re: Wall Street Journal lamenting taxes aren't higher on billionaires

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Why would you tax unrealized gains?

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Because there are a lot of communists and financially illiterate people in the country

When people are referring to billionaires “not paying their share” they are usually not referring to the tax they are paying on income, they are upset they are not paying 30%+ on the “billions” they “made” from their assets increasing in value

Anyone who supports taxes on unrealized gains should not be allowed to vote. It’s basically hanging a sign saying “full retard syndrome”

The next time there is a market downturn, would people get a rebate for the billions they paid in taxes that was not actually “income”?

How are the markets supposed to absorb people liquidating billions of dollars of stock annually to pay a tax bill?

If the net worth increase is due to property value increase, are they supposed to sell their land/buildings to pay taxes?

Then there are the nasty side effects, like how teacher pensions would feast and black rock would gain even more influence. The people buying all that stock being dumped would be mostly mutual funds and pensions, and with that voting control of companies.

It also implies that large private companies (like Koch) would need to be forced into going public or selling their family business to meet the tax bills


And of course, you would need to hire tens of thousands more IRS agents to track all of these evil billionaires and know how much their tab is

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Anyone who supports taxes on unrealized gains should not be allowed to vote.

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Agree. It’s one of the dumbest ideas professed by people that don’t understand finance but it sounds good.

Ultimately the tax rate on LT capital gains for those whose wealth is stratospheric needs to go up.

23.8% is too low for the billionaire crowd. Should match the top bracket for ordinary income in my opinion; otherwise you’re giving preferential treatment to those that own massive amounts of assets.

Wealth gap will continue to worsen vs the average person until this changes.

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Should match the top bracket for ordinary income in my opinion; otherwise you’re giving preferential treatment to those that own massive amounts of assets.

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You want LTCG to have the same rate as ordinary income? Yikes.

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You were just wrong in this thread

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I was wrong about use of assets in trusts. I’m right about the use of loans to avoid taxes. And I posted sources to back it up. The only thing you’ve done to refute that is basically say, “Na-uh.”

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It also fails to recognize that these assets do in fact have to be sold to cover debt payments or reorganization often.

Show me the math. You are full of shite.

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How about just one example? Bill Hwang in 2021. The stock value he used for collateral on loans fell to a point that multiple banks issued a margin call on him and liquidated all his pledged shares. Sold $20 billion worth of his shares.

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How about just one example? Bill Hwang in 2021.

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Obviously it’s foolish to use that strategy to borrow too much in proportion to your wealth. He was brought down by fraud and was a crook from the jump.

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Obviously it’s foolish to use that strategy to borrow too much in proportion to your wealth. He was brought down by fraud and was a crook from the jump.

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But you said they don't sell their shares...

You understand that even if you don't borrow a significant portion of your wealth, a margin call still happens right? If the stock value goes down enough, it will happen. On the flip side, if the interest rates go up significantly, shares will often get liquidated to service the interest payments as they increase.

Here are a few more examples.

Musk sold around $40 billion worth of his shares in '22 to pay a tax bill related to his stock options (which your articles fail to understand or recognize).

Larry Ellison has sold ~$2B since '21

Zuckerberg I think ~$9B since '21

Bezos ~$31B in the last 5 years

The idea that they just aren't selling large amounts of shares just falls on its face when you actually look into it. The theory sounds nice, the real world application is a different story.

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I'm all ears if you want to provide a link that actually shows that these billionaires don't pay income tax on the issuance of their stock and don't pay estate tax and/or capital gains tax at their death.

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First, when you say “issuance of their stock” do you mean a stock award? Income? If so, I never imagined they would not pay income taxes on that.

Second, we’ve already put to bed the estate taxes issue when I admitted fault in the incidents of ownership issue.

The remaining issue, which was the primary issue, is using loans to fund lifestyles to avoid paying capital gains. This is the issue you very persuasively keep saying “Na-uh”, even though I’ve given you links indicating it is a growing concern.

Here is a google AI search. There is some noise in this, but there are some legitimate cases as well.

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Billionaires frequently use low-interest, asset-backed loans to fund luxury lifestyles—purchasing yachts, art, or real estate—without selling stock, thereby avoiding capital gains taxes. This "buy, borrow, die" strategy, often secured by stocks or property, allows them to maintain ownership while accessing cash, with notable examples including Elon Musk, Larry Ellison, and Carl Icahn. Equitable Growth Equitable Growth +3 Key Incidences and Strategies Elon Musk: Borrowed against Tesla and SpaceX shares, including $61 million in mortgages on California properties, to avoid selling shares and triggering taxes. Larry Ellison: Pledged over 250 million shares of Oracle to secure a $9.7 billion personal line of credit. Carl Icahn: Maintained a $1.2 billion loan with Bank of America, which contributed to him paying $0 in federal income taxes in certain years. Denis Sverdlov: Used shares in electric-vehicle maker Arrival to secure a credit line from Citigroup. Alan Howard: Obtained a $30 million mortgage from Citigroup for a $59 million Manhattan townhouse. Clarissa and Edgar Bronfman: Used high-value art, including pieces by Diego Rivera, as collateral for loans. www.wealthmanagement.com www.wealthmanagement.com +3 Why Billionaires Borrow to Live Tax Avoidance: Loans are not considered taxable income, allowing billionaires to avoid capital gains taxes (often 20% or more) that would arise from selling assets. Asset Growth: By borrowing, they keep their assets invested, allowing them to continue growing in value rather than liquidating them. Lower Interest Rates: The interest on these loans is often much lower than the tax bill they would otherwise owe, making it a more efficient way to access cash. The "Step-Up" Rule: Upon death, heirs can inherit these assets with a "stepped-up" basis, often erasing the capital gains tax liability on the appreciation that occurred during the deceased's lifetime.

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You keep using this phrase.

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I think you are thinking of “avoid” in legal terms; I am using it as a common word.

Your argument that the step-up rule can only be used in the case of paying estate taxes is true, but it is not germane. The point is that the ultra-rich using loans to defer taxes is unfair and should be dealt with. This is not an attempt to tax all unrealized capital gains. It is an attempt to close an avenue that is used to “avoid” selling shares to support one’s lifestyle.

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So, it’s not a problem when anyone else does it, just the ultra rich, just because?

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Yes. It’s imperative that we manage our laws so that a balance is maintained among the rich, the middle class and the poor.. If it gets too far out of whack the whole system becomes unstable. People like AOC, Bernie and Mamdani start to resonate with a critical mass of voters and then we could find ourselves staring out the republican window.

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The top 0.1% of US households have experienced a dramatic rise in wealth share since the 1980s, climbing from roughly 7% in the late 1970s to over 19% by 2023. This U-shaped trend shows the ultra-wealthy now hold nearly as much wealth as the bottom 90% combined, with their share of total net worth roughly doubling in the last 30 years.

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Wealth concentration can help us at times, as is probably the case now when the Magnificent Seven are funding our AI and Space race against China, and surely doing it much more effectively than our government could. But if we allow the wealthy to get too far ahead of the rest it will inspire hatred and result in a leftward swing in our politics that is to be avoided.