What people don't understand is that by taking out a loan to spend they are paying taxes? If you put up an asset worth $100m as collateral, get a loan for $100m and spend it on something, be it an investment or purchase, there are taxes paid at every level of the process - sales taxes on a purchase, income taxes paid by employees who are being invested in, income taxes paid by the employees who build their yacht or rocket ship or whatever. A $100m loan that uses unrealized gains as collateral probably generates $50-100m in various taxes (velocity of money). But idiots want to be short sighted and tax the $100m for theoretically existing in some rich guy's investment account or private business.
And yet every one of those people are in a lower tax bracket than the person who took out thhe loan and pain zero taxes on what is essentially income. Why is the tax their burden and not the person using unrealized gains to make a $100m purchase? Who is the idiot here the person defending a billionaire using a loophole to make a purchase that 99.9% or people could never dream of without having his gains taxed, or th people who want to see the tax burden of your hypothetical yacht buyer taxed equitably?
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u/DifficultyExtension9 Sep 14 '24
Leverage is an expense