That wasn't in your orginial post, if you added that, I didn't see that.You said the person took a loan for $500K and invested it, and got $200K.....have you redefined that?In your hypo the $200K would be taxed, at what rate would depend on how long the investment was.....long v short term. Then in your hypo the person then still has to pay back the loan, which he took for $500K.....so whatever is left after being taxed on that $200K would go to paying the creditor, and he'd still be in teh hole $300K plusYou suggested taking a $500K loan, to invest, but take it out at $200K and call it profit! Come on man!I am not, but the person in your hypo surely is, especially if they are listening to your advice.it's not profit, when he still owes $300K....obviously you know very little about finance if you think it is....he's actually in the hole $300K, well more then that, because he had to pay taxes on that $200K, so he has even less to pay off the loanum no not at all...you owe money, you are in debt...that's not a good place to be at all, even with a low interest rate In your hypo the individual lost money...that's a horrible place to beThe hypo you put further before, the investor that took the $500K loan, invested it, and made $200K, would pay cap gains on the $200K, then still owe the lender $500K....not a great situation to be init is taxed as soon as he sells his assets and realizes the gainsThe 500K isn't taxed because it's not income it's money you pay to borrow.The only income that's taxed differently are long term investments, that are realized. The reason for that, is that money was first taxed, and we want to encourage people to invest for their future....and that is taxed at the same rate for all levelsaGreat. It's about time we starting paying for things. You all that think everything should be free are going to have to stop your leeching.
Leeching is when you pay little or nothing and expect other people to pay your share and more...... also known as a Democrat.
Why Does Billionaire Warren Buffett Pay a Lower Tax Rate Than His Secretary? | The Motley Fool
I’ve read that article many times. All the more reason why his secretary should keep more of her paycheck. Watch and see what happens.
The argument is that income should all be taxed as income. Earlier it was noted that everyone should be taxed the same. O.K.
The money is NOT taxed. The 'profit" has NEVER been taxed. This is one of the most accepted lies of the gullible.
Even then it's hardly always true. Guy borrows $500,000, invests it and makes $700,000. None of that had been taxed. He pays a lower rate on that $200,000 than the poor guy busting his butt making $60,000.
That needs to end.
you don't know much about how borrowed money is taxed do you?
If you borrow 500K you have to pay it back. BUT the loan principal you pay back is not a tax deduction the interest is the only thing that gets treated as a write off. So the 500K you use to pay back the principal comes from the after tax profit of the business.
Which has nothing to do with what I said.
And the 700K will be taxed as soon as he sells the assets.
So the profit will be taxed. So you're wrong that none of the money is taxed.
I didn't argue that. I argued ONLY the $200,000 is taxed.
So? The $200,000 is taxed, not the $700,000 which means nothing was taxed twice.
OK a little clarification is needed here.
Did he make 700K or 200K
The initial 500K isn't part of what he made it was the purchase price of the stock.
So if he made 700K then his stock has to be worth 1.2 million. The 500K isn't taxed because it is not income but a loan and has to be paid back to the bank with interest. ((banks don't usually make loans for stock market speculation but we'll ignore that for now)
So if you want the 500K loan principal to be taxed then all loan principals for all loans have to be taxed. Do you really want to pay tax on your mortgage principal?
I clearly stated the scenario early on.
At near zero interest rates that's a pretty darn good place to be.
Please don't speak to me on finance. You fully understand that the $200,000 is profit, not what he is left with.
This has to be a liberal....now they are going to ask for a bailout
You are only digging your hole further.
I offered no advice.
The money is NOT taxed. The 'profit" has NEVER been taxed. This is one of the most accepted lies of the gullible.
Even then it's hardly always true. Guy borrows $500,000, invests it
. None of that had been taxed. He pays a lower rate on that $200,000 than the poor guy busting his butt making $60,000.
That needs to end.
Exactly what I said.
You really are incapable of reading. Or adding,.......I can't tell which.
Do words mean something different to you?
and makes $700,000
So yes, the person would pay taxes on $700K...depending on the lengh of the investment, depends the rate....then he'd have to pay off his creditor