You’re talking about income tax rates, and I agree that the top tax rates should be higher, but this won’t fix the problem because billionaires don’t make their money from salaries. Most of their money is theoretical and tied up in ownership of shares of a company.
They can sell shares or earn dividends to make money, so capital gains should also be taxed at a much higher rate. But billionaires often choose not to sell shares either because they have a better option…
They take out low interest rates loans using their shares as collateral. The interest rates they are charged are generally going to be far lower than the interest on their stocks that stay invested,. This is where most of their liquidity comes from, because loans aren’t taxed, and in some regard is almost an infinite money glitch for billionaires.
I think we need to make it illegal to use financial holdings as collateral for loans, at least for starters.
You’re talking about income tax rates, and I agree that the top tax rates should be higher, but this won’t fix the problem because billionaires don’t make their money from salaries. Most of their money is theoretical and tied up in ownership of shares of a company.
They can sell shares or earn dividends to make money, so capital gains should also be taxed at a much higher rate. But billionaires often choose not to sell shares either because they have a better option…
They take out low interest rates loans using their shares as collateral. The interest rates they are charged are generally going to be far lower than the interest on their stocks that stay invested,. This is where most of their liquidity comes from, because loans aren’t taxed, and in some regard is almost an infinite money glitch for billionaires.
I think we need to make it illegal to use financial holdings as collateral for loans, at least for starters.
And maybe a tax on assets over a set limit. Own more than $10M in assets? Time to start paying back society.