(03-30-2022 04:30 PM)Rice93 Wrote:  I don't think of home equity loans as income per se however I don't have enough insight into tax law to have a great discussion about the topic/definitions.

Appreciate the answer, 93.

FYI, a home equity loan is simply a loan with your house as collateral. And, it cannot be more than the total positive equity you have in it.

Simply replace 'your house as collateral' with 'stock as your collateral' and you have what you talk directly about what should be taxable as income.

For brevity sake, lets just generalize 'stock as collateral' to 'any collateral' for the discussion -- that is any loan with security collateral.

When you feel strongly that loans with stock as collateral should be taxed as income, what is your stance when broadened to 'any collateral'? Disregard current tax law, as we are talking about how current tax law should be changed.

Quote:I will say this: the bottom line is that I believe that our taxes pay for services that are necessary to all of us and the current system seems to allow people ducking out of their tax responsibility.

Could you expand? Is a long term capital gains rate 'ducking out'? I dont think anyone supports complete and total tax fraud/ tax evasion.

But wealthier people do take advantage of items like loss carry over, return on capital exemptions, and capital gains rates. And there are underlying very good reasons for these issue, imo.

As a last question, you said earlier that many of the wealthy use services 'for free' (or something to that effect). Could you expand on the 'for free' that you seemingly target?

I agree that no one wants a free rider --- but the idea that an income tax is based on an accession to wealth contains within it that someone who has a loss to wealth in a timeframe pays no income tax --- there is no accession to wealth.

In this vein, assume a person with net worth of 200 million having a 100% owned company that loses, say, $3 million dollars and another 100% owned company that net cash flows $300,000. In this scenario, the person will owe no taxes, and might even have a several hundred thousand dollar refund based on prior quarterly minimum payments (based on the last year's income tax).

Does this qualify as what you try to describe?

Sorry about the number of questions, but your comments contained some very broad statements that I might be at odds with, and am trying to pin down the basis for the broad statements.