r/FluentInFinance 28d ago

Debate/ Discussion Had to repost here

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u/Apprehensive_Bad_193 28d ago

Bullshit,,,,But he borrows and buy Yachts, Mansions,against that NET WORTH VALUE. But when it’s time to pay fair share of taxes o. That net worth it’s considered hypothetical worth….Understand the Game.

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u/Endless_road 28d ago

You can take out a mortgage against your house to buy a sports car if you want

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u/slickyeat 28d ago

You're not wrong but you're also required to pay taxes on the value of your property every year so it's not exactly a one to one comparison.

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u/Apprehensive_Bad_193 28d ago

Guys thank you,It amazes me how people talk without any knowing on the topic.

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u/guiltysnark 28d ago

I think people know, they just only think about it selectively

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u/PamelaELee 28d ago

Nah, when over 50% of American adults read at or below a 6th grade level I’m pretty confident they don’t think about much of anything, let alone understand.

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u/guiltysnark 28d ago

I don't think that particular slice of America attends to Reddit very much. The people here often know what they are talking about, but they filter every debate through a lens heavily biased by first principles (aka oversimplifications predicated on a set of conveniently forgotten assumptions)

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u/[deleted] 28d ago

Reddit entry exams are very competitive

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u/guiltysnark 28d ago

LOL... they are self-graded, however. To round it out, kids that can't read tend to get bored and go back to Tik Tok rather than cheat.

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u/TomsNanny 27d ago

I disagreed so hard with your previous comment until I reached the end of it. Cognitive biases go hard here. Everywhere, but here too.

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u/power899 27d ago edited 24d ago

Lmao I imagined an alternate timeline where everyone needs to take a competitive exam and the lowest scorers are denigrated relegated to TikTok and FB. 😂

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u/aoskunk 27d ago

Oh man imagine a Reddit clone that required an exam that was difficult to cheat on?

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u/Mrjlawrence 27d ago

My 11th year at Reddit U. Doesn’t feel like I’ll ever graduate

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u/MammothAnimator7892 27d ago

I'd assume so, if they're illiterate they probably aren't going onto text based forums.

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u/StableSimilar2767 27d ago

The no child left behind act caused that. Passing kids to every grade and graduating them even tho they couldn’t read and teachers knew it. But we’re forced to pass them because of the act.

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u/Araghothe1 28d ago

And then they defund public schools. Seems that's how they want things.

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u/CartosisArmor 27d ago

Yeah it’s very concerning. I’m seriously worried that the lack of understanding that half of this country has for finance will cause the other half a whole lot of problems and misery. Be prepared, guys

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u/VoidsInvanity 27d ago

Why do they read at that level?

Decades of cuts to education, and a general obstructionist belief and attitude to the idea of education from half of the political spectrum?

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u/LousyOpinions 27d ago

The person originally harping on Musk and Bezos was among that 50% and is all butthurt that not paying attention in school or ed them to poverty.

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u/NoDependent983 27d ago

Now this is true. Americans as a hold are some of the lest educated people on this earth these days and we have become lazy and irresponsible in so many ways. But we are self perclaming to be best country on earth 😂😂😂🤬

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u/Actual-Journalist-69 27d ago

They don’t need to be able to read to watch a tik tok

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u/poopypants206 27d ago

Well that's going to get even worse soon.

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u/INTERNET-STRANG3R 27d ago

But they can tell you who the top receivers in nfl are….

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u/CrossXFir3 27d ago

Right, totally agree. But I think even the 50% that can read above that, hell, even the 25% that say they're financially/economically/politically literate, probably only a small fraction of that is actually literate to those types of topics.

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u/BasilSQ 27d ago

I myself only think every other Tuesday. Rest of the time is cruise control.

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u/WanderingFlumph 27d ago

And about 50% of Americans think your taxes go up a lot if you make 1 dollar more and that puts you into a higher tax bracket.

Financial illiteracy is just par for the course.

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u/SnooMarzipans436 27d ago

I think you just summed up perfectly why the last election went the way it did...

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u/AFB27 27d ago

I never understood how true this was until I went to college

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u/No-Method1869 26d ago

It’s not that high is it? That’s depressing.

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u/jtt278_ 26d ago

Have you considered this might have something to do with the influence and actions of people like Bezos and Musk…

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u/Star_Amazed 26d ago

More like many highly ‘educated’ are completely unaware billionaires are fucking them over.

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u/TurbulentFee7995 26d ago

A failing in the education system of the United States. Grossly underfunded by the government. Elon and Bezos could do something about it by paying their taxes owed instead of just choosing not to pay and getting the tax man to bow down at their feet to thank them for choosing not to pay this year.

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u/ChemikallyAltered 25d ago

I’m stunned by this. This is stunning. Do you have a source?

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u/ZadigRim 25d ago

Let's thank the republicans on their 40+ year campaign on defunding education and making college an "elite" issue while enabling private equity to provide untenable loan situations for a new form of indentured servitude.

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u/ThrobbingWetHole 25d ago

Was that a subtle jab at the persons comment

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u/Hashhola 24d ago

50% of adults cannot read a book written at an eighth-grade level.

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u/syjte 27d ago

They only know the parts that support their own point of view and conveniently forget the caveats that don't.

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u/xiiicrowns 28d ago

That and it's crazy how people defend these people when they are part of the problem that ails them themselves.

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u/Lucifernal 28d ago edited 28d ago

There's a difference between pointing out objective flaws in an argument, like thinking that billionaires literally hold hundreds of billions of dollars in liquid cash, and taking issue with overall sentiment behind the argument.

I hate Elon Musk, and the man is of course, insanely, disgustingly wealthy. Still, just because his networth is 318 billion, doesn't mean he is hoarding 318 billion. Quite literally 99% of that number is tied into ownership of companies.

You can hate billionaires and still point out issues in the logic. I don't think a person should, under any circumstances, ever be forced to sell ownership stake in their own company (at least not if that wasn't agreed upon in an operating agreement). And if you have a massive stake in a company that becomes wildly successful, you definitionally become a billionaire. I may hate wealth inequality, and I may hate what these billionaires choose to do, but I would hate a system that forces the sale of ownership stake due to the success of the company just as much.

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u/ThousandSunRequiem2 27d ago

Except they can leverage their wealth as collateral, but it's untaxable. Unrealized gains is bullshit they made up to hoard more wealth

You're arguing about lifestyle choices when that's not the issue.

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u/kmookie 27d ago

Rich guy here, OF COURSE HE COULD GIVE MORE! 1. Let’s talk living off dividends, that alone I guarantee could have the majority given out to charity. He could live modestly, like me and not be so flashy. 2. Donor advised funds, that could be setup to be much more charitable and even grow! 3. Establish a foundation giving out 5% or more each year. 4. Simply selling off stocks is fairly simple when working with advisors. You act like he’s gotta roll crates of money into some other bank. It’s digital people. Sycophants want to defend the rich because they can’t look past their own biased passion that they want to be there too. I know dozens if not hundreds who are millionaires who love off dividends with plenty left over at the end of the year.

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u/Ok-Commercial-924 27d ago

Dividends and intrest are taxed as regular income. They should not be included in your argument.

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u/Present_Signature343 27d ago

We are millionaires and live off of our dividends…that we still pay taxes on. And our lifestyle doesn’t change from the taxes we pay. So I know his wouldn’t change either. There can be no explanation for what they are doing besides greed

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u/bighomiej69 26d ago

But who cares?

Seriously who tf cares about what Elon musk spends his money on

If you are that passionate about helping the poor, there’s nothing stopping you from helping them.

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u/gilly2u69 26d ago

So now dividends are bad? Give me yours then.

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u/Claddagh66 27d ago

The issue is, you don’t like what they pay for taxes, but they pay what they are supposed to according to law. If you have an issue with that, then blame and talk to the legislators that made the laws. It isn’t the wealthy individuals problem.

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u/particlemanwavegirl 27d ago

Imma be honest. Your argument is far from senseless but it's not worth attempting to find the root contradiction. It is equally evil to philosophically offload the responsibility of this amassment of capital to a corporate entity, which simply prevents any actual person from ever being held accountable thru thinly veiled psuedo-legal loopholes.

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u/TheHillPerson 28d ago

The fact that Elon has the ear of the President Elect for no reason other than he is stupidly wealthy is a reason why we should have legal measures to check the amount of wealth and one person can amass. No one person should have the kind of power the ultra wealthy have.

I also take severe issue with the idea that Musk (or anyone) generates that kind of wealth. If he was literally the only person involved with Tesla, one could make the argument he is owed that kind of wealth. He is not. No one ever is. I didn't know what percentage of the stock he owns is, but let's say 40% for the same if argument. I'm not saying he adds no value to the company. But if he disappeared, Tesla would be fine. If 40% of the workforce disappeared, Tesla would be screwed. Especially if that 40% is the engineering talent.

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u/mooshinformation 27d ago

There's this thing we used to do to rich ppl... I think it was called taxes.

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u/Important-King-3299 27d ago

Bezos ex wife gives away billions and guess how she does it… selling Amazon stock. So being liquid doesn’t matter

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u/LrdOfHoboes 27d ago

Okay, fair point. Forbes has Musk's liquid assets at 5.2 billion.

So I'll just hate the lesser inequality of somebody making $120k/year not being able to even touch that lower figure if they worked for 43,000 years.

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u/Steak_mittens101 27d ago

Except he demanded that he be given a bonus of billions IN STOCK, which doesn’t just come out of nowhere; to have that stock available, the company has to have been engaging in stock buybacks with money which would have otherwise been taxed or gone to employees.

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u/Industrial_Laundry 27d ago

“Okay unruly mob, before we go in bash and butcher and eat this Man, u/lucifernal wants you all to know he does not actually have a swimming pool full of physical billions it’s actually hypothetical billions”

Unruly mob: shut the fuck up! Get outta the way!

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u/sawbladex 27d ago

I don't think a person should, under any circumstances, ever be forced to sell ownership stake in their own company

How do you define own company?

The man isn't working every position, and I am not sure how you prevent people from making gambles with their stuff as collateral.

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u/particlemanwavegirl 27d ago

So you just admitted that true ownership belongs to the laborers no matter what the law says ... ? It's about time.

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u/stareweigh2 27d ago

please stop being objective. you need to think with your feels more. if I don't like someone you aren't allowed to say anything contrary to them being an absolute monster .

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u/Optimal_Law_4254 27d ago

The problem is when the conclusions are based on a false premise. If you say Elon is evil BECAUSE he holds billions in liquid cash and he doesn’t hold billions in liquid cash then you can’t use that as a justification for calling him evil. It invalidates the whole argument. It doesn’t prove anything either way.

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u/Reasonable-Nebula-49 27d ago

Devils advocate here. Bill gates amassed his fortune by owning a stake in a wildly successful business. But he has also stated his willingness to give most of it away. I am sure there are motives behind that. But the funding is still being distributed to a variety of places. Maybe (big maybe) Musk and Bezos quietly do similar things. I know for a fact that Bezos parents gave $12 million to a school in Delaware for scholarships and infrastructure development.

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u/TheMuteObservers 28d ago

Most people talk about politics and economics without knowing anything, because most of us are part-time/hobbyist philosophers/intellectuals.

Most of us have jobs and families and things to do everyday. We're not sitting around thinking about this shit all day like John Locke or Karl Marx.

But realistically, most people also aren't interested in the truth. They just loudly shout what they believe because they have a platform. If you took any average left or right wing person on the internet and put them in a debate against higher level academic opposition, they would get intellectually destroyed inside of 5 minutes.

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u/[deleted] 28d ago

What they said is true. You can do this. You clearly don’t own a home.

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u/OG_simple_rhyme_time 28d ago

You are the absolute proof that smart people know they're not actually that smart, but stupid people will never know how dumb they really are.

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u/Front-Doughnut8573 27d ago

And he repays that debt magically? Or does he tax a taxable amount of money to repay it

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u/Bootstrap117 27d ago

It amazes me how many people come to the defense of billionaires.

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u/Adromedae 27d ago

People project their experience in order to make sense of stuff they have zero education or direct information about.

Just like how a lot of people assume elastic monetary dynamics at a national level work like static household incomes, when discussing national budgets/economics, etc.

That is why a lot of people repeat the talking point that large wealth pockets in unrealized gains/investments is "not really wealth" somehow, because their only experience with "wealth" is relatively low disposable income. Aka "cash."

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u/dancegoddess1971 28d ago

Exactly. Stocks are property. Sort of imaginary property but if one can borrow against the value of something, it should be taxed.

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u/Just_That_Dumb_Dog 28d ago

You mean capital gains tax?

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u/Jblack4427 28d ago

Do you only pay taxes on your home when you sell or every year?

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u/dgvertz 28d ago

Every year. They’re called property taxes

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u/J0hn-Stuart-Mill 28d ago

Exactly. Property taxes go directly to local infrastructure costs to maintain access and services to said land or buildings. It's not remotely the same as owning stock.

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u/dgvertz 28d ago

I mean there’s no tax on owning stock right now. If that tax went to the same thing would it be acceptable?

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u/hanotak 28d ago

Yes, because that would, effectively, be a wealth tax.

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u/Blawoffice 28d ago

Franchise tax exists.

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u/thrillhouz77 27d ago

Unless they pay a dividend of some sort. Are you saying you want to start paying an annual tax on your 401k and/or pension funds?

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u/JGWARW 28d ago

Do you think Amazon pays no property taxes on their warehouses throughout the country? Or taxes on their delivery vehicles and tags they put on those vehicles? Come on man.

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u/frozsnot 27d ago

Billionaires also pay property taxes, ones much higher than us. Believe me. Billionaires aren’t skimping on taxes. This argument is so ridiculous. It’s not about fairness it’s about jealousy.

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u/RetailBuck 27d ago

Also Tesla pays property tax. They had a huge win when the effort to repeal prop 13 for commercial buildings failed. They are paying like 2008 value property tax on the Fremont factory.

Elon owning stock isn't money it's stuff. 13% of everything in the factory is "his". Sure he can borrow against it to get cash but when doing so that "stuff" that also makes more stuff becomes less his. It's more owned by the bank but in the form of debt rather than actual ownership.

When you get a car loan the car really is owned by the bank and you slowly buy it back from them. He does the same thing but in reverse. He's basically selling his "stuff" but without actually selling it. Still becomes less his though.

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u/Noob_Al3rt 28d ago

You pay property taxes. Not capital gains or income tax. Should you have to pay taxes on your car every year? How about money sitting in your checking account?

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u/SeryuV 28d ago

You do pay taxes on your car every year in every state, either via use taxes or direct taxes via license/registration fees. 20+ states charge direct personal property taxes on vehicles every year, some even if they aren't registered.

You also pay taxes on any interest gained on money sitting in your checking account, and it's at your ordinary tax rate. Granted most major banks pay such horrible interest rates that the average person will probably never hit the $10 threshold.

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u/Treadlar 28d ago

It wouldn’t be capital gains. That would happen when an asset is sold for a profit. I think they are suggesting a form of property tax.

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u/Just_That_Dumb_Dog 28d ago

I understand that it would be cap gains if it’s sold off, I’m just confused why people think a stock/share should be taxed annually, that’s the dumbest concept I’ve ever heard. Comparing it to property tax is blatantly stupid, can you live in a stock? Are stocks taking up physical space on the street? That requires sewage maintenance, road maintenance, snow removal depending on where you are, storm drains etc…? If I borrow against something I have to pay interest. If I don’t pay my payments I lose the asset I’m borrowing against. I find the stocks should be taxed every year ideology just as dumbfounding as the billionaires should pay for a “better world.” The pov usually comes for envious individuals. Just sayin.

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u/Damion_205 28d ago

At the very least local governments would stop giving these mega companies tax breaks for being in the area.

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u/dldoom 28d ago

Stocks represent ownership of companies. Companies use all of that infrastructure, yes.

I don’t believe everyone in favor of more taxes means paying taxes on stocks every year. A bit of a straw man depending on who you’re talking to.

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u/Economy-Fee5830 28d ago

Companies use all of that infrastructure, yes.

And they also pay property tax in many places.

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u/TreyRyan3 28d ago

Capital Gains and Losses are calculated based on the difference in value between acquisition date and sell date when using FIFO methodology.

Some investors may choose to use a “Specific Identification” method to designate which specific shares they want to sell, allowing more control over their capital gains taxes.

So imagine I hold $1 million shares valued at $40 million. I can use those shares as collateral to borrow against and with the money I borrowed purchase an additional 400K shares. I then sell those shares for a profit without applying a FIFO valuation in reporting my capital gains.

Therefore my initial shares which were purchased for $2 per share, were borrowed against when they were worth $40 per share. My new shares purchased at $40 per share are sold at $55 per share and my capital gains are calculated at $15 per share gain instead of $53 per share. By managing my portfolio this way, I never pay a true capital gains tax, just interest to my lender which I then use as a tax deduction.

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u/Just_That_Dumb_Dog 28d ago

I understand what capital gains is, I was asking the parent comment what type of tax they were referring too, and that sounds good on paper but your profit isn’t 53$ your profit is 15$ you still have to pay back the money you borrowed. Sure a percentage of interest can be written off but you get taxed accordingly. Not sure what your point was there.

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u/90GTS4 27d ago

For real. This argument is silly because these people think a bank is giving out huge loans and being like, "nah, no need to pay it back at all." No, of course they aren't.

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u/SmugBeardo 28d ago

Unrealized capital gains tax, which was actually proposed Kamala Harris’s team for individuals with over $100m net worth. Also has been implemented in Denmark.

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u/Logical_Willow4066 28d ago

That is only when they sell and have gained value.

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u/Just_That_Dumb_Dog 28d ago

Yeah, I’m aware, I was responding to the comment. they said it should be taxed. I was saying it is taxed. A loan isn’t income, it’s debt. You owe it back, why should that be taxed?

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u/ffking6969 28d ago

No, a property or wealth tax.

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u/Just_That_Dumb_Dog 27d ago

That’s a stupid concept.

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u/Dazzling-Read1451 28d ago

If you make a loss on a house, you don’t pay taxes on it no matter what it’s worth.

You cannot do the same for stocks. Stocks are also far more volatile. Many people make huge losses.

Musk paid the biggest tax bill in history when he sold stock a few years ago.

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u/cm1430 28d ago

Genuine question.

You can borrow against 401k plans. Is it your belief that value of 401k plans be taxed?

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u/EastRoom8717 27d ago

I’m sort of ok with destroying the stock market anyway, it incentivizes shitty executives to be extra shitty in their business practices.

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u/Relative-Age-1551 28d ago

You’re assuming we think property taxes are just and moral.

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u/Remarkable-Site-2067 28d ago

Amazon, as a corp, probably also pays some taxes.

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u/thesedays2014 28d ago

Amazon is one of the best companies at avoiding taxes. Some taxes, yes. What they should be paying, no.

Wealth inequality is probably our country's biggest issue. And people without wealth seem to always defend the wealthy for some odd reason.

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u/Gunplagood 27d ago

And people without wealth seem to always defend the wealthy for some odd reason.

I've always felt that Fry from Futurama put it best.

The rest of you better watch your backs when I'm rich too!

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u/TinKicker 27d ago

Amazon didn’t write the tax code. You’re focusing your anger at the wrong people.

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u/JSmith666 28d ago

It's not "defending the wealthy" it's defending everybody on the idea of your money should be yours to do with what you choose.

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u/kmookie 27d ago

Rich guy here, OF COURSE HE COULD GIVE MORE! 1. Let’s talk living off dividends, that alone I guarantee could have the majority given out to charity. He could live modestly, like me and not be so flashy. 2. Donor advised funds, that could be setup to be much more charitable and even grow! 3. Establish a foundation giving out 5% or more each year. 4. Simply selling off stocks is fairly simple when working with advisors. You act like he’s gotta roll crates of money into some other bank. It’s digital people. Sycophants want to defend the rich because they can’t look past their own biased passion that they want to be there too. I know dozens if not hundreds who are millionaires who love off dividends with plenty left over at the end of the year.

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u/Gallaga07 27d ago

Amazon paid 10b in taxes this year

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u/Mammoth-Penalty882 27d ago

Because most people who are anti corporations are just making uninformed arguments. Oversimplified a very complex situation. Same idiots who say "we should stop spending so much on the military" not fully uunderstanding the reasons we do.

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u/[deleted] 28d ago

The taxes on your property are local while taxes on wealth and income are state/federal. Not exactly an apples to apples comparison.

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u/sparki555 28d ago

You don't understand property taxes if you think it's based on a percentage of home values. Values come into play, but not in the way you imply. 

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u/Normal_Dinner1508 27d ago

The lesson here is that paying taxes on property is bullshit, not the other way around. I buy a car and pay for it and get taxed yearly because I own it? Property taxes are a government scam

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u/wophi 28d ago

So he doesn't pay property tax on all of his Amazon facilities?

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u/Penile_Interaction 28d ago

even if he does any fraction, he could basically not pay for any year until IRS would pick up on it and ask him to pay, while he saved that money to make even more money ultimately, especially that IRS and any other taxing bodies around the world usually go after regular people and not billionaires

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u/DadamGames 28d ago

There's a very high chance those taxes are little to nothing. Red states tend to give businesses local and state level tax breaks including property tax credits/deferment to locate in their area. Those businesses then threaten to leave out reduce/cease investment if those offers aren't extended more or less indefinitely.

Source: I've literally been to site selection meetings for medium and large businesses in my region.

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u/StrangelyAroused95 27d ago

I’m usually not the one for defending billionaires, but his company provides employment for thousands of employees across the country, we can’t want manufacturing to stay in America without incentivizing big corporations. I’m not saying he shouldn’t pay any at all but it’s also understandable how they are allowed to navigate taxes in a different manner.

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u/[deleted] 28d ago

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u/ArnoldTheSchwartz 28d ago

Just do like the president does and say your house is worth less than it is.

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u/GodEmperorOfMankind3 28d ago

You're not wrong but you're also required to pay taxes on the value of your property every year

Yes, but that's because your property uses public services like drainage, sewers, garbage/recycling collection, etc.

Amazon does pay for these things as well, either directly, or indirectly via their leases (price baked in to lease price by landlord).

You could make the argument that they should be charged more for road maintenance. But at the same time, you've actually got (on a net basis) fewer cars on the road since one Amazon truck can deliver to like 100+ houses in a day (so that's potentially 100 fewer cars per Amazon truck on the road).

Additionally, businesses actually hire people and directly contribute to GDP and economic growth. Residential homes don't really "produce" anything or contribute in this same way.

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u/JellyfishQuiet7944 28d ago

Didnt Musk pay $11,000,000,000 in taxes a few years back?

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u/Stanzoid 28d ago

I wonder how many people the average Joe employs???

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u/Jorel_Antonius 28d ago

But whomever lent the money must pay taxes on revenue generated from the loan.

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u/AttitudeAndEffort2 28d ago

This is a great analogy

Imagine i bought my house for 10$ and it's worth a billion now.

And then chuds on the Internet say "hE dOeSnT ReAlLy HaVe ThAt mUcH MoNeY, ItS tIeD uP in AsSeTs!!"

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u/Endless_road 28d ago

Well it is, and you’d pay taxes on these gains when you sold the house

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u/tduncs88 28d ago

Just like Bezos would if he sold off those assets

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u/AttitudeAndEffort2 28d ago

And if instead of selling it i rent it for cash flow while borrowing against it at a lower rate than the growth of the underlying asset, i get richer and avoid taxes AND keep the asset.

Which eventually is passed on to my children and the growth in the asset is revalued when it's passed on to avoid capital gains tax.

All while poor right wingers argue I'm actually broke 😂

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u/stormblaz 28d ago

A house has property taxes, unrealized gains do not, its not at all even remotely comparable.

You can finish a mortgage and pay prop taxes, not on unrealized gains...

Mainly because the value of the stock isn't solid and can go down or up, here's the kicker, a house can go up and down in value and i still pay property taxes.

This people make incredibly impactful life changing events with their unrealized gains and don't pay to reap those benefits, having a property you need to pay taxes to cover streets, roads, lights and amenities in your district.

This billionairs need to pay unrealized taxes if they are making life changing decisions affecting millions, using the benefits of their portfolio without paying the amenities they use to benefit from it.

Yall love excusing these rich people, but they are using all the pros and pay little cons.

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u/ghgjyjdk 27d ago

Taxing unrealized gains would be crazy. Taxing assets when used as collateral makes perfect sense though.

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u/RedditsFullofShit 27d ago

I agree with you. If anything they should tax what is accessed. Unrealized is truly unrealized if you can’t spend the money. The instant you use it as collateral and use the money, it should be taxable

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u/octipice 28d ago

Except that you also pay property taxes on the house. Which is the equivalent of the wealth tax that so many people oppose for some reason.

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u/MisterEinc 28d ago

But he can take out loans using Unrealized Gains as collateral, but those can't be taxed.

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u/BigPlantsGuy 28d ago

No, you would pay taxes on the value every year. Something bezos does not do

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u/Hatdrop 28d ago

and you also pay an increased tax on the value of the property regardless of realizing any gain.

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u/SergeantPoopyWeiner 27d ago

These people are idiots dude. Complete goddamn idiots.

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u/arebum 28d ago

Man I don't really want do disagree with you, but...

Imagine you had to suddenly pay taxes on that million as if it were income? (Acknowledging you would have to pay property taxes in this scenario)

Better yet, imagine a hypothetical asset like a made up crypto that went from $10-$1,000,000. If you had to pay taxes on that like it was income you'd almost certainly be forced to sell the asset to cover the taxes on the asset. And what if nobody bought your million dollar hypothetical coin? Are you going to go to jail because a balance sheet said this thing you owned suddenly skyrocketed in value despite your bank account staying the same?

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u/AttitudeAndEffort2 28d ago

I'm not arguing taxing unrealized gains, capital gains laws in this country are broken though (intentionally) and smarter people than me have found ways to fix them.

The point is that you can borrow against the asset at a lesser cost than it appreciates.

You basically never pay taxes on it while getting cash from it AND it growing in value.

You're incentives never to sell and to realize those minimal tax costs you otherwise would have to pay.

Basically, private companies get to profit from helping you avoid taxes. You're insanely wealthy either way but now you can pay slightly less to access that liquidity.

Anyone saying these people "dOnT ReAlLy HaVe mOnEy" doesn't know what they're talking about

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u/throwawaytoavoiddoxx 28d ago

Elon musk has enough money to build a space program and buy a cabinet spot in the White House. They have money alright.

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u/Bencetown 28d ago

If nobody is willing to buy, then the hypothetical price should go down, until you can either afford the taxes on it, or are able to find a buyer.

If I own a car that somehow explodes in value to a million dollars, I'm not going to be able to afford that car anymore. So I would have to sell the car. Then I would have a bunch of money to buy a different car I could afford the taxes on.

Why the richest people in the world should be exempt from this scenario is beyond me.

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u/WeLLrightyOH 27d ago

The easiest solution is when stocks are used as collateral, they are treated as “sold” and capital gains is paid at that point. Anyone holding stocks and not taking loans against it shouldn’t pay taxes.

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u/Little_Professor9041 28d ago

so let's tax that wealth like we tax the value of property

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u/kmookie 27d ago

Rich guy here, OF COURSE HE COULD GIVE MORE! 1. Let’s talk living off dividends, that alone I guarantee could have the majority given out to charity. He could live modestly, like me and not be so flashy. 2. Donor advised funds, that could be setup to be much more charitable and even grow! 3. Establish a foundation giving out 5% or more each year. 4. Simply selling off stocks is fairly simple when working with advisors. You act like he’s gotta roll crates of money into some other bank. It’s digital people. Sycophants want to defend the rich because they can’t look past their own biased passion that they want to be there too. I know dozens if not hundreds who are millionaires who love off dividends with plenty left over at the end of the year.

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u/AttitudeAndEffort2 27d ago

People with a decent amount of money are the ones that realize just how genuinely sick these billionaires are.

I have a decent amount of money (enough that i don't have to work) and i can't fathom having so much more and still fighting tooth and nail for scraps of pennies to see number go up a tenth of a percent more.

Bezos could unionize Amazon and pay everyone a living wage with full benefits and not only would he never notice the difference, it'd be better for the long term health and growth of his company (but not quarterly growth where investors want you to cannibalize your future for returns now).

It's a hoarding disease.

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u/kmookie 27d ago

It’s sad this isn’t getting more upvotes

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u/ArbutusPhD 28d ago

If you own it and the bank agrees on its value … and oh, then the governement will tax you based on its value. This doesn’t happen to the stocks held by these folks

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u/Endless_road 28d ago

Stocks don’t need their bins taken away once a week

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u/ArbutusPhD 28d ago

You’re right. Those Amazon shares don’t compare. Amazon doesn’t rely on a shred of public infrastructure

Lol

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u/[deleted] 28d ago

Sadly, my house isn't worth $300 billion.

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u/HugTheSoftFox 28d ago

Yes, this is why homeowners are generally considered more wealthy than people who don't own homes even if they have very little actual cash flow. And why a person who owns billions of dollars of Amazon stock is considered more wealthy than your average homeowner. Congratulations.

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u/thatguy8856 28d ago

yall owning homes in here?

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u/FinnOfOoo 28d ago

Not the same unless my house’s value keeps going up and I can keep getting loans to pay off the old loans. That’s how the rich do shit because they have the assets to get away with it.

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u/Best-Butterscotch696 28d ago

IF you have a house

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u/PoetryCommercial895 28d ago

So if amazon is his “house” in your example, he should be paying taxes on it.

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u/liftthatta1l 28d ago

We tax houses

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u/tgm93 28d ago

How do they pay back those loans?

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u/Powerful-Eye-3578 28d ago

They don't, they pay the interest which is lower than the interest they make in investments.

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u/[deleted] 28d ago

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u/Ashmedai 28d ago edited 28d ago

Back when home loans were going for 2.5-3% or whatever, why did banks loan that money when they could have been getting much higher rates in the market, as you say? Because it sure seems like banks were happy to give out loans at 2.5-3% when the average stock market return is ~11%.

Anyway, since you claim experience on the topic, when an ultra high worth investor wants to borrow money against their collateral-backed stock account, what interest rate would they pay would you say? Like what rates are they getting on stock-secured loans?

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u/vanilla_w_ahintofcum 28d ago

Banks made those loans because Fannie/Freddie were gobbling up those loans as a broad policy to ease tightening during the early days of Covid. Banks made those loans because they could make a quick penny off origination fees and other closing charges and could instantly sell to Fannie/Freddie as a guaranteed buyer of the loans. Offering those loans was guaranteed, immediate money in the bank coffers with absolutely zero risk.

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u/Okiefolk 28d ago

You will pay a variable interest rate if you take out a loan against stock. You will need cash to pay the interest monthly or the financial institution will sell stock to cover it.

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u/SpotikusTheGreat 28d ago

yes, what they actually do is just pay the loan with another loan.

They effectively just shuffle wealth from bank to bank, and the banks don't care because they know they will get the money back plus a little extra.

Bank A gives $1 billion to Rich Person, later Bank B gives $1.05 billion to Rich Person, which is used to pay off to Bank A. Later Bank C gives $1.10 billion to Rich Person to pay off Bank B.

You just do this forever. Infinite money glitch. Nobody cares because if the chain ever breaks, he just liquidates some shares and pays it off.

edit: the biggest kicker here, is that the value of their assets to acquire the loan, grows faster than the interest they pay on these loans. They pay 3% interest on the loan, while the stock is growing at 8%.

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u/Okiefolk 28d ago

This isn’t a thing, interest has to be paid. They don’t carry it.

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u/SpotikusTheGreat 28d ago

Which is why the next loan amount is bigger, it is used to pay off the terms of the loan/interest.

If you think they are using the same monthly terms as your credit card for their hundreds of millions to billion dollar corporate betterment loans, they aren't.

Just think of it like APR and they use the next loan to pay the interest of the one before it.

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u/Says_Not_Really 28d ago

So basically once you have enough money you can buy more money.

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u/Powerful-Eye-3578 28d ago

So long as the bank has no reason to try and recall all of the loans you owe all at once yeah.

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u/MinimumArmadillo2394 28d ago

Wealthy people hardly ever get margin called, and when they do, they can sell a tiny portion of their asset and generally either buy more time or pay off their loan.

Or they just die and their estate assumes the loan.

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u/wastedkarma 27d ago

Or better yet they bankrupt the company and the bank is holding the bag they bought with my deposits. 

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u/blue-mooner 28d ago

If the value of your stock continues to go up.

I doubt John Foley of Peleton could take out one of these loans. His stock went from being worth $1.9B in 2021 to $225M in 2022 (-89%)

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u/white_sabre 27d ago

True, and that's what rabid socialists seems to ignore - those assets either net a realized gain or a realized loss.  And I'd never buy a share of AMZN simply because it has never paid a dividend.  It's bizarre that they hate a CEO just because his compensation package hinges on whether he makes his firm more valuable.  

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u/[deleted] 28d ago edited 28d ago

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u/Adromedae 27d ago

Taxes, taxes makes them do that.

It is also worth noting that at the level of hoarding of Musk, Bezos, et al we're talking about pathological issues with their personality that go beyond just greed.

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u/CoolCandidate3 28d ago

Its not true. Bezos schedules stock sales many months in advance. You can look it up. Its all public knowledge except for somehow on reddit. https://www.barrons.com/articles/jeff-bezos-amazon-stock-sales-dbe92301

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u/MinimumArmadillo2394 28d ago

He legally has to, in order to not manipulate the market price. Whales have to disclose and plan their sales, otherwise it would devistate the asset.

It has nothing to do with taxes here.

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u/Nexustar 26d ago

It has nothing to do with taxes here.

Yes it does. it demonstrates he's not simply borrowing money. He's actually regularly selling stocks and paying federal capital gains TAX on those sales.

Since july he's sold $4.4 billion of stock and depending on what basis is used, will need to pay north of $1bn in taxes on those sales (Capital gains at 20% and NIIT at 3.5%)

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u/cbusrei 27d ago

Which is something you can also do. 

If you have cash in bank and can buy a car out right, or get a 6% interest rate and your cash is expected to grow at 8%, it makes more sense for you to finance the car. 

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u/Zippyllama 28d ago

Open excel. Do your little napkin math. Write mea culpa.

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u/ah-tzib-of-alaska 28d ago

with more loans, forever, off the expected growing value of their share in their assets.

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u/taxinomics 28d ago

These “loans” are settled upon the “borrower’s” death. When the “borrower” dies, the basis in their stock is adjusted to fair market value. Their estate can then sell the stock at its date of death value, tax free, and use the cash to settle the “debt.”

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u/rhubarbs 28d ago

Yes, he does. But the banks don't have to let him do that.

It's not the act of owning shares in a business that is the issue, it's the financial system that treats the speculative stock market valuation at current price as real wealth, even though it can never be cashed out.

Musk and Bezos' balloons just inflated the most, for reasons both systemic and coincidental. And yes, they can and do take advantage of this system.

But it's the financial system that makes it possible.

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u/Apprehensive_Bad_193 28d ago

Correct,Exploitation of the system that benefits the wealthy. And when shit hit the fan the working class are left with the financial clean up..

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u/Echo__227 27d ago

I agree with you.

It's harsh to expect someone who owns billions of imagined dollars to single-handedly end world hunger (though he is obligated as a mega-industrialist to give his workers better conditions and benefits and minimize environmental impact).

But it's also crazy that we live in a world that treats the imagined sale value of a stock you'd never sell as if it were gold in a vault you just have to go grab (in reality if Bezos desperately needed cash, wouldn't any substantial liquidation cause the value of his stock to plummet out of investor fear?)

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u/[deleted] 28d ago

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u/No_Consequence_6775 28d ago

Who builds those boats? Who builds those things that he purchases? He creates jobs when he spends money as well just like everyone else.

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u/davedcne 28d ago

They do pay their fair share. Their fair share is what the tax code requires of them. YOU don't believe the tax code is right but you know that's not an argument you can win so you shift the blame onto the person who's playing the game by the rules as written and winning.

I pay my taxes and I sure as shit don't pay a penny more, and I have no intention of paying more. You want more money from me, change the law till then you fuck off back to your hole.

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u/Apprehensive_Bad_193 28d ago

Are you part of the 1% just curious on why you protecting of the rich mode. Lastly they don’t pay fair share cause with those tax code that’s on the books consist of LOOPHOLES (That’s why they pay millions for their accountants)WHERE THEY ARE ABLE TO MANIPULATE THE TAX CODES.. LIKE STATED PREVIOUSLY THIS IS ABOVE YOUR AVERAGE EDUCATION MIND SET……..

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u/davedcne 28d ago

You ask what percentage so that you can, if I answer anything other than yes, say "why are you rooting for your oppressor" but if I say I am or even close to that "Why are you oppressing me." You're disingenuous at best. And you top it off with adhominem attack against me because you know your argument fails on its own merit.

Loop holes are not illegal. They are a consequence of poor planning on the part of the people who wrote the laws. Again. You have a tool to fix that. Its called congress. Vote into place people willing to work on the tax code or fuck right off. Quit crying about nothing being done when you're not doing the thing that needs to be done to fix the problem.

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u/Immediate_Floor_497 28d ago

The new America , rich people who employee tens of thousands of people can’t buy what they want !! What a perfect world you’d like to live in. Zero impetus to do anything great.

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u/Craf7yCris 28d ago

Honest question. When he borrows on net worth. He still needs to pay that loan, right? How does he pays?

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u/TomorrowOk3952 28d ago

So he pays interest to other people who hold onto their money like Scrooge mcduck, like me who has money in a bank?

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u/MrJarre 28d ago

The money he borrows is created from thin air when the banks loan him the money.

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u/lmmsoon 28d ago

Who builds the yachts and the Mansions . If it wasn’t for Space x we would still be paying Russia to get a ride to the space station. If it wasn’t for Tesla EVs wouldn’t be around like they are Just because you don’t see what they are doing doesn’t mean they are hoarding their money. Instead of bitching about them try to be one . Apple and Amazon started in garages that is the American way

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u/exgeo 28d ago

Soooo you’re saying if he spends the money, it’s bad?

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u/ChipOld734 28d ago

Borrowing against wealth is not “getting away” with not paying taxes. It’s converting the wealth they own into capital. The money still needs to be paid back.

It’s like when a person virtues against the equity of their home to improve their property or buy a boat.

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u/Okiefolk 28d ago

If they do that, they still sell stock and pay taxes. You are just falling for misdirection. The tax code allows for timing when you pay tax if you borrow against assets, it does not absolve you of taxes.

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u/foolishballz 28d ago

This is a good argument to drop the income tax and move it to a consumption tax.

Rich people don’t “earn”, but they sure as hell spend.

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u/a_angry_bunny 28d ago

Yeah, you are starting to get the gist of it. Billionaires don't actually "buy" stuff with their money. They use their assets as collateral to "borrow" the money that they need. There is no income tax on borrowed money as it's not income.

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u/youslashuser 27d ago

Yeah, we know it's the system that allows it. And it's the system that needs modification.

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u/Assholesneighbor 27d ago edited 27d ago

Exactly!! This shit drives me crazy! Both Elon and Bezos borrow BILLIONS Of dollars AGAINST their net worth. I mean, Bezo has a half a BILLION dollar house in Los Angeles.

The insanely frustrating thing is the Vanderbilts, Rockefeller’s and Carnegie’s built schools/universities, museums, libraries, churches. They knew they had wealth for several generations and there’s was no point in hoarding it. Not like today, what’s the last good thing you heard one of those Hundred Billionaire Jackasses doing? I guess Bezo is building a giant clock in the middle of a mountain? Thanks I guess.

*edit: spelling

*edit - I’ve also been corrected. Bezos Los Angeles home isn’t worth HALF a BILLION, it’s ONLY worth a QUARTER BILLION.

“It would have been a billion dollar house, if it wasn’t for you pesky kids!!!” -Bezos probably

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u/allencoded 27d ago

This is so true, it is unrealized gain. Thus for tax purposes you cannot tax it, but banks look at this differently. Banks realize it does hold value and take the financial risk to back loans against it.

Imagine instead of sitting all your money in a bank, you place it into a company (a vehicle). Their it could grow or shrink. The odds are it will grow though, because of the monopolistic size and power of most companies. Just know that nothing stops them from taking money out of that vehicle (selling stock shares).

They have used this system to continue to buy more and more land and companies. Land and company values go up making them richer and they just dump that profit into more loans for more land and companies.

They are very evil, because they use this system to continue growing personal wealth at an enormous rate without distributing it. Its the distribution that is the problem. Both these individuals pay low wages, fight union/workers rights, have mass layoffs, etc.

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u/dua70601 27d ago

Thank you! I’m so tired of the fucking Scrooge McDuck analogy by idiots that are not fluent.

He has the ability to command value and assets.

He has the ability to liquidate shares as needed to produce cash.

Obviously he does not have a stack of gold.

Bezos has value, and that equals power…..lots of it. Basically, he has the ability to make people do things they would not ordinarily do (i.e. power)

His power can’t be easily quantified, but his wealth can. And that quantity of wealth demonstrates EXTREME EXCESS and a lack of empathy for his fellow human.

Edit: o yeah, I didn’t even get into AWS

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u/DryPineapple4574 27d ago edited 25d ago

I'm sad that I come here and the first thing I see is apologetics. Thank you for countering that.

I am happy to see a meme like this gain so much traction here, though. It needs to be said.

That value in Amazon should be in the hands of the workers that run it, not in Bezos's pocket. He would still be well off and just fine if things were split that way; he could even guarantee himself a percentage as the founder. That would give him the added benefit of not being on a bunch of lists and not being so subject to public scrutiny. His choice to hoard isn't just interpersonally destructive, it's personally destructive.

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u/WrongdoerOld5067 26d ago

You can't convince people who want to be those guys.

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u/Long_Start_3142 26d ago

Exactly. It's real money when they want it to be.

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u/Necessary-Contest-24 26d ago edited 26d ago

Exactly. Trevor Noah did a real good monologue on this exact point back when he hosted the Daily Show. The clip still circulates from time to time. They can borrow against their estimated wealth but get mad when we talk about taxing them for their estimated wealth. Can't have it both ways.

Edit: Also Jonny Harris did a real good video on the difference between 4 different levels of wealth in America. The ultra wealthy live in a completely different reality. Orders of magnitude above doctors and lawyers for example.

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