I'm not a billionaire but I don't like any tax that's decided by the people instead of legislators and my opinion is we should be voting for legislators that understand the will of the people and try to make it happen in a complex system that normal people don't fully understand.
We elect people to dig into all of the details of millions of pages of laws and regulations and make things actually work, and if we don't trust those people then I think we need to vote for other people.
u/gcarson8 wrote (the comment Michael replied to):
Honest question. Can you share some ideas?
u/michaelnovatireplied·
I do NOT support this, but it's an alternate idea:
*Increase corporate taxes and fees on their businesses.*
Take the profits out of the multi hundred billion dollar cash hoards which by proxy lowers the earnings and stock price of companies, which lowers billionaires net worth.
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/michaelnovatireplied·
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.
u/OriginalOpulance wrote (the comment Michael replied to):
That will just cause the businesses to relocate to a lower tax jurisdiction like all of these proposals will cause.
You also assume interest margin is profits, it’s not. Interest on loans also isn’t necessarily compounding, unless you are explicitly adding that interest expense
u/michaelnovatireplied·
Yeah I agree, but just proposing more ideas, I think the average person should be aware of and think about all options they can before voting for one random solution proposed to the masses via a proposition.
u/km3r wrote (the comment Michael replied to):
A simple solution: treat backing a loan with an asset as a liquidation event for said asset. A home you just bought would have no gains. Billionaire using stock as the asset, would have gains.
u/michaelnovatireplied·
Well the reason they don't sell is to avoid the taxes so doing this would effectively force them to sell -> diversify -> and then use THAT for a loan, which shouldn't be double taxes AGAIN.
I think there is a room for some kind of taxes here though, maybe just a compromise? Like Pay 5% on line of asset backed line of credits draw over $1M or something?
u/fb39ca4 wrote (the comment Michael replied to):
It's not double taxed, as the price at the time of the loan becomes the new cost basis when the shares are sold.
u/michaelnovatireplied·
Yeah that's right. What about the gains though while the loan is running.
E.g. I have $1B of Google stock and I get a line of credit and pay $400M in taxes left with $600M for the loan and then stock 10X's over the next 10 years. and the line has $6B backing it tax free?
But I see what you're saying that the initial amount isn't double taxed if they do it all at the same time.
u/Every_Run1248 wrote (the comment Michael replied to):
How has that worked so far? Elected legislators are increasingly reliant on funding from the wealthiest people in the country. Unless you've got a dedicated voter base like Bernie Sanders or someone, proposing a tax like this is likely to get you primaried by a billionaire-funded
u/michaelnovatireplied·
If we don't trust the system or at least feel like we can impact it then no propositions for taxes will fix that, we need to put pressure on the system being fixed before rogue propositions with consequences we don't understand.