Comment by sschueller
Comment by sschueller 4 days ago
How about instead of taxing them any differently than now, we prevent them from borrowing against their assets? Force them to sell their assets and pay capital gains.
Comment by sschueller 4 days ago
How about instead of taxing them any differently than now, we prevent them from borrowing against their assets? Force them to sell their assets and pay capital gains.
This is something I've been in favor of for some time.
Obviously the tax basis in the assets would also be stepped up by this action.
The US should also get rid of the step up in basis at death. The recipient of an illiquid asset such as a family business should have a period of time (perhaps five or ten years from the triggering death depending on the type of asset) to "pay up" the tax basis "to market" at the time of death. Gains in liquid assets (such as publicly traded stock) should be taxed at the market value at the time of death by the estate or trust and passed on to beneficiaries with that adjusted tax basis.
> The US should also get rid of the step up in basis at death.
This would actually fix the issue without my suggestion, but it is a harder pill to swallow for the "soon to be rich" Americans that tend to vote against their current economic interests.
This makes more sense. I hate when people talk about taxing the “net worth” of some rich guy when a good part of that net worth is locked into invested companies who are (hopefully) being taxed already. The borrow scheme should be the thing being taxed really, because is a shadow realization of profit (they are borrowing against the current value of their assets)
The book about rules and regulations on this law would be larger than divorce law book.
if not borrowing against assets, do people borrow based on their word?
Or better than that, loans backed by assets above some "jumbo" threshold ($10M?) triggers a capital gain on those assets in the collateral.
So if you get a $150M loan off of your amazon shares that on paper are worth $150M, but you paid $100M, you have a cap-gain of $40M, and at 20% tax, $8M fills the IRS's coffers.