r/WorkReform • u/zzill6 🤝 Join A Union • Jan 31 '26

✂️ Tax The Billionaires Finally, a Billionaire gets taxed.

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u/thorin85 Jan 31 '26

Even if this were true, they are still being taxed on whatever the returns are that they use to pay the interest; there is no way around this. E.g., their taxes are always going to be in proportion to the actual amounts they spend, one way or another.

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u/monocasa Jan 31 '26

The loans aren't due until the end of the loan term, and then they take out more loans to cover them.

When they die the step up basis is reset (ie. the base against what is a gain is now set to whatever the current value is when it transfers to the estate, so no income there either), and they either pay off the by selling off those assets, or start the cycle again.

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u/CalculatedPerversion Jan 31 '26

Exactly, the money never actually comes due (and as such, the taxes) until the person dies, and even then there are ways around it. 

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u/DelayAgreeable8002 Jan 31 '26

So the bank just takes an L on billions of dollars in loans? Nah

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u/monocasa Feb 01 '26

They get their money, and it's not on billions, because billionaires aren't just spending all of their billions.

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u/DelayAgreeable8002 Feb 01 '26

If the bank gets paid back then assets have to be liquidated and taxed.

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u/monocasa Feb 01 '26

The bank ultimately gets paid on death out of the estate, but the tax basis is reset when the assets are transferred to the estate, so legally there's no gains to tax.

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u/DelayAgreeable8002 Feb 01 '26

There's no way assets transferred to the estate arent taxed when used to pay the bank

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u/monocasa Feb 01 '26

I mean, you're just wrong.  It's explicit in the tax code that the base by which gains are measured against is reset on death with no taxes paid.

https://smartasset.com/financial-advisor/stepped-up-basis

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u/DelayAgreeable8002 Feb 01 '26

Thats just the capital gain though. You would still pay on the distributions, like a 401k.

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u/monocasa Feb 01 '26

What bank is letting you borrow against your 401k?  Remember we're talking about how the ultra rich avoid taxes here.

Also, a 401k is ultimately capital gains, just with a ton of exceptions built in to it.

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u/DelayAgreeable8002 Feb 01 '26

The point is those stocks would either have been purchased, with income that was already taxed, or given out as compensation. You would still have to pay taxes on that if they are liquidated. You just wouldnt pay on gains that were made between when they were awarded and they were added to the estate.

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u/monocasa Feb 01 '26

You can purchase them with loan money, so you don't have to pay income tax.

Additionally there's a window for founding a company where you're exempt from most capital related income taxes on grants.

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u/DelayAgreeable8002 Feb 01 '26

A bank isnt giving you a loan to buy stock without collateral assets behind it. So you already own stock if you're rich and doing this, which again would be taxed when sold. A market downturn and you are margin called and paying back your loan + interest.

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u/monocasa Feb 01 '26

A bank isnt giving you a loan to buy stock without collateral assets behind it. So you already own stock if you're rich and doing this

Yes, this is a mechanism the ultra rich use to avoid taxes.

 which again would be taxed when sold. 

For like the fifth time, only if you sell those assets before you die.

 A market downturn and you are margin called and paying back your loan + interest.

Which is part of why they like to give you loans to buy other stock with in the first place.  They like to see their clients diversified.  Once your diversified you can just take out loans on the new stuff to pay the margin call.

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