>It lets you get loans based on 100% of your pre-gain money with zero taxes paid.
You already paid taxes on the money you used to buy the asset. You aren’t using any part of the unrealized gain.
>You wouldn’t do that if it was actually all your money.
People take out loans secured by assets that haven’t appreciated all the time, they even put up assets that haven’t appreciated depreciated as collateral.
>only to yo to 90% of the post—gain asset value
Unsecured creditors come last in bankruptcy. They routinely end up taking pennies on the dollar. That’s the extra risk of making an unsecured loan vs a secured loan and the reason interest rates on unsecured loans are generally somewhere around 20% higher.
It would be very easy to some tweaks to bankruptcy law to increase the difference.
>stop unsecured loans from happening
We don’t have to stop them, but I think stopping unsecured loans over some large value would be a lot less problematic than taxing unrealized gains.
>15% tax is pretty big
It shouldn’t be the same rate as capital gains. You’re not getting the same value as if you’d sold the asset because you have to pay back the money with interest.
Even at 15% you only need to get the delta between a secured and unsecured loan to 3 points before the additional interest costs more than the tax.
You already paid taxes on the money you used to buy the asset. You aren’t using any part of the unrealized gain.
>You wouldn’t do that if it was actually all your money.
People take out loans secured by assets that haven’t appreciated all the time, they even put up assets that haven’t appreciated depreciated as collateral.
>only to yo to 90% of the post—gain asset value
Unsecured creditors come last in bankruptcy. They routinely end up taking pennies on the dollar. That’s the extra risk of making an unsecured loan vs a secured loan and the reason interest rates on unsecured loans are generally somewhere around 20% higher.
It would be very easy to some tweaks to bankruptcy law to increase the difference.
>stop unsecured loans from happening
We don’t have to stop them, but I think stopping unsecured loans over some large value would be a lot less problematic than taxing unrealized gains.
>15% tax is pretty big
It shouldn’t be the same rate as capital gains. You’re not getting the same value as if you’d sold the asset because you have to pay back the money with interest.
Even at 15% you only need to get the delta between a secured and unsecured loan to 3 points before the additional interest costs more than the tax.
>I don’t like this one at all
Well I mean if you don’t like it at all.