes. If the last of my wife and I dies in 30 years, and we put $28 million in trust today, can you imagine how much will be passed on tax free?
What if Elon Musk put his shares of Space X or Tesla into trust at their foundings? He’d have $500 billion dollars to pass to his heirs inheritance tax free! Of course they would have to pay capital gains one day, but I think their is a scheme to trick the capital gains basis.
Posted on 2/18/26 at 5:43 pm to Penrod
Well, for it to be in a trust that won’t be subject to estate tax, those shares will still have capital gains tax when liquidated. Your examples aren’t anything new to me, I’m very aware of how “the game” works.
Not really. You either pay the estate taxes and shares are transferred at a stepped up basis, which for the generationally wealthy makes little sense, or you put the assets in an irrevocable trust that removes them from estate tax calculations, but the shares receive no stepped up basis and capital gains tax will be due when sold.
Also, I’ll ask again since I didn’t get an answer. With your proposal, would it apply to all loans made that are used for income? HELOC’s for example?
quote:
I think their is a scheme to trick the capital gains basis.
Not really. You either pay the estate taxes and shares are transferred at a stepped up basis, which for the generationally wealthy makes little sense, or you put the assets in an irrevocable trust that removes them from estate tax calculations, but the shares receive no stepped up basis and capital gains tax will be due when sold.
Also, I’ll ask again since I didn’t get an answer. With your proposal, would it apply to all loans made that are used for income? HELOC’s for example?
This post was edited on 2/18/26 at 5:49 pm
Posted on 2/18/26 at 5:50 pm to Penrod
quote:
quote:
Is the interest paid on the loans taxed to the lender to pay? Think carefully.
I didn’t quite understand the wording of the question. The interest paid would be income to the lender, but it would have no taxable effect for the borrower.
So, ultimately, the $ is taxed. Just not from the dirty billionaire.
Posted on 2/18/26 at 5:51 pm to GoCrazyAuburn
quote:
Also, I’ll ask again since I didn’t get an answer. With your proposal, would it apply to all loans made that are used for income? HELOC’s for example?
First, it’s not my proposal. It’s a proposal I have seen discussed with which I agree. Second, I doubt it would apply to all. I’m sure there would be rules about income levels, ratio of loan to ordinary income, etc.
This is meant to stop a particular thing - high net worth individuals dodging taxes by using loans against portfolios.
Posted on 2/18/26 at 5:52 pm to Penrod
quote:
This is meant to stop a particular thing - high net worth individuals dodging taxes by using loans against portfolios.
You’ve yet to show them actually dodging them, only deferred as I said in my first post.
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