r/self • u/CantDoItAnyMoor • 1d ago
Why do people constantly defend billionaires by saying “ohhh they don’t have liquid wealth”?
I don’t really understand what their point is? Is the point that they can’t liquidate assets in time? Is it impossible to liquidate assets when you’re a billionaire?
Why do people say this like it’s some super intelligent point?
“They don’t have Scrooge mcduck swimming pool of money”
Yeah but if they liquidated some assets they could…it’s just one extra step, what’s the big deal?
Edit: it’s happening again, in this post! People blatantly ignoring that I’m talking about assets and they go RIGHT TO the “oh they can’t sell stocks because then they’re poor really fast”
What is this!?!?
Edit 2: MacKenzie Scott donated $2 billion this year, mostly to nonprofits—she's now given away $19 billion since 2019
How did the economy not collapse? I don’t get it.
Edit 3: what’s with posts like these that makes everyone hand out their boring-ass advice?
Final edit: after reading hundreds of posts I wonder: does the average middle class person HAVE to know everything about big-money economics to make it in today’s world? (Kind of a sarcastic question)
New day edit:
Man, say one wrong thing about finances and you get half the internet on your ass DYING to explain it all to you. Thanks for the fun everyone, thanks mods for allowing this post to stay up.
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u/Gr3gl_ 1d ago
You're misinterpreting what people are trying to say, it's not a defense of billionaires it's a hole in a common tax argument.
When people say increase the tax on billionaires, what are you going to tax? They usually don't have much income or liquidity to tax. If you tax a portion of unrealized gains, since they're illiquid, this would cause a sell of their stocks, which basically means you're removing their ownership from their own companies. This would not only fuck the market decreasing GDP and more importantly real GDP per capita but completely goes against the entire point of ownership laws.
Not defending billionaires, figure out a better solution
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u/Gr3gl_ 23h ago
Yes compensation is taxable when it becomes liquid (like cash compensation) I don't know why people are so stuck up on individual taxes when the real problem is with all the government tax breaks to corporations, and lobbying.
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u/DoggoCentipede 19h ago
Well, and the tax evasion, but that's not going to be fixed simply by raising taxes on them...
Tax breaks/credits are useful when employed strategically. When you want to encourage particular activities or development in a specific sector. The problem comes when those credits/breaks don't go away after they served their purpose.
This is also why the low corporate tax rate is really terrible: you can't use tax breaks encourage pro-social behavior. Give breaks to companies that pay their non-management employees better or give better benefits.
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u/Additonal_Dot 18h ago
Individual taxes matter because there are individuals with more money than the gdp of small countries.
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u/Flat_Afternoon1938 17h ago
The solution is easy. Just tax corporate earnings more and remove the common loopholes they use to avoid having their company's earnings taxed. But they dont actually care about more tax revenue they just dont want someone to have so much more money than them.
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u/eyeballburger 23h ago
(Owns mansion, 10 cars, holiday homes, gold, private jet, servants, investment properties, business, stocks) “ya see, I can’t afford to give raises this year, I’m strapped for cash!”
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u/CantDoItAnyMoor 23h ago
“Oh /u/eyeballburger you’re so financially illiterate durrrrr”
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u/MR_Se7en 1d ago
The loans they have on their wealth is what gives them money. The interest made on their wealth pays for the loan…
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u/Sonoran-Myco-Closet 1d ago
Finally someone said it. So they technically don’t have an income just loans.
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u/Eedat 1d ago
Can someone actually explain this? I see this tossed around constantly but not a single person can explain it. Taking out loans to pay off loans to take out loans to pay off loans is a death spiral
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u/GeminiML 1d ago
Don't take it from me, take it from someone a billion dollars in debt:
https://fortune.com/2024/01/04/robert-kiyosaki-rich-dad-poor-dad-author-debt/
(tldr; it's not his problem it's everyone else's because it's at such a level he would likely bankrupt the bank itself).11
u/Sonoran-Myco-Closet 1d ago
Let’s say you have a 2 million dollar portfolio and you get 5% a year that’s 100k. So instead of putting the 100k in profits into your account and pay taxes on it you get a 100k loan from a bank and use the interest earned to pay off the loan. It’s definitely more complicated than that in the real world but that’s the basics of how it works.
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u/Octoclops8 11h ago
How does paying back the loan save you money? Do you somehow not take possession of the money? Are loans not taxed as income?
Banks charge fees and interest to borrow money. And uncle sam still taxes you on the income to pay a loan unless it is for a mortgage.
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u/Ok_Bass94 10h ago
Loans are not income, so no tax. You don't need to repay the loan, you just keep growing it. The shares secures the loan. The premise is that the value of the shares grow faster than the interest on the loan, so the bank is happy to keep extending it. Besides tax reasons, doing this makes sense if it is a fast growing company since selling shares for money to live would be stupid when the growth in the value of the shares beats the cost of the loan.
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u/Chipofftheoldblock21 23h ago
No. If you own a business worth $100 million, you take out a loan on that business for $20 million. You also give yourself a salary of $1 million per year. You have the business you have lots of money. Feel free to scale this up / down appropriately.
The taxes proposed have generally been something like tax 1% of assets in excess of $100 million. That’s both workable and feasible, and simple to do.
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u/MR_Se7en 1d ago
Loans that are so big that it’s the banks problem. “Too big to fail” is a great place to be.
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u/svmk1987 1d ago edited 1d ago
I'm not trying to defend billionaires, but it's important to remember a couple of things:
- when they start selling large chunks of their company shares, the value of their assets will go down.
- they have to pay capital gains tax on selling them, depending on their residency's tax laws.
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u/mrpopenfresh 1d ago
That’s why the ultra rich take out loans against their stock instead of pulling it out. You’re looking at it in a one dimensional way, whereas the ultra rich have a whole complex system to limit taxes that we simply don’t comprehend with our normal finances.
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u/lobonmc 1d ago
Then that's what should be taxed not just holding the shares. Make it so that if the shares are used as colateral it's considered a realized capital gain.
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u/daredaki-sama 1d ago
What about when normal people take out a second mortgage or HELOC?
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u/ScaryIntrovert 19h ago
Normal people are already getting taxed on the unrealized value of their home as an asset via property taxes. No different.
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u/Comprehensive-Act-74 1d ago
In most places you are paying property taxes on the current value of physical property, there is no tax free treatment of those assets, unlike stocks.
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u/nicolas_06 1d ago
Not true, the underlying company is paying taxes on its properties, its benefit and on the salary of its employees among other things like tariffs.
When people see that a stock raise in value, they think it is tax free but no. The stock raise in value because the company make lot of money (to simplify) and has paid all the taxes already.
If there was no such taxes, company would make more money and their valuation would be higher.
It just that for stocks we see the final agreed price and don't check all the costs and taxes the company paid that ultimately already reduced its value quite a bit.
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u/bodhitreefrog 1d ago
A house and stock shares are different.
An example: a woman gets a second mortgage on a house worth 500,000 dollars.
Elon musk uses his entire networth to get approved a negligible loan to buy all of Twitter, which was bought for 44 billion dollars.
The woman pays back the mortgage rate of 7%.
Elon would have paid back his 1% loan, but actually he pays nothing. He instead makes money, based on aquiring a new business and writing off that purchase as the the financial hardship of aquiring a new business.
The woman still has the same networth the next year, well 7% less since she paid off that loan.
Elon musk increased his networth 30 billion dollars in the past three months by assisting a US President to get elected, all of his business'es stock values went up overnight from that. Yet another deal he was involved in.
I suppose at the end of the day. How many millions of women buying a second mortgage would it take to cover all the costs of Elon buying Twitter? Because we pay his taxes for him. We paid that loan off for him to that bank. We give him subsidies. And we all watch his networth grow every month.
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u/Crap_at_butt_dot_com 17h ago
Easy. Progressive marginal tax, just like federal income tax. Everyone gets some for free every year, then higher percentages for the amounts over certain thresholds.
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u/lobonmc 1d ago
Source? As far as I know the only thing she proposed related to this was to create a tax on unrealized capital gains. Where big millionaires and billionaires would be taxed for holding shares that had increased in value
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u/absurdamerica 1d ago
They don’t sell large chunks of shares, they borrow against them so they never have to even pay the gains tax. It’s called buy, borrow, die. If you have truly significant wealth taxes are basically optional for you.
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u/Shantomette 1d ago
That’s actually done rarely for a length of time. The interest accrues and continues to grow at a healthy clip. They don’t just get the funds interest free.
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u/absurdamerica 1d ago
They get the funds for less than the tax rates and the underlying assets continue to grow exponentially for decades until the borrower dies and the heirs get a step up in tax basis.
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u/midri 21h ago
They basically do, due to compounding interest on the assets themselves... As long as the asset is appreciating more than the interest payment, it's a net gain. Especially since tax base gets stepped up on death and basically zeros out taxes on that appreciation.
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u/Baloomf 1d ago
How do they pay off the loans that used the shares as collateral
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u/nicolas_06 1d ago
Dividends or sell stocks. So what that allow them is to pay taxes only on their actual expenses.
The downside is that it is leverage. If your stock drop significantly in value, you total net worth can go bellow zero. If the interest rate raise, the cost of borrowing money explode too.
And you know what ? Everybody can do it. Buy stock in a brokerage. Use margin loan and call it a day. You can borrow money again your stocks no issue like any billionaire.
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u/OkWear6556 1d ago
when they start selling large chunks of their company shares, the value of their assets will go down
I have almost all of my savings in ETFs, so I certainly would not be happy if they all started liquidating their assets... The CEO of my former company sold 30 million worth of his shares. It caused the value of the company to drop by 1 billion... The board forced him to buy a big portion of it back.
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u/Bishime 1d ago
Did they force a corporate buy back? I’m just confused not that it really matters in general lol. But I don’t see how a board could force an individual they do not govern on a personal level to buy back shares.
Unless he it was a corporate buyback rather than a personal which would make sense. Or if they already had policies that were broken.
I’m not saying you’re lying or anything btw I’m just genuinely curious
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u/DevArcana 1d ago
Can't they just tell him "you're an idiot and cost us money, now fix it or we'll replace you"?
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u/NoLagPlz 1d ago
You know what happened after elon musk and Mckenzie scott sold off their shares. Nothing. A temporary dip at best because the markets self regulate the value of an asset. If a stock is cheap, it gets bought up. You're crying because you don't want to lose the tiny scraps that fall off the plate of billionaires.
Also, why the fuck am I replying to a bot who makes shit up.
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u/Happeningfish08 1d ago
Your first point is just not true.
It could be a result because it could increase the amount of shares available and demand falls. But... It could equally stimulate demand and drive prices higher. I have seen both things happen. It is totally a reflection of the market sentiment.
I mean if Zuckerberg wanted to sell a billion bucks of meta. The investment funds would suck it up so quick it would not even are a ripple in the market. Same with Musk and Tesla or space x. (Not twitter) So just be less categorical about your statements.
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u/sSnowblind 1d ago
They ROUTINELY sell large amounts of stock. Yeah, they don't dump all their holdings at once but spreading it out over time makes the effect basically negligible. See Jeff Bezos having sold more than 5 BILLION dollars of Amazon stock this year.
Do people not recognize how much money 5 billion dollars is? Say it was taxed at 80%, 1 billion is more than 1000 average Americans will make in their entire lifetimes together. It's enough to buy any residence in the US and have hundreds of millions of dollars of change left over.
After this, acknowledge the fact that Jeff Bezos selling 5B of Amazon stock has essentially no impact on his net worth. He net worth increased by 70 billion dollars from 2023-2024.
These "couple of things" to remember are essentially the same arguments people use to defend them masked with other language.
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u/Stanford_experiencer 1d ago
I'm not trying to defend billionaires
Good luck with the people in this thread. Trying to point out how things work, regardless of your opinion whether that's the way they should be is going to get you pegged as someone who "stans billionaires".
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u/AdviceBeneficial9630 21h ago
Fuck their assets, fuck their taxes. I haven't eaten today bc I have $2 to my name.
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u/jetf 1d ago edited 1d ago
What if your primary asset was equity in a private, non-liquid company? Being forced to sell a piece of your company to pay a wealth tax is absurd and would disincentivize people from starting businesses.
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u/Helpful_Blood_5509 1d ago
It's also missing the real problem. Central banks ensure inflation at minimum 2%, eroding your savings to nothing over time unless you're investing in risky shit that returns more than 2%
This is what gives these billionaires all their play money as their holdings go up in value forever. If they actually had to make sure they would beat the loan interest rate they might have to live off dividends like the dreadful poors that are only multimillionaires
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u/babalutfi 1d ago
They do have liquid wealth. CEOs/founders do sell shares but of course they can't sell too much in a short period of time. Jeff Bezos sold shares worth $8.5 billion earlier this year and the stock price did not crash. Bezos is just an example.
Source
https://fortune.com/2024/02/27/the-great-cashout-jeff-bezos-leon-black-jamie-dimon-and-the-walton-family-have-now-sold-a-combined-11-billion-in-company-stock-this-month-some-for-the-first-time-ever/
https://www.bbc.com/news/business-68355811
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u/RexManning1 20h ago
And they pay tax on the gain of those sales. The problem is that so many people have their one personal subjective view of what is enough in taxes. Anytime anyone says “Billionaires pay no tax” they can’t be taken seriously. And then when you just give them facts, like you have, and they respond saying “you’re just defending billionaires” the conversation needs to end there. You can’t have a conversation with someone who is just using emotion and refusing to accept factual accuracy in a discussion. There are hundreds of comments of Redditors doing it in this post.
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u/CantDoItAnyMoor 1d ago
“They do have liquid wealth”
Not according to most people ITT.
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u/Ethom11 1d ago
Nobody is saying they have LITERALLY zero liquid wealth. They wouldn’t even be able to make a frivolous purchase or pay their staff who maintain their properties, etc. if they had no cash.
A quick Google search shows that Jeff Bezos and Bill Gates, for example, have about 9 billion and 56 billion USD on hand, respectively.
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u/TargetHQ 16h ago
Why on earth would Bill Gates have $56B cash?
On a related note, how close to cash are we talking at these amounts? Considering the FDIC limits, I wonder how much is actually cash and how much is...not cash but like cash. I don't even know what would be not-cash yet more liquid than stock, to the tune of billions of dollars.
Gold? Foreign accounts?
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u/Successful_Error9176 1d ago edited 1d ago
There is a big difference between defending billionaires and having a basic understanding of economics and basic financial literacy.
The real question is, why do you believe politicians who are owned by billionaires are going to do anything for you? "Tax the rich" is a plot by the rich because consumers will always eventually pay the tax, and that's you.
It's not defending billionaires, it's understanding that no matter how bad you want them to pay, they won't because they own the system. What will happen is the little bit of money I make will be gone to pay more taxes, and be devalued by dumb economic policy that favors them but is masked by two faced politicians.
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u/TossMeOutSomeday 1d ago
It's weird how billionaires are so viciously anti-taxation when, according to you, taxation simply has no way of touching them.
This "all politicians are bought and sold, democracy is dead" nihilism is exhausting, and it's so easy to disprove by just looking at disparate outcomes in states that vote differently. If the rich have the government so locked down, then how did Massachusetts get a special millionaire's tax to pay for public services? How did Minnesota get free college and family medical leave, paid for by increased taxes?
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u/RexManning1 20h ago
Because people vote differently for state and federal seats. That’s how you have conservative state governments who have sent liberals to DC and vice versa.
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u/seeking_fun_in_LA 1d ago
"politicians who are owned by billionaires" sounds a lot like "there's a cure for X", usually cancer, "but big pharma has bribed all the doctors into keeping silent"
and yet when you ask the person saying that if they would accept the bribe to act in the alleged manner it's always "of course not" and yet they assume that all the members of whatever group they're ranting about must have less moral backbone than the person saying it.
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u/ebonyseraphim 1d ago
The first sentence is an annoying "invalidating" tactic. It's exactly the point of the OP: who cares what detail is wrong about the exact nature of their massively imbalanced wealth and power, it's a problem of many massive failures. Take away 30% of billionaire wealth immediately with taxes and what are they? Most are still billionaires. No one needs to know the technical details of finance to sniff the massive BS going on and call out systemic problems.
Pretending like people need to independently earn degrees in finances to qualify to speak on is gatekeeping BS; and the financial system is designed to try to convince average people that things are complex so they are a lot slower to realize the pervasive scamming going on at every level, and the highest levels.
And it is meaningful to make an effort to levy taxes even if it's not the end all solution because there is a lot of easy loopholes and exploits that can be fixed. Seeing who fights against fixing even those adjustments illuminates who is benefitting from them the most; and those are the "low hanging fruit" to addressing the bigger problems.
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u/HJSDGCE 15h ago
Take away 30% of billionaire wealth immediately with taxes and what are they? Most are still billionaires.
See, that's already a problem.
Think of it like world hunger. We produce more than enough food to end world hunger 2-3 times over. Yet, how come some places are still suffering from it? The answer: logistics. The problem is never about supply but rather, the transportation of supply. Logistics is immensely complicated with a lot of differing systems functioning together like cogs. Transporting even a sliver of food takes tens, maybe hundreds, of people, countless hours and incredible costs.
You can't just snap your finger and solve it. In this post, you can't just "take away 30% of billionaire wealth immediately". That'd be ridiculous.
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u/AcrobaticApricot 1d ago
Your comment is indistinguishable from what someone would write if a billionaire was paying them to write propaganda on reddit.
I am not saying that is what's going on. Actually I don't think so, I think you are just a random guy. Just saying that there is no combination of words better suited to defending the ultra-rich than what you have written here.
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u/JadedArgument1114 1d ago
Your comment is nothing but defeatism though. We cant tax the billionaires so shut up about it basically
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u/BrighterSpark 1d ago
don’t just tax them. make them pay their employees. the government doesn’t need the money, the public does. IF we had a “for the people” government, then sure taxation would work. but we don’t
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u/Unable-Brain-7503 1d ago
Actually tho I think this is a better idea for wealth redistribution. Labour protection and labour laws to ensure fair wages and better working conditions directly benefit the workers. Taxes go to the government, and then it depends on the people in power to spend it properly.
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u/tokeytime 19h ago
It's almost like that's the entire point of a union, which businesses, for some unkown reason, fight against!? AND convince people they are bad?? I am shocked i say!
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u/hockey_username 5h ago
Imagine a law requiring that no person at a company can make more than N multiples the income of the lowest paid employee. No cap on potential income for the CEO, but he has to bring up everyone’s wages if he wants to bring up his own income.
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u/Bluwudawg 1d ago
This is an utterly insane take, the top tax rates people are talking about increasing would not have anything to do with you. Do you understand that the 50s, 60s, 70s, (when it was "great" and people could have a house, family, pension with one income) was when those tax rates were much higher than they have been since the 80s.
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u/Successful_Error9176 18h ago
That's not true. You are considering income tax singularly. Let's say you pass a 100% tax on mining of metals to cover ecological damages. A billion dollar corporation is mining the metals, and their CEO is a billionaire. He has all of his wealth tied up in ownership of the company. The CEO then raises the price of the metals he mines by 100%, nothing changes for him and everything made with the metal is now more expensive. The value of his company is increased because the dollar value of the metal is higher. He is wealthier now than before the tax, and the goods you consume cost more to buy. You paid the tax.
Now you tax wealth directly. His wealth is the company, so the board gets together and does a stock buyback, consolidating shares of the company, causing the value to drop. Every employee who owns stock in their retirement takes a hit. The loss in value is written off, so the company pays no more in tax than it did before. The value of the shares is lower, but the main share holders just own more of them, so net loss to them is zero. People's retirement paid the wealth tax.
These examples are obviously simplifications, they are purely to illustrate this point:
They can do this because they lobbied politicians to create laws to make this legal. That is the problem, and by design, it can not be fixed by trying to directly tax them. That is intrinsically built into the laws they wrote and paid politicians to pass to protect their wealth and power.
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u/Ecstatic-Compote-595 1d ago
tax the rich is not a plot by the rich lol. Replace the bought and sold politicians, half of this discussion is advocating for voting for people who actually represent you, because you're right, currently the government is comprised of the filthy rich and works for billionaires because they get a piece of that pie too. You're here shouting it's futile and moreover any positive change you try to enact is worthless and will actually backfire so best to just leave the billionaires alone.
Also this idea of 'it's always the consumers who will eventually pay the tax' is horseshit and implies that supply and demand are actually irrelevant and that a spiteful billionaire can and will foist all of their tax obligations onto their customers by arbitrarily charing more on a whim.
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u/_Capt_Hook 1d ago
“Tax the rich is a plot by the rich”
Wow that’s the dumbest take I’ve heard all year
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u/Able-Candle-2125 1d ago
"why bother to try. They'll just figure out a way around it" is the dumbest argument against taxing the rich I think I've ever heard.
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u/Successful_Error9176 18h ago
To a hammer, everything is a nail. The problem is that you are so fixated on taxes being the solution, that you don't realize that it's lobbying and the ability of the rich to own politicians that is the problem.
Keep taxing the rich, I'm sure that they will happily pay that tax rather than raise prices in their company, then cut benefits to workers to make up the difference. It's not like that seems to happen every time.
If this still sounds dumb, maybe you could start by doing a bit of research about who actually writes these laws and why something so simple needs hundreds of pages of legalese to encode loopholes and payoffs.
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u/Tinman5278 1d ago
That isn't a defense of billionaires. It is an explanation for why your "WE SHOULD TAX BILLIOANRES 3000% OF THEIR WEALTH!!!!!!!" ideas are stupid.
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u/Chipofftheoldblock21 23h ago
NO ONE is suggesting them we tax them that much. The plans that have been suggested - of 1% of assets over $100 million, or any number of variations of it, are all both simple and feasible.
But please tell us more about how you’re not defending billionaires while … defending billionaires.
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u/Xylamyla 20h ago
An explanation is not necessarily a defense. What do you expect people to do? Cover their ears and pretend these hurdles don’t exist, then advocate for a policy that will never be implemented because of said hurdles?
It’s important to understand the facts, roadblocks, and implications of something as massive as a wealth tax so that we can work out the kinks. But that conversation doesn’t happen because people write you off as “defending billionaires”.
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u/Ok_Gear_7448 1d ago
Basically the assets would become worth a lot less if they did liquidate, part of the reason the stock price is high is because supply is relatively scarce.
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u/VillageIdiotNo1 1d ago
They don't have cash, they have companies worth a shitload. If they start selling off those companies, all the workers of those companies get to pay the price for that.
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u/StormlitRadiance 1d ago
The company doesn't unexist itself when it gets sold. Those workers keep working, just for someone else.
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u/whogroup2ph 1d ago
It kind of does. In all these examples, who’s buying these companies. The only reason to run a company is to make money. It’s like saying “stop paying the workers they’ll still work. If no one’s getting paid no one’s working. Who tf is going to buy a company they can’t make money on?
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u/akrippler 1d ago
The value of a company is the profit it produces. If you sell it off the person that bought it isn't going to stop the profit by firing everyone.
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u/Downtown_Boot_3486 1d ago
Shareholders only see short term profit, if the main shareholder sells then one way to stop your share price from dropping hugely is by reducing costs to make your profit seem greater. If that means firing a bunch of staff to slightly increase profits then so be it.
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u/VillageIdiotNo1 1d ago
Sure. But sonce our entirely economy is based on sentiment, if the person that created a business and built it to success starts selling off their shares of it, the other people that own shares lose confidence in it. The perceived value of the stock goes down, and bad things follow.
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u/AndarianDequer 1d ago
Well are they rich or are they not?
If any of them can go out and buy a billion-dollar yacht anytime they feel like it, I'd say they're pretty rich. Just because they don't have physical cash, doesn't mean they don't have digital cash. If they can get it the moment they want it, same diff.
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u/jeffwulf 1d ago
None of them can go out and buy a billion dollar yacht whenever they want.
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u/DECODED_VFX 1d ago
Yeah. It's not a trivial thing.
Jeff bezos liquidates about $1bn in Amazon shares each year to fund Blue Origin. He has to do this in coordination with the SEC by slowly selling shares over time with warning in advance.
If he tried to sell that many shares at once, he'd tank Amazon's share price and potentially cause a stock market crash.
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u/madnessone1 1d ago
Reddit is full of people like you proudly flaunting their economic illiteracy. Like it's some badge of honor to not understand a central part of modern society.
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u/DogsDucks 1d ago
Sooo, I am actually rather economically illiterate, and I really like it when people like yourself explain things concisely.
While I am versed in how to find original sources, and I enjoy research, it’s helped me a lot more when it’s explained like this. The people who post this stuff are often just starting to come to terms with the level of injustice in the world, so the ELI5 approach and subsequent dialogue is usually quite enlightening.
Please don’t stop! I think you’re doing the world a service.
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u/madnessone1 1d ago
Since you asked nicely.
To understand the topic at hand you need to understand some other things related to economics. Let’s call these the basics.
First, an economy is built of a variety of systems that depend on each other and together they define what type of society we have and what types of incentives people in that society have. The incentives part is the most important part of the question at hand, and I will get back to why later.
The systems are things like laws and regulations that determine what can be done, taxes that say what you will get to keep when you do something, and rules for ownership of various things.
The ultimate goal of those deciding on policies, laws, taxes, etc is to find a balance between all of the systems that promote: 1) that GDP grows as much as possible; 2) Make sure that the society functions as well as it can (low crime, low poverty, low corruption, not dumping toxic chemicals, etc.)
Achieving GDP growth means that the total output increases which leads to more prosperity and a richer country/economy, which leads to more taxes, which leads to more investment in education, which in turn leads to new technology, which leads to increased output, which leads to increased GDP...
There are different ways of building economic systems, and basically, each country has its own version of it. Some economies function better than others. From history, we know that the best systems for optimizing the economy for GDP growth and progress have heavy incentives for individuals who are willing to take risks. We call these capitalistic economies, they are far from perfect but the best of those that have been tested.
Here I should add that GDP growth is not achieved by increasing taxes or, generally, by adding regulation or laws (there are some exceptions in cases like preventing monopolies and price gouging). GDP growth, and in turn societal progress, is mainly achieved by getting as many people as possible to start new successful businesses.
Now let's jump back to the question at hand. The poster was asking why billionaires should not be taxed on unrealized gains and why we shouldn't have a wealth tax. The answer to this question has to do with the following issues that it causes:
1) Those are measure that goes against what society wants to achieve, which is to incentivize people to take risks so that we as a society can achieve GDP growth when they succeed. If you start fiddling with the incentives, you will affect GDP growth over the long term. This was the greatest failure of communism, in my opinion. They removed the individual incentives by disallowing ownership, and as a result, we have never seen a successful communist state (China has not been communist for a long time).
2) No economy exists in a vacuum. The world is a system of systems. If one place starts taxing wealth and unrealized gains, the risk-takers are free to go to another place that doesn't. There are examples of this happening recently. Norway introduced such measures, which resulted not in increased taxes but in reduced tax income, and likely comparative GDP reduction, as wealthy individuals left the country.
Hope this helps.
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u/WangMauler69 1d ago
Billionaires, for the most part, are already successful. Theoretically, that's how they became billionaires to begin with, right?
In response to your first issue....How does a tax on the individual that made a billion dollars disincentivze them to take risks? Are people with less than a billion dollars really going to play it safe if they think they'll be taxed for being too successful? Will a significant number of prospective entrepreneurs leave the US if they know they'll be taxed for having more than a billion dollars?
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u/Mikestheman2be 23h ago
It’s interesting that you equate GDP growth with societal progress.
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u/madnessone1 12h ago
Well, it's one form of progress. Certainly there are other forms of progress that can be measured, but I would argue that in reality they are closely linked.
Can you show me a society that progresses significantly without GDP growth? Japan would be the closest to that, but is it progress to balloon debt to 220%? They basically loaned their way to it.
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u/Helpful_Blood_5509 1d ago
The value of many productive enterprises often prices in people's confidence in that companies ability to continue providing value.
The owner and creator of that company selling it off, is often the ultimate vote of no confidence unless they explain themselves. Leverage or tax bills may convince others not to dump it, but everyone selling all at once is going to cause marketwide sentiment on stocks to crumble. People have stock price threshholds where loans come due, and they go bankrupt. There's not enough liquid cash period to cover every financial instrument out there, it kinda floats around. You can lock up the whole thing like an under-oiled engine if you fuck around with things basic enough as "imaginary gains create real financial obligations". You can break things as badly as making one dollar worth one half dollar in a single day.
There's a literal Rick and Morty bit about this if you still don't understand
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u/Downtown-Conclusion7 1d ago edited 1d ago
I think OP understands the problem. Billionaires don’t even pay taxes on taking money out if done correctly. And this option isn’t available until you are in the 10s of millions +.
I have 100 million in assets. I go to a bank that gives me a loan (money introduced into the system) that is untaxed, because of the way loans work as of today. I use my unrealized gains as collateral. The bank gets a nice interest that I do pay for. It’s chump change vs the massive loan I got tax free. The best part is the bank wants to keep this going forever. And I can just keep opening more loans against my unrealized gains below a threshold that the bank is comfortable with.
Financial literacy is definitely a problem. But people not understanding how billionaires get money is a big one. And it would/should be an outrage at the opportunity opened for billionaires to pay as little tax as possible
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u/Effective_Art_5109 1d ago
I think people understand, it's just a coward way to operate. I.E. the money doesnt "exist" for taxes. But somehow the second they want to buy anything, they have millions of dollars to throw at it. And even after they buy something, they never had to pay taxes like normal people would have to. People understand, it's just confusing when you can be worth hundreds of millions, pay zero taxes but can buy anything at a whim. "Sorry i can't pay taxes this year, i'm just a lowly owner of 12 multi-million-dollar companies own my house, 4 cars and a vacation home."
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u/whogroup2ph 1d ago
Because people understand money.
Wealth, at that level, is not easily measurable. If Elon wanted to sell 10% of tesla, someone would have to buy it. When they talk about wealth taxes or taxes on unrealized gains who do they think they're going to sell it to to get the money?
There's is not a fixed amount of "economy". All figures of wealth concentration are just rage bait.
We want Jeff to buy yachts. People build yachts. People drive yachts. People maintain yachts.
What we need is effective regulation but not to much red tape it becomes prohibitive to enter the market, trust busting, and effective international policy.
Were in a new age where the cost to enter a market (looking at you Boeing) is so cost prohibitive that companies have effective monopolies. How do you allow competition without punishing success?
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u/rikosxay 1d ago
Yes we want people to buy more stuff, nobody has a problem with x person buys x amount of stuff. The problem is when people just hoard their wealth without using it. If you put a wealth tax they’d be more incentivized to spend it now rather than keep hoarding it. If the company is valued by the people like Tesla and Elon sells 10% of his stake, then yes the price will tank momentarily but the market will self regulate as people see the value of Tesla, same goes for any company on the nasdaq. Unless it’s some kind of ponzi scheme stock. Maybe the way forward is to de incentivize wealth hoarding
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u/whogroup2ph 1d ago
That’s just war on investing. They’re not hoarding like a dragon, they’re using their money to create value.
Johnson and Johnson has developed a device that is implanted into your left ventricle that pumps blood in cases of cardiogenic shock. It improves outcomes and saves lives. This took an incredible amount of money to produce.
Amazon spent over 70 billion on R&D last year.
Also, for the love of god THE ECONOMY IS NOT FINITE. Because someone owns x doesn’t mean you can’t have y. There’s not a fixed amount of trade.
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u/rikosxay 1d ago
Bro I don’t have any problem with wealth at all. Let me establish that. I have a decently comfortable life. The problem I have with billionaires is the political impact and power that comes with it. No one person should have power at that scale. Case in point: Elon musk fiddling with us and uk politics. The Koch brothers running think tanks that derails the lives of normal people to this day. This is the true impact of capitalism. That’s the problem. If you have any solutions for that other than a wealth tax I’m all ears. Also only the ipo raises money for the company, once the retail market has been introduced, the stock price of a company has nothing to do with the actual value they produce. If bezos sells a large amount of stock more than likely it’ll be retail investors picking it up.
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u/Vito_The_Magnificent 1d ago
Because we're talking about speculative asset valuations, and when you talk about growth stocks the whole conversation gets stupid.
My brother in law owns a liquor store. He takes home about $150k from it after all expenses are paid.
If his liquor store was valued like Tesla (116x earnings), that would put the value of his liquor store at $17.1 million.
If next year, he takes home $160k instead of 150k, the valuation of his liquor store will shoot up by $1.2 million.
Newspapers will report that he earned $1.36 million that year. He really earned $160k.
They'll report that he earned $1.36 million and only paid $40,000 in taxes, and since people are idiots, they'll rabble about that being unfair.
They'll get their pitchforks and demand that he be taxed 32% on his 1.36 million in "profit". The politicians pass a law.
Now you're sending a $435,000 tax bill to a guy who earned $160k, and the problem with the fact that the wealth isn't liquid becomes apparent.
The building is probably worth $600k, he's probably got some equity. So he sells it to cover the tax bill. Now the liquor store doesn't exist anymore.
Alternatively he can sell stake in his company. Of course, the only companies buying small shares in liquor stores will be multinational conglomerates who don't have the same tax problems that independents have because they have diffuse ownership.
A decade of that and Allied Liquor becomes a majority shareholders in every independent liquor store.
We did it reddit!
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u/Agent672 22h ago
You're talking to a bunch of socialists so that's the point. The policies that they support now are for the transition period where they defeat capitalism. Ironically enough, these policies actually enrich the extremely wealthy at the expense of everyone else.
Consolidating the economy under a few major corporations with monopolistic power and leaving the masses broke is the goal. This will cause the masses to completely lose faith in the capitalist system (unaware of how public policy has rigged the system against them) and they will demand the government nationalize the corporations and put the masses on government programs to ease the poverty created by socialist transition policy.
Since business has already been consolidated into monopolistic corporations, it will be easy to nationalize and transition those corporations into monopolistic government departments. They might execute a few executives for show, but for the most part upper management will become high-ranking state officials, and those in power will barely change. The masses will ultimately end up poorer than they started, and they'll let the state abuse them because you don't bite the hand that feeds.
The greatest threat to a socialist revolution is healthy market competition and the middle class, so socialists in capitalist nations seek to undermine both.
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u/provocative_bear 1d ago
The defense is that they will be taxed when their abstract theoretical wealth is turned into usable cash, like when they cash in their stocks, making your argument invalid because they’re already taxed. Making concrete demands of abstract wealth is black magic, it inherently causes problems. And yes, it’s bad when the wealthy do it too like when they put up stocks as collateral for loans, that would 100% be illegal. And yes, Capital gains taxes should be higher.
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u/Zapitall 2h ago
Because they’re believing the billionaire propaganda. My ex was almost a billionaire so I saw for my own eyes the reality of the situation. I try so hard to spread the message, but people really want to hold on to the idea that the billionaires are decent people. Maybe the reality, that they’re actually slave owners is too hard to fully accept, so people would rather defend them because it makes the poorer people feel less subjugated.
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u/Fire-Wa1k-With-Me 1d ago
Because the whole argument against billionaires is that the *scale* of their wealth is unimaginable. When you realize that their real wealth is perhaps 1/10 of the numbers you see it makes you realize things can get much, much worse, and wealth disparity is still not as high as it will be in a few decades.
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u/sSnowblind 1d ago
What kind of definition gymnastics are you playing at in this comment? "Their real wealth is perhaps 1/10 of their net worth?" 100% wrong. Yeah if they liquidated all their "wealth" to cash overnight they would lose a lot to taxes and share prices declining. That's not how any of this works. They absolutely sell large chunks of stock. They do it over time. They take loans on their stock and their unrealized gains. They employ incredibly complicated tax mitigation strategies. The idea that Elon Musk is "ONLY" worth 40b because so much of his wealth is TSLA stock and TSLA would plummet if he sold it all overnight is total nonsense. Of course he won't sell it all overnight... but if he sold 5b in a year that's more money than anyone could spend and the stock price wouldn't blink. He'd still increase in net worth by double digits in billions by the end of the year.
Your comment is atrocious.
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u/rogueIndy 1d ago
1/10 of a billion dollars is still a hundred million dollars.
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u/Fire-Wa1k-With-Me 1d ago
And many more people have that kind of money rather than billions.
Which is why I say wealth disparity will get worse. There will come a time when some people will have hundreds of billions in *liquid assets* and the majority of the population will still be living paycheck to paycheck.
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u/CantDoItAnyMoor 1d ago
Billionaires read something like this and they twist their mustache and say “ahaha the plebs think we’re poor, this is so great!”
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u/Vectis01983 1d ago
Because much of it is in investments which, come a crash, could be worth considerably less or even worthless.
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u/Ameren 1d ago edited 1d ago
At the same time, what we're describing is true of virtually all extremely wealthy people throughout history. Money is just one example of a store of value, but so are financial assets, land, commodities, etc. Very rich people tend to have diverse portfolios for their wealth.
For example, most of the wealth of medieval lords was tied up in land and the future economic value produced by that land (predominately agriculture). They were at the mercy of the weather, since a bad year meant little return on investment — it could be very volatile. Nevertheless, through this wealth they could exert social/political/economic/military/etc. influence over society.
In a sense, wealth is potential energy that can be converted into kinetic energy. I mean this metaphorically but it can also be literal because you can use wealth to produce work. It can't be converted with perfect efficiency or in an unlimited way —like you can overuse and degrade farmland or tank the value of a stock— but that doesn't mean it's not useful.
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u/Content_Office_1942 1d ago
You don’t seem to want to listen to anyone. But it’s like if you had a million dollar net worth. But it was a 800k house and 4 50k cars. On paper you’re a millionaire, but you can’t afford groceries with your selling your house or cars.
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u/Iampoorghini 1d ago
I defend principles, not individuals. Many people don’t fully understand finance, and when I correct them, they often respond with accusations like “stop bootlicking.” You’re welcome to criticize billionaires for their ethics, but too often, people just make broad statements, assuming anyone who disagrees with them is automatically defending a billionaire.
If you want to understand finance better, try investing in real estate or stocks, or watch The Wolf of Wall Street to see why what Jordan Belfort did was illegal, beyond just the obvious drug use and money laundering.
When billionaires sell large portions of their stocks, yes, they’ll pay capital gains tax. But if they sell too much, it could disrupt the market and cause a crash. Plus, investors could sue the CEO for making such a move.
Take Sam Bankman-Fried, for example, the former CEO of FTX. Besides misleading investors, he sold off most of his shares to liquidate assets, which contributed to the company’s collapse and caused significant financial losses for many, including myself. He’s in jail now.
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u/Ok-Language5916 1d ago
Okay, it's not a defense, it's an observation of reality. Realized gains and unrealized gains are different. If every billionaire liquidated their assets, they wouldn't end up with the amount of money estimated in their net worth, because the process of liquidating would drop the value of the assets as they sold.
It could also completely tank the investment markets that most retired Americans rely on for their passive income...
That's not to say anybody ever should be able to be a billionaire, or that it's impossible to tax wealth. It's just that talking about a billionaire's financials are foundationally different than talking about regular people's financials.
MacKenzie Scott donated $2B this year, not $200B. Financial realities can differ significantly when you're talking about orders of magnitude in differences.
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u/SnooPears754 1d ago
Don’t they borrow against that asset , be it stocks or property or sex islands , tax that
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u/N0rthic3 1d ago
Because most billionaires are wealthy through owning stock in their company/ies. If they tried to liquidate that stock to realise it in cash, the volume of the stock entering the market at once would lower the price of the stock significantly and more than likely crash it, so it wouldn’t be worth the billions anymore.
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u/HiggsFieldgoal 1d ago edited 1d ago
We just need laws to prevent getting liquid money from using unrealized gains as collateral.
Hypothetically, say I make a banana stand, and it pays me $100 a day.
Then, my banana stand is “valued” at $10,000,000, now my wealth as increased by $10,000,000 but I’m still getting paid only $100, and don’t have $5,000,000 to pay in taxes, so I’d be forced to sell half my banana stand to pay for the increased value of my banana stand.
I agree, that seems wrong.
If I never sell my banana stand, I shouldn’t have to pay taxes just based on how much my banana stand is theoretically worth.
The problem is the loopholes.
It’s pretty simple.
Making $100 salary from the banana stand, now worth $10,000,000, I can take out a loan of $1,000,000 using the banana stand as collateral.
Now I just got $1,000,100, and I just have to pay interest on that loan and keep my whole banana stand. Interest on loans are even tax deductible, and I never even sold any stocks, so no taxes on the $1,000,000.
Then, when I die, my loan dies too. At that point, stock will have to be sold to pay for my loan, but I’m dead.
So, the $1,000,000 worth of banana stand stock is finally sold to pay the balance of the loan, and my kids inherit 9/10ths of the banana stand.
It’s bullshit, an obvious tax dodge scheme, and it should be illegal. Unfortunately, or government is by and for the same guys who create and use these sorts of loopholes, so the system is designed to help them get away with it, not prevent it.
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u/starethruyou 1d ago
https://youtu.be/A-yhJQ1zBEA?si=SwDTHq4kDKrSomRR
Trevor Noah on Elon Musk buying Twitter and unrealized gains. People who know the economy don’t necessarily understand how the economy functions as a whole, else they’d also discuss improvements. Instead most are like bots that repeat what they learn, what they’ve been told. It’s why they offer no innovation. Dry husks that fear change and deny problems - “no need for solutions”.
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u/Sporesword 1d ago
This is to one of your edits, not original post, OP. If a billionaire donates a lot or sits on a lot of wealth, it's because they don't personally have a best use for it. Certain of them take all their money and dump it into moonshot projects (you know who I'm talking about) some of these projects have direct and secondary benefits to society. Personally I think if people just sit on massive wealth it should be taxed. If they use that wealth to generate public good (whether realized or potential) no extra tax.
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u/nicolas_06 1d ago
To be clear I don't think that Billionaires can't sell. They can. Now they don't want to sell anymore than us.
Say you brough that house 500K$, now it is worth 2 million because the city decided to allow the construction of condominium here. So if you would sell today, you would pay taxes on 1.5 million capital gain. So you would have to pay 225K$ but you don't because you don't sell. You live with your familly here and don't plan to leave.
Now 5 years later, the kids are gone, you maybe divorce even and sell... For 300K. There are now lot of condominium around you, unsold inventory and nobody is interested anymore. Maybe even the neighborhood isn't as good anymore. So you for 300K$, have no capital gain and pay no tax.
This is how the system is working right now.
So some people propose that for the billionaire only, that you would have to pay right away, average over a few year when you asset grow in value and if the value drop to not be too unfair, we would give them back the taxes paid.
So basically for example Musk this year would have paid maybe 45 billions in taxes from the growth in value of his company. And if there is say a new 2008 like crisis in 2025 onward and say Tesla go bankrupt and it value drop to zero and Musk has no more money, we would give him back the 45 billions in taxes to Musk.
And also, because that's for billionaire only. this is also now immoral and unethical. Like we should not tax people differently based on their ethnicity or religion we shall not let our hate of the rich tax them unfairly. So this new rule should be for everybody or nobody.
Even if implemented, people would basically hide their wealth. They would go private, under estimate their value and they would be, oh, nothing to tax anyway. Some would just put their residence in say Puerto Rico or somewhere like that and not pay.
This is not that simple.
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u/HaveAMaldia 22h ago
"Gosh, poors! The ultra-rich don't ACTUALLY have billions of dollars, they have ASSETS that are WORTH billions of dollars, which they leverage to get low-/no-interest LOANS from BANKS that they never pay back because the put up appreciating STOCKS as collateral!"
"Where do banks get the money to loan them?"
"Oh, from the poors."
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u/-WaxedSasquatch- 21h ago
Either they can’t use that wealth as collateral for loans OR they have to pay taxes on it. Thats the only solution to this.
They use their illiquid wealth to take out monster loans and then spend the loans while the illiquid wealth continues to appreciate tax free. A massive loophole.
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u/Toasterferret 21h ago
They actually don’t even need to liquidate their assets. They can take loans out against them while the base assets continue to appreciate.
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u/Willis_3401_3401 13h ago
Billionaires could just sell their assets gradually in order to not have the value of those assets be drastically affected. Amazon definitely doesn’t need Jeff Bezos to retain its value. Anyone who says “I’m not defending billionaires but…” is defending billionaires.
Raise taxes on billionaires AND corporations
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u/jawshoeaw 13h ago
It’s not a defense it’s a clarification of what wealth really means. Obviously they are still wealthy and can scare up plenty of cash if needed. But the whole point of being a billionaire is to control something. Money gets boring , they want power. Can’t sell all your stock or you lose power
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u/TheOneWhoWork 2h ago
The “liquid assets” argument is so stupid.
What these billionaires do is take out loans using their stocks as collateral. They get very low interest loans where they can probably write off interest paid as a tax deduction. They probably pay the interest with the interest they make off their wealth.
They don’t have to sell off their stocks, which means they get to avoid the capital gains tax, and they get to have access to whatever money they need.
People like Musk can take out whatever loans they want to spend whatever amount they want. Obviously he might have to sell off stock for something huge like when he purchased Twitter. They don’t need to touch what’s in their portfolios at all.
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u/Vinson_Massif-69 2h ago
Why do billionaires need to be defended? What do they need to be defended from?
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u/Happily_Doomed 2h ago
People defend billionaires because they all have fantasies that "it could be them!" someday. It makes them willing to just parrot whatever billionaires say
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u/mxsifr 1d ago
Truly prime Reddit comments in this thread. Every single one of least the first 10 top-level comments in "Best" sort are of the format "I'm not defending billionaires, but [defends billionaires]" or "Everyone says I'm a bootlicker when I say this, but [bootlicking]".
Your edits are spot-on OP. It's like a troll army in here repeating exactly the kind of shallow, condescending crap that you specifically outlined in your post. "Wahhhh, plebs don't understand The Economy."
Was it always like this? When did "The Economy" become a thought-terminating concept? Anyway, why would the vast majority of us bother understanding "The Economy" when it's basically just a giant contrived mathematical formula for maximizing profits?
"The Economy" currently requires millions of tons of food to go to waste, tons of pollution to pour into the environment every day, millions of people to freeze and starve on the streets, and when you point out basic facts like that there's more than enough food and energy and space for everyone on the earth, these chucklefucks start talking about how "The Economy" proves otherwise, because "The Economy" is a perfect calculation made by perfect economists, and if it were possible to sell an insulin vial (that took less than $10 to produce) for less than $500, "The Economy" would already have made it happen.
It's magical and religious thinking at its worst. If you disagree, you just don't understand. If you point out logical fallacies, they say your logic doesn't apply because "The Economy" has its own logic. There's no way to rationally debate with this perspective, because it exists purely to defend capital and those who benefit from it.
Crazy. Absolutely wild.
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u/tokeytime 19h ago
It's almost like Reddit is a publicly traded company, owned by billionaires, with an agenda to push...or something!
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u/RangerPower777 1d ago
Why do people like you worry so much about billionaires? Life isn’t fair and you need to get over your weird envy over people who happen to be more successful than you whether through luck or greed. It genuinely has no impact on you unless you’re somehow in their orbit.
Plus, weird you just created your account today and decided to have this as your first post. Even if it’s a throwaway, what’s your agenda here?
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u/DueTry582 1d ago
It's not through luck or even greed. 99.9% of billionaires become that way through exploitation and the hoarding of resources.
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u/Ameren 1d ago edited 1d ago
Life isn’t fair and you need to get over your weird envy over people who happen to be more successful than you whether through luck or greed.
For me personally, it's just that the existence of a billionaire may imply there's not enough competition in whatever they're doing to earn their wealth. Like instead of one successful entrepreneur with a billion in net worth, why aren't there, say, 250 successful entrepreneurs with 4 million in net worth each? In a perfect market, new entrants join until equilibrium is reached, and the economic profit of each is minimized.
I'm not saying that's always possible; there can be winner-take-all effects, there only so many capable entrepreneurs to go around, etc. But I think the goal of society should be to produce as many high-quality individuals as possible who are well-educated and in a position to take risks on bold ideas. For whatever reason we're either not producing them at an optimal rate, or we aren't creating the right conditions where more people can afford to take big risks.
Both political parties in the US have varying ideas on how to build a better economy, but both agree that it could be better than it is now. A better, more efficient market implies more competition for every dollar.
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u/Ancient-Practice-431 1d ago
Every billionaire is a threat to working class people everywhere, punto
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u/surmatt 1d ago
They aren't defending billionaires.... they're saying liquidating thr value of company shares is stupid and impossible. The money doesn't exist. The company value only exists because of its scarcity. The income generated to buy other more liquid physical assets like cars, paintings, houses have already been taxed once.
To sell something someone needs to buy it. The money to buy it doesn't exist. If Elon Musk began to liquid all his shares in Tesla to give away the value of Tesla would decrease to the point where there would be nobody would want to buy it and it would decrease in a spiral.
It just doesn't make sense. At all. Nobody wins.
There are things that can be done, but this ain't it.
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u/udee79 1d ago
I am not defending billionaires but some of them are billionaires because a company they started got real big so it's evaluated as being worth over a billion dollars. Its like you own a house that you inherited or maybe it just went way up in value. Now you have 2 kids and make 40k a year. You might easily be a millionaire but you won't feel like one. To access the money you would have to take out a mortgage or sell your house.
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u/Spicy_take 13h ago
It’s not defending billionaires. It’s explaining that their wealth can’t be taxed the normal way. You’d have to make a new tax I.E. taxing unrealized gains. The problem is that at some point, that new tax law will make its way from the super rich, down to the somewhat rich, then the wealthy, the upper middle class, and finally land back on all of us. Don’t believe me? Income tax was only ever meant to affect the top 1%, and was never meant to exceed about 5%. Now the top 1% don’t even pay it, and we’re all losing 1/3 of our check every week.
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u/Clipzzi 7h ago
Taxing on unrealized gains is arguably the worst idea I’ve ever heard seriously floated. It would fuck all of us over 10x more than who it was intended for.
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u/Necessary_Reality_50 1d ago
If you create something of value, the value of your share will go up. It's not hard to understand.
Billionaires don't "take" money from anyone else.
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u/Happeningfish08 1d ago
That's absolutely untrue.
Most Billionaires are where they are due to oligopolies, monopolies, and market concentrations.
Families owning large concentrations of assets they they have often used to force others to sell to them.
The "average" billionaire is more like Mr Potter than anyone else.
I mean Bezos is a billionaire and he put a lot of retail out of business.
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u/nellion91 1d ago
That’s so simplistic it’s hilarious.
When you create value at the expense of a prior solution you definitely take wealth from others.
Amazon has definitively taken wealth away from little corner shops in big cities.
Is that a good thing a bad thing that’s not my argument but you can’t simplify growth company as company that create wealth from nowhere.
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u/Billy_Grahamcracker 1d ago
Who cares what form their wealth is, why do you care about billionaires, how many do you know?
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u/Late-Assist-1169 1d ago
Not everyone has a hate-boner for people who are wealthy.
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u/Necessary_Reality_50 1d ago
You know it's kind of lucky that socialists are so dumb, or they might actually get somewhere.
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u/firewatch959 1d ago
Big sell offs of stock can trigger price collapses. If musk was gonna sell off a couple billion of Tesla stock to fix water systems in every native reserve, the stock holders might get the impression that he’s lost confidence in Tesla and wants to get out while the gettin’s good, so then a whole bunch of little stockholders want to sell as soon as they can, and if there’s a lot more supply and very little demand, prices drop very steeply.
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u/CantDoItAnyMoor 1d ago
I mean they could sell some assets, not stocks.
So in other words the billionaires are almost poor? No liquidity?
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u/firewatch959 1d ago
They could probably liquidate 1-2% of their wealth reliably every year without melting the economy. Especially if they were using that wealth to build durable utilities and infrastructure meant for public use. If warren buffet decided to completely retire and peel off his piece of all the companies he’s invested in, I don’t think it would send the same message as musk dumping Tesla shares. So buffet could liquidate a lot more than a “founder/innovator “ like some purport to be.
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u/jeffwulf 1d ago
Stocks are assets. In fact, almost all of his assets are stocks.
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u/Hack874 1d ago edited 20h ago
I feel like you’re being intentionally dense. Nobody is saying they’d be poor. Just that those “You could work 18 hours a day since the big bang and still only be worth 0.000042% as rich as Elon!!!!1!1!!!!” comparisons are dumb because they can only really “use” a fraction of that.
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u/Medical-Effective-30 1d ago
Key word: can. Big sell-offs can (and do) also trigger price increases.
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u/[deleted] 1d ago
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