Mastodawn

Willow Brook 💜Mar 29

Honestly the fact that Elon ain't even a billionaire if you counted the green he could pull outta the bank says a lot about the scam of modern economics.

The vast majority of his reported wealth is just the stocks he has in his companies, which means it's tied to how valuable people think Tesla, SpaceX, etc are worth. If something happened to make people not care about them anymore, his net worth would plummet.

This can apply to the economy as a whole. Depressions and recessions happen when the value of something changes drastically and people panic about it, exacerbating the issue.
You're rich when there's a chasm of difference between how much you actually own and how much you've convinced the world you own.

I don't think being rich is inherently bad, but I do think that it's extremely difficult to attain that kind of wealth without lots of other people getting put out in some way. A few of them come by it honestly through sheer luck. I think David Tran of Huy Fong and whoever founded Costco are on this list. Not entirely without controversy, but saints in comparison.

@Paradox Considering how vastly overpriced tesla is currently, I do expect his worth to plumit at some point.

That said, you don't need to have a billion in your account. If musks needs money, due to his stock, he has practically unlimited 0% credit. I am pretty sure if he really wanted he could go to the bank and take out a billion

Willow Brook 💜Mar 29

@Burrson
I think there's a specific procedure for that, if he needs to use stock. Sometimes you just sell it (liquidating), sometimes it's just collateral.

@Paradox I am pretty sure you try avoiding liquidating, cause you'd need to pay taxes on that. You don't need to pay taxes on credit

Willow Brook 💜Mar 29

@Burrson Sure, yeah.
(doesn't understand this shit at all)

@Paradox it quite simple, if you sell shares, you pay capital gains tax of about 20%. But if you go to a bank and give them the shares as collateral for the money they are worth they give you a pretty much 0% apr loan.

That is if you are rich enough. Cause Elon musk ain't gonna default. And if he does, they can just sell the shares.

That being said. If his company's tank massively, the banks are gonna get nervous and start taking interest, which would considerably hurt him

Willow Brook 💜Mar 29

@Burrson It is really weird that actual money gets taxed, but things worth money aren't... unless they're expensive things like houses, cars, boats, shit like that.
Yet stocks aren't taxed. But I guess I could "barter" using crates of smartphones or shirts or whatever?

Also I just had to look up apr and it's literally just compound interest rate. XD

@Paradox oh yea it it is XD

Sry, sometimes I am little to much into finance and forget what is common knowledge.

As for the taxes. Normally everything gets taxed. I am not 100% sure how the US handles it. But here in Germany I could pay you potatoes or smartphones and those would be taxed against their fair market value.

It is just that sitting wealth doesn't get taxed (anymore, there used to be a tax :( ). Combine that with loan logic and it's, in my opinion, low-key tax fraud.

Willow Brook 💜6d ago

@Burrson So it turns out we tax barter goods the same way as cash.

I've never heard of a sitting wealth tax. We definitely don't have that.

@Paradox its not as outlandish as it sounds, its practically like property or land tax.

Even from a pure capitalist view there are some very reasonable arguments for a wealth tax

Willow Brook 💜6d ago

@Burrson Do tell.
Cuz richies here dodge taxes all the time, making arguments about investment power, when really they're excuses to keep the wealth gap wide and the poors from getting powerful.

Or at least, that's a strong sentiment among them, regardless of how many actually have it or how strongly they do.

@Paradox One argument that is probably the most agreeable with classic economists is that, by applying a small tax you froce people to actually use their money to create economic activity. Either by investing or spending.

It's basically the same reason why centralbanks try to keep a small amount of inflation. Cause with that, just keeping money in a bank account loses you buying power, so instead you invest it into something that gives you a return.

@Paradox A wealth tax would widen that thing that aren't money. Like image you you have a big tool shed. You can just let it sit there. But if they tax it, you'd be advised to rent them out to neighbors or stuff.

Willow Brook 💜6d ago

@Burrson
I think what confuses me here is I imagined a wealth tax would impact those with lots of money more.

Like someone who barely counts as middle class is chilling, but someone who lives in a mcmansion starts having to plan around it.

@Paradox from a pure economic view it just makes sense to have it.

But as with all policies one should also consider the social angle. I'd image such a tax would be progressive and have a high free amount. I reckon its barely worth it to try and tax the wealth of someone's pc or car or cash they got laying under their matress

Willow Brook 💜1d ago

@Burrson
> social angle
Yeah see that doesn't work over here. We've got people with more money than God trying to convince us they deserve all that money, meanwhile they operate a private company so entrenched in national infrastructure it oughta be a public service, and their workers are underpaid.

@Paradox sounds a bit like Aristotles state theory but the wrong way around. After democracy you are supposed to have chaos, then a king.

Not go back to a an elite that owns public grounds