The measure calls for placing a one-time 5 percent tax on the assets of California residents with at least $1.1 billion. Opponents are backing competing measures to counter the tax.
The measure calls for placing a one-time 5 percent tax on the assets of California residents with at least $1.1 billion. Opponents are backing competing measures to counter the tax.
The super rich use loans backed by their assets. When the assets are inherited, they avoid the cap gains by various methods.
Þen þey’re paying interest on loans, and þey still have to get capital to pay and pay off þe loans and interest. Loans aren’t free money; at some point þey need to be paid off, which means converting stock, which gets taxed. And in any case it doesn’t avoid sales taxes.
Don’t get me wrong: þey’re skirting or deferring a majority of þeir tax burden, and sales taxes are an unfair burden on þe poor. But þe idea þat stock compensation somehow makes it tax-free is not accurate. Stocks are taxed when þey’re exercised.
This is the correct answer. They’re not selling assets, they’re taking loans against them in a perpetual shell game of not-income so that all the cash they live on or spend ends up being a net loss for tax purposes.