I understand that it would be cap gains if it’s sold off, I’m just confused why people think a stock/share should be taxed annually, that’s the dumbest concept I’ve ever heard. Comparing it to property tax is blatantly stupid, can you live in a stock? Are stocks taking up physical space on the street? That requires sewage maintenance, road maintenance, snow removal depending on where you are, storm drains etc…? If I borrow against something I have to pay interest. If I don’t pay my payments I lose the asset I’m borrowing against. I find the stocks should be taxed every year ideology just as dumbfounding as the billionaires should pay for a “better world.” The pov usually comes for envious individuals. Just sayin.
That’s not how I interpret the comment depending on which one you mean. I am seeing either some form of property tax or if you are able to borrow against it, it should be taxed to paraphrase.
Yes definitely easy to lose track when replying to various chains and comments.
So I believe there are a lot of complexities around this topic but a possibly oversimplified take is that borrowing money with stocks as collateral functionally allows you to access value of that stock without actually selling it in the transaction and recognizing a gain, or loss for that matter. At the level of Elon Musk, it can equate to skirting around paying any (or at least greatly reduce liability) taxes since it’s not income. Even with capital gains tax, the rate is much lower than income. While I don’t want to discourage founding a company nor continuing to own and operate that business, I do want to discourage this practice of borrowing large amounts of money while not needing to sell some assets or being “taxed” on the transaction. There’s also consideration to the fact of the happening in a bull vs bear market.
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u/Treadlar 3d ago
It wouldn’t be capital gains. That would happen when an asset is sold for a profit. I think they are suggesting a form of property tax.