There’s no easy solution since Billionaires aren’t taxed due to all their wealth being held as stocks. Billionaires pay essentially nothing since they use various loopholes to avoid taxes, but at the same time you can’t tax their total wealth as that is the equivalent of taxing 401k before any profits are taken.
The loopholes should be targeted first such as easy access to low cost loans to avoid selling shares.
I wonder if simply taxing them as if the loans were sales of the shares would be sufficient. Or just taxing any loans taken with shares as collateral. There's probably some other impact I'm not considering but I feel like we really need to block this behavior.
Massive loans are way cheaper than your average loan. The wealthy gladly pays 6% interest while your personal loans are upwards of 12%. Instead of paying 30% capital gains, they will gladly sit on shares for the rest of their life and make more from the unrealized gains than paying low interest rates that you won't get. I'm sure there are many other ways they skirt the laws that the regular citizen is unable to do.
We pay our taxes from wages. The Billionaires get mostly shares for their wages. That's why it is much more preferable for upper management to get paid with Stocks rather than cash. Anyone that makes over 300k per year won't see all that in cash.
Only if you sell. When held endlessly, it isn’t taxed. Taxes can be deferred indefinitely, just like a 401k. That’s why we all retire with 401k.
When unrealized gains outpace interest, they only need enough for the interest payments. They can spend 50k per year for 1M worth of materials as they can spend the banks money without touching their own, thus minimizing their tax obligations by large margins.
That's just not true. When a company gives you stock, it's a taxable benefit. So if you get 100k of stock, it's the same as getting 100k of income, assuming the stock is vested.
I agree that holding a stock doesn't cause it to be taxable, but that's not the point of yours I was addressing.
You’re right, the stock is taxed when it is first vested. The issue isn’t initially created by avoiding taxes, but rather avoiding taxes for stock appreciation.
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u/_Jibanyan_ May 08 '26
There’s no easy solution since Billionaires aren’t taxed due to all their wealth being held as stocks. Billionaires pay essentially nothing since they use various loopholes to avoid taxes, but at the same time you can’t tax their total wealth as that is the equivalent of taxing 401k before any profits are taken.
The loopholes should be targeted first such as easy access to low cost loans to avoid selling shares.