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A comment on Don’t wait for billionaires to sell their stock. Tax their riches now. Parent comment

Re:Don’t wait for billionaires to sell their stock. Tax thei... by chii on Wednesday April 14, 2021 @10:05PM (#26815441)
> consuming their unrealized gains.

they are getting loans using their unrealized capital gains as collateral. And these loans are not interest free, and would have to be paid back at some point in the future. And in order to pay the interest on the loan, they will have to realize _some_ gains as income. So that gets taxed.

Is it better that these billionaires don't obtain their mansions and yachts, or that they do and don't get taxed?

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Re:Don’t wait for billionaires to sell their stock. Tax thei... by satya71 on Wednesday April 14, 2021 @11:46PM (#26816003)
Govt doesn’t get any money from the interest paid. The underlying asset can eventually be sent offshore, put in trust or whatever, and never be taxed.
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Re:Don’t wait for billionaires to sell their stock. Tax thei... by sparky_z on Thursday April 15, 2021 @02:50AM (#26816915)
If the underlying asset goes away and never gets realized then where does the money to pay back the loan come from?
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Re:Don’t wait for billionaires to sell their stock. Tax thei... by chii on Thursday April 15, 2021 @04:45AM (#26817803)
So you're saying that they'd bankrupt themselves, rather than pay off the loan?

And i'm sure the banks lending out the money will want to have a way to hold on to the collateral.

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Re:Don’t wait for billionaires to sell their stock. Tax thei... by sparky_z on Thursday April 15, 2021 @09:25PM (#26828282)
No, I'm saying that they wouldn't bankrupt themselves. They would realize assets (or take income) to pay off the loan, and that's when they would get taxed. The story that rich people don't pay taxes because they just take out loans and never sell the assets doesn't make sense to me for that reason.
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Re:Don’t wait for billionaires to sell their stock. Tax thei... by chii on Thursday April 15, 2021 @04:44AM (#26817792)
of course they do - these interest payment isn't investment cost that can be claimed.

And the interest payment is profit to the banks/lender, and thus, they pay tax on profits (less expenses).

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Re:Don’t wait for billionaires to sell their stock. Tax thei... by jjeaff on Thursday April 15, 2021 @12:38AM (#26816253)
They are paying less than half a percent interest in most cases. So the interest doesn't really factor in.
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Re:Don’t wait for billionaires to sell their stock. Tax thei... by chii on Thursday April 15, 2021 @04:46AM (#26817812)
If the banks are willing to lend at this low rate, so be it. It simply means money is cheap.
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Re:Don’t wait for billionaires to sell their stock. Tax thei... by jjeaff on Sunday April 18, 2021 @05:10PM (#26856404)
They are usually only willing to lend at a rate that low to the wealthy only. Because it is lower risk, but mostly because they want to ingratiate themselves to the super wealthy because it can lead to future, more profitable deals.
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