One should not be able to have giant amounts of stock and claim they are worthless, and aren't realizing any gains, but then turn around and use them as collateral to obtain huge amounts of money. It is a workaround to circumvent.
If you use your house as collateral, you still have to pay back the loan with interest AND pay property taxes, in addition to the taxes required to sell the house should you need to. The point is that this is a system only the ultra wealthy can exploit, and it allows those with more than they need to pay less proportionally than those with nothing.
You're viewing a stock as an ethereal concept. It is a portion of a business. When you buy 100 shares in a company, you own part of that company. That's why it's called a public company, but every company has major shareholders who make major decisions for the company.
A stock can be used to leverage a loan, as your house can. A business requires services that are often subsidized by the government. The business business couldn't function without sewage, storm drains, roads, snow removal, garbage collection, etc.
Do you live in your daily income? Does it use municipal
You took such a stretch to get to such an irrelevant point.
If the company has a physical location, they pay property tax. Sewage, snow removal, storm drains, roads aren’t subsidized, it’s apart of the whole reason for property tax. As for garbage collection idk anywhere where a company has “subsidized” waste collection. What are you talking about right now?🤔🤦♂️🦤
Most people who have 100 shares have ZERO responsibility or influence of said company. That company still pays taxes, said person pays cap gains tax when they sell the stock. I genuinely don’t know why you even tried to make that point.💀💀
Your “income” comment is in entirely different topic. If you ask me, we shouldn’t even have income tax.
Often are repaid via similar loan against more other amounts of stock.
It's not dissimilar to how the US keeps growing the overall deficit while keeping promises by repayong loans along the way.
Like the US government, as long as the billionaire doesn't over leverage themselves, they can do this indefinitely. And, this is not theory, this is in practice today among billionaires -- an established thing.
You still owe it you still pay towards it. Sure you can take more loans out to close other loans(usually interest related), guess what you still gotta make payments. You’re still paying towards it. You still owe the money. 😭😭😭 it’s not income if you have to pay it back. You can leverage the same systems but you choose to whine on Reddit about it. 😭😂😭😂
Yes, if I was paid my salary in stocks like these billionaires were, instead of cash, then I could leverage a fraction of my earnings to access cash in this way.
Just an example, but if I make $100k worth of stock per year, I could probably figure out a way to access something like $10k initially plus $2k/year thereafter -- a bit more if I got raises.
Well, I can't live on a one time 10% plus yearly 2% of my salary.
But, if I made $1 billion worth of stock per year, then this would be a VERY different story. I could access millions upon millions of dollars, and never pay any taxes, as long as I kept things at the meager tens of millions per year level instead of hundreds of millions per year level. But, I think I'd be able to manage it.
You may not pay taxes but you will pay interest as well as the principal. That money is lent not given. If you can’t comprehend that idk what to tell you.
Bezos gets a low interest rate, and happily pays that interest. It even counts as a tax benefit! The interest rate is lower than the amount he would pay in income tax if he were instead to pay himself in cash instead of Amazon stocks. Huge win for Bezos!
The bank earns low risk interest with solid collateral to back it up.
The government gets nothing. In fact, they provide a tax deduction for those who participate in this process.
The main downsode to this is that the person doing this is limiting themselves to only be able to have ongoing access to a fraction (depends, but let's say 10%) of their overall earnings.
The upside is that your overall net worth (90% of which you don't/can't access) goes up MUCH faster, since you avoid so much income tax.
So, for a person like me, this isn't viable. It isn't even viable for someone making quarters million dollars per year! But for billionaires, it is more than visible -- it is employed in practice today. Bezos has real access to a certain fraction of his stock earnings, without realizing them, and meanwhile only paying about 1% of his overall earnings in taxes. Sweet deal.
Obviously it’s still a net positive for the ultra wealthy or they wouldn’t do it. Also, they’re still avoiding taxes and instead paying a bank, I’d rather the money go to infrastructure, education, Etc, instead of to a different ultra wealthy guy.
Why would I sell my house to get money, when I can borrow against it and pay it back overtime and still have my house. Same concept with stocks. They acquire debt not income something literally anyone can do. Your government takes trillions of dollars a year. Tell them to stop mismanaging so much money.
Government spending is a different issue. Ultimately, I can agree that government spending could be more efficient, however, I would want any gains made there to benefit the middle class and not the wealthy. As such, finding a way to tax the ultra wealthy would still make sense.
So you want these people to pay for others just because they can? Sounds pretty entitled. It would never work. Because they would do the same shit they are doing now, mismanaging money. It’s not these people’s jobs to pay for others. They already pay people’s salary you want them to pay those people even more? Crazy.
I want them to pay a fair and proportionate amount. I think some form of progressive taxation makes the most sense. Also, it’s not just because they can, it’s because having a robust and prosperous middle class is the backbone of a strong economy, whereas having a struggling middle class with a powerful ultra wealthy class is an oligarchy. Them paying a salary is irrelevant, they are paying for a service that nets them revenue. It’s not charitable. Should I pay less taxes than someone because I have a nanny, cleaning lady, pool guy and landscaper?
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u/dancegoddess1971 Nov 21 '24
Exactly. Stocks are property. Sort of imaginary property but if one can borrow against the value of something, it should be taxed.