Retire early to hunt more?

Didn't see anything in the article about borrowing money against their assets and not paying it back. That was what I was interested in. Thanks.

read my article. or just the quote.

paying the loan back doesn't really have much to do with anything, and why wouldn't they have to pay it back? the two things there is that the $500 million loan that is backed by your $500 million in shares in your company is not income and the interest is deductible
 
bbc more credible? at least they use the word alleges and alleged a lot ;)


"That's not to say these super rich folks have no money coming in to pay their yacht bills. There is a widespread tactic employed by the rich to borrow cash secured against their vast wealth - which again is not income - it's proceeds of a loan and here's the (perfectly legal) biscuit-taking bit.

The interest on that loan can be deducted from any other income to further reduce income tax liability. It sounds egregious - but it's legal."
Still doesn't say they don't repay the loan. Says they expense the low interest that they pay on the loan.
Funny that they are going after rich lefties though. Buffett, Bezos, Musk, Bloomberg, and Soros are not immune to the pitchforks from the crazy left. Could get interesting in the years to come.
 
read my article. or just the quote.

paying the loan back doesn't really have much to do with anything, and why wouldn't they have to pay it back? the two things there is that the $500 million loan that is backed by your $500 million in shares in your company is not income and the interest is deductible

They might want to consult an accountant before misinforming the ignorant masses. But that's what they do so what the heck.
 
Still doesn't say they don't repay the loan. Says they expense the low interest that they pay on the loan.
Funny that they are going after rich lefties though. Buffett, Bezos, Musk, Bloomberg, and Soros are not immune to the pitchforks from the crazy left. Could get interesting in the years to come.
Correct, I was not trying to obscure facts. The probublica article goes into detail on the income of a couple people and gives specific explanations. It's certainly more complicated than my quip.

My understanding is essentially. Get a 100MM loan on your stock, use some of the loan itself to pay the interest on the loan, use the interest on the loan as a tax loss to avoid paying taxes on other actual income. At the end of the day you die with a ton of assets and a ton of liabilities. You didn't pay any taxes you just shifted money around in creative ways.

At the end of the day you avoided paying any taxes. Not really a left or right to it.
 
Correct, I was not trying to obscure facts. The probublica article goes into detail on the income of a couple people and gives specific explanations. It's certainly more complicated than my quip.

My understanding is essentially. Get a 100MM loan on your stock, use some of the loan itself to pay the interest on the loan, use the interest on the loan as a tax loss to avoid paying taxes on other actual income. At the end of the day you die with a ton of assets and a ton of liabilities. You didn't pay any taxes you just shifted money around in creative ways.

At the end of the day you avoided paying any taxes. Not really a left or right to it.
What lender will allow you not to pay your loan back but only the interest on the loan? Asking for a friend.
 
Purchasing power of minimum wage has been declining for decades and an increase in minimum wage does not result in a 1:1 increase in prices.
 
Correct, I was not trying to obscure facts. The probublica article goes into detail on the income of a couple people and gives specific explanations. It's certainly more complicated than my quip.

My understanding is essentially. Get a 100MM loan on your stock, use some of the loan itself to pay the interest on the loan, use the interest on the loan as a tax loss to avoid paying taxes on other actual income. At the end of the day you die with a ton of assets and a ton of liabilities. You didn't pay any taxes you just shifted money around in creative ways.

At the end of the day you avoided paying any taxes. Not really a left or right to it.
What happens when Jeff or Elons paper money stock portfolio shits the bed and the lender says pay the loan back. They then have to sell stock to cover the loan and pay the capital gains tax on the sale. You guys seem to want them to make annual payments based on whatever the current inflated value of their portfolio is at the time. That would put an end to stocks as an investment vehicle. Probably where we are headed though.
 
What lender will allow you not to pay your loan back but only the interest on the loan? Asking for a friend.
Is you point that since I'm not a tax lawyer, and cannot explain to you how people avoid taxes in perfect detail that the issue does not exists?

Bro I can't really explain why one needs to change the oil on their car, I know it gets gunky over time. Changing your oil is a good idea, not changing your oil is a problem.

The fact that I don't have a complete understanding of why and how the ultra wealthy avoid they don't does not negate the fact that they don't.

What happens when Jeff or Elons paper money stock portfolio shits the bed and the lender says pay the loan back. They then have to sell stock to cover the loan and pay the capital gains tax on the sale. You guys seem to want them to make annual payments based on whatever the current inflated value of their portfolio is at the time. That would put an end to stocks as an investment vehicle. Probably where we are headed though.

I totally get that and I'm not suggesting that, I'm suggesting that you tax liquidity and the generation of liquidity. Again, I'm not the guy to figure that out, I'm not that smart. If Bezos led an 80k a year life and had a big portfolio then yeah pay 80k in taxes. The point is he leads a $XXX a year lifestyle and does not pay taxes. He is converting his portfolio into other assets and that conversion is not being taxed, when you convert your work to assets it is, it should be the same.
 
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What lender will allow you not to pay your loan back but only the interest on the loan? Asking for a friend.
If you have $100 million in assets there is an entire world of banking options that open up to you that the average person has never heard of.

But it’s not they never get paid back, it’s that they get paid back so far in the future that the wealthy person either dies first and it comes out of the estate or if paid during life at the least they got to continue to enjoy growth on the underlying asset for many more years before taking the gain - a benefit your average stiff doesn’t get.

But lots of loans never get paid back. Millions of retiree refinance their homes in the last few years. Most will never be around to make that 360th payment. So loans don’t get paid back in lifetime all the time.
 
What happens when Jeff or Elons paper money stock portfolio shits the bed and the lender says pay the loan back. They then have to sell stock to cover the loan and pay the capital gains tax on the sale. You guys seem to want them to make annual payments based on whatever the current inflated value of their portfolio is at the time. That would put an end to stocks as an investment vehicle. Probably where we are headed though.

Nope - working stiffs already have that deal. It’s called required minimum distribution (of 401k). Also lots of tax rules around loan proceeds and interest payments that could be tweaked. There are ways to equalize the tax drag between wage earnings and passive earnings - and it would be way better for 99.99% of Americans. Because frankly, refusing to do so is screwing the doctors, lawyers, engineers, and two income families with jobs like teaching and nursing. Because we won’t tax the $100s of millions we have to keep jacking up tax rates on the middle and upper middle class to pay the bills. It drives talent and capital to unproductive finance careers/activities (just moving money around to arbitrage tax and finance rules) rather than productive activities like making something or providing a service.
 
Would a flat consumption tax not accomplish that? What are the arguments against that? There would be no loopholes for the ultra rich to hide in.
Can’t thumb type a long enough reply on a dying iPhone to do your question justice, but in short, consumption taxes are actually better for the rich and worse for the working class. It’s driven by the percent of your “income” that you then need to spend to live. If you make $40k a year you probably spend 90+% of it. If you just realized $100 million in stock gains you probably spend 5% of it. Plus lots of ways to game consumption for the rich.
 
Can’t thumb type a long enough reply on a dying iPhone to do your question justice, but in short, consumption taxes are actually better for the rich and worse for the working class. It’s driven by the percent of your “income” that you then need to spend to live. If you make $40k a year you probably spend 90+% of it. If you just realized $100 million in stock gains you probably spend 5% of it. Plus lots of ways to game consumption for the rich.
Aka the corporate jet, car, credit card, etc

I didn’t spend $5000 on stripper, my “company” did and took an “entertainment” write off.
 
Nope - working stiffs already have that deal. It’s called required minimum distribution (of 401k). Also lots of tax rules around loan proceeds and interest payments that could be tweaked. There are ways to equalize the tax drag between wage earnings and passive earnings - and it would be way better for 99.99% of Americans. Because frankly, refusing to do so is screwing the doctors, lawyers, engineers, and two income families with jobs like teaching and nursing. Because we won’t tax the $100s of millions we have to keep jacking up tax rates on the middle and upper middle class to pay the bills. It drives talent and capital to unproductive finance careers/activities (just moving money around to arbitrage tax and finance rules) rather than productive activities like making something or providing a service.
Knock yourself out. Go get the Gates, Bezos, and Buffetts and make them pay their "fair share". I'll cheer you on.😉
 
Knock yourself out. Go get the Gates, Bezos, and Buffetts and make them pay their "fair share". I'll cheer you on.😉
I don't care that much about the few outliers - greed or envy has nothing to do with my concern. But there are tens of thousands of folks you have never heard of paying little or no taxes due to our fundamentally flawed definition of "income". And I don't want the fix to fund crazy future programs, I want the fix to reduce the current bizarre market incentives it is creating and to pay for the bills we already have coming due. I do not come from a place of liberal "tax the rich" - I would be happy to put my conservative cred up against anybody - but there is nothing conservative about arbitrarily exempting one type of compensation from taxation over another -- That is chrony capitalism at its lowest.
 
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