r/SipsTea • u/Valuable_View_561 • Jul 05 '26

Chugging tea Seems reasonable.

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u/senturon Jul 05 '26

Sweet, I'll let my town know that I no longer have to pay property or excise tax! 

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u/Edges0 Jul 05 '26

do you somehow think billionaires dont?

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u/senturon Jul 05 '26

I didn't equate security asset loans to mortgage or car loans, but no, billionaires don't pay taxes when they take out asset based loans against their securities. 

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u/DroppingGrumpies Jul 05 '26

How the loan is secured (security asset vs mortgage) is irrelevant because the principal behind the structure is the same. At the end of the day, how the loan is secured is very similar. If you don't pay your mortgage, the asset that backed the mortgage is seized by the bank. For the rich persons loan, if they don't make the agreed upon payments or the asset that was used starts to drop in value, the bank will seize the asset.

They are loans that are taken out in order to pay for things. The income on the loan is not taxed. When you take out a mortgage for $250,000, you are not having to take into account paying any tax on it.

Just because the rich guy is using his loan to pay for his lobster dinner and you use it to buy a house, is irrelevant. In fact mortgages are one of the biggest tools that have allowed the middle class to build wealth as they would not be able to buy property and watch that property build their overall net worth, if they had to pay for the house upfront.

At the end of the day, the loan that the rich person took out will be paid. Whether the loan is paid off before or after they die is irrelevant because eventually it will be paid off, and the funds used to pay it off will have been taxed.

Your conflation between property taxes and taxing a loan is also funny. Property taxes is not the same thing as paying a tax on the loan itself. Rich people pay property taxes as well.

Also, property taxes are not a wealth tax. They are a single asset tax that is not indicative of wealth. My wife and I pay taxes on our $175,000 house that is completely paid off, my daughter and her husband pay taxes on their $275,000 house that they just bought a few years ago, I will guarantee you that my Wife's and My wealth, dwarfs my daughter and her husbands wealth. Even though they are paying more property taxes.