Recent searches
Search options
Administered by:
How rich people avoid paying tax
(Originally by Instgram user @newmoney.blog)
I've known about this for a while but a piece of the puzzle is missing for me: what's the endgame?
What happens to the debt and collateral when the debtee dies? Is the debt called? Or does the whole arrangement transfer to the next generation?
@LovesTha@floss.social@jmjm @infobeautiful Sell enough shares to pay the (low, because it is a safe secured loan) interest, pay a little tax on that. This puts your effective tax rate at (interest rate * capital gains tax), which is *very* low.
When you die your estate probably pays capital gains taxes, but you have probably set up some trusts to avoid that.
@LovesTha @jmjm @infobeautiful best part about this situation (borrowing massive sums of money à la leveraging assets) is when Teddy Billionaire needs to pay off his debt, he can often convince the bank to minimize interest. I know of a specific NYC millionaire who argued down his loan to the point where he paid a fair percentage less than the loan was worth, by saying he was going to drop $10M into an investment fund.
And he didn't. So he got free money.
@LovesTha @jmjm @infobeautiful
The basis for inherited stock is reset to the value on date of death. If the heirs immediately sell, the capital gain and taxes on that gain would both be zero.
Depending on the size of the estate and state of residence, inheritance taxes may kick in.
But, of course, if the estate is big enough to pay federal inheritance taxes, it's big enough to pay lawyers and accountants to draw up fancy trusts to avoid those taxes.
No wonder we need more IRS auditors...
@joeinwynnewood @LovesTha @jmjm @infobeautiful this! That's a crucial part.
@joeinwynnewood @LovesTha @jmjm @infobeautiful 
. I can't tell you how angry it makes me when I consistently see the loudest progressive voices absolutely refuse to come to terms with the nature of these folks' wealth. I swear to God, most of them think Elon has a Scrooge McDuck vault they can raid and redistribute money from. They are absolutely convinced they have the solution to a problem they absolutely refuse to do the minimum homework in understanding.
@rateexportpilot @LovesTha @jmjm @infobeautiful
The greatest economic and political threat we face is from wealth consolidation ridiculously low taxes on unearned income and wealthy estates, I'm talking the top 1%, is fueling.
We really need to restore Clinton era marginal tax rates, like the day before yesterday. Eisenhower marginal rates would be even better to reverse the trend line.
Remember the deficit at the end of Clinton's administration? There was none! We were running a surplus!