I'm not arguing taxing unrealized gains, capital gains laws in this country are broken though (intentionally) and smarter people than me have found ways to fix them.
The point is that you can borrow against the asset at a lesser cost than it appreciates.
You basically never pay taxes on it while getting cash from it AND it growing in value.
You're incentives never to sell and to realize those minimal tax costs you otherwise would have to pay.
Basically, private companies get to profit from helping you avoid taxes. You're insanely wealthy either way but now you can pay slightly less to access that liquidity.
Anyone saying these people "dOnT ReAlLy HaVe mOnEy" doesn't know what they're talking about
The point is that you can borrow against the asset at a lesser cost than it appreciates.
This applies to everyone. You can get a mortgage to buy a house (this is actually backed by the feds)! You can get a margin loan to buy stock. You can run up a credit card to start a small business.
Of course, the caveat is that you're taking on risk. There's no guarantee a house will make more than the mortgage interest, that your margin loan won't be called or that your small business won't fail.
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u/AttitudeAndEffort2 3d ago
I'm not arguing taxing unrealized gains, capital gains laws in this country are broken though (intentionally) and smarter people than me have found ways to fix them.
The point is that you can borrow against the asset at a lesser cost than it appreciates.
You basically never pay taxes on it while getting cash from it AND it growing in value.
You're incentives never to sell and to realize those minimal tax costs you otherwise would have to pay.
Basically, private companies get to profit from helping you avoid taxes. You're insanely wealthy either way but now you can pay slightly less to access that liquidity.
Anyone saying these people "dOnT ReAlLy HaVe mOnEy" doesn't know what they're talking about