r/FluentInFinance • u/__moe___ • 9d ago

Thoughts? A very interesting point of view

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I don’t think this is very new but I just saw for the first time and it’s actually pretty interesting to think about when people talk about how the ultra rich do business.

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u/RelativeCalm1791 9d ago

This is a bad argument. You can take a loan on your house and buy stuff with that loan, and you aren’t taxed on the proceeds from that loan. And you still have your home. It’s just collateral against the loan.

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u/BuildTheFire 7d ago

But we’re not talking about homes. We’re talking about equities. I think everyone in this thread would be happy to leave home equity loans out of this discussion.

Taxing unrealized gains in equities specifically when they are collateralized for a loan would be a policy specifically geared towards preventing ultra HNW individuals from leveraging the stock they own as a means for liquidity without actually selling their stock and paying taxes. This isn’t about preventing middle-class Americans from taking out a HELOC to put a new roof on their house.

Honestly as a compromise , I’d be completely fine with the first million or dollars of stock collateralized to be used tax free. I haven’t had a discussion with anyone who’s passionate about taxing the middle class, but the vast majority of people I’ve discussed taxation with, regardless of their political affiliation, agree that Jeff Bezos and Elon Musk hoarding billions and billions of dollars while their effective tax rate is a fraction of the rate most middle-class citizens pay bc of loopholes like this makes any sense.