Transcription
I don't actually understand how billionaires avoid paying taxes. Loans? You keep saying that, but how do you pay the loans back? I don't. What do you do when you run out of money? I get another loan. I don't get it.
I think that most people understand at this point that I don't really make a big salary. I own parts of companies, and banks are more than happy to use that as collateral to lend me real money. What do you use for the down payment? Oh, gross, no, I don't do that. You see, poor people like--
Well, what's your net worth? Oh, uh, I don't like, way less than a million. Oh, okay. So will you borrow money that you don't have? I have the money; it's just locked up in equity. I don't do down payments, and as long as the loan is still earning interest, the bank doesn't really need their money back. But if you never actually pay them, isn't it just pretend? Oh, my sweet, sweet child. Fractional Reserve banking would kill you. How do banks make money? By lending it out. Why calling money a loan just to lend it back out to risky poor people? No offense.
So you can just borrow billions until you're dead? As long as my net worth keeps going up. What if it drops, and you don't have more collateral to give to the bank? I would probably create a shell company to bail me out. That seems complicated. We can talk about that another time. If I can't get creative, which is extremely rare, hopefully there's a favorable tax code. Otherwise, I might let the bank seize my assets that I used as collateral. Doesn't that look bad? Sure, but you don't pay capital gains tax if you never realize the gain. But that's a last resort. Otherwise, you just avoid taxes until you die, and then the estate handles it.
Oh, that's actually the best part. When I die, my assets get reevaluated on a step-up cost basis. Why would I possibly know what that means? Right. Yeah, you've probably never known anyone that's died with money. Basically, what I paid for the assets gets reset to what they're worth when I died, so no capital gains tax. Wow. Does the method in which you die change anything? Oh, why would it? I'm just asking for a friend. Like if there was an accident, but there were no witnesses, and someone tried to save you but they failed, like would said hero still get a reward? I'm going to leave now.