u/OriginalOpulance wrote (the comment Michael replied to):
You can tax margin loans that are used for consumption as income which is the primary way the uber wealthy spend money without selling assets.
u/michaelnovati replied ·
This is indeed how wealthy people spend without selling assets, but this is also how mortgages work on houses. Billionaires pay interest on that borrowing and the interest goes to the banks as a profit.
If you have $1B of stock, get a line of credit and buy a $300M yacht on it. You are paying 4% (i.e. $12M a year COMPOUNDING) for life to the bank that loaned it to you.
A mortgage is an asset-backed loan too!
Is it fair that billionaires get lower interest rates? Maybe yes, maybe no, but I think there is something there in that interest.