You are viewing a single thread.
View all comments View context
6 points

And that ends when they die, at which point the stocks get stepped up in basis so the taxes are almost completely avoided. Or they structure their debts in such a way that certain entities can be bankrupted without impacting the actual assets.

Things get wild when you’re in the 0.1% and above.

permalink
report
parent
reply
3 points

structure their debts in such a way that certain entities can be bankrupted without impacting the actual assets.

I can’t imagine how this isn’t fraud

permalink
report
parent
reply
1 point

It’s just playing by the rules as stated, and we have decided that limiting the liability of corporations is desired.

If you start a business, banks loan a lot to that business, and then the business goes under, you don’t lose your house. That’s the way it’s supposed to work, and the intention is to help small business owners not lose their shirts if things go sideways.

But it also ends up benefiting wealthy people because they can use these legal entities to shelter funds. A common real estate strategy is to have a corporation own your properties, leverage them like crazy, then if the market drops and you’re underwater, bankrupt the company. You’ll lose the properties, sure, but you’ll also lose the debt, so you can end up net-positive.

I think we absolutely need to reform how corporations work and remove liability as the value of the company increases. But in most cases, these wealthy people are just playing by the rules that have been agreed upon. IMO, the solution here is generally fewer rules to let things like fraud laws work, not to create more and more exceptions (because who has the resources to find loopholes? The uber-rich).

permalink
report
parent
reply

Technology

!technology@lemmy.world

Create post

This is a most excellent place for technology news and articles.


Our Rules


  1. Follow the lemmy.world rules.
  2. Only tech related content.
  3. Be excellent to each another!
  4. Mod approved content bots can post up to 10 articles per day.
  5. Threads asking for personal tech support may be deleted.
  6. Politics threads may be removed.
  7. No memes allowed as posts, OK to post as comments.
  8. Only approved bots from the list below, to ask if your bot can be added please contact us.
  9. Check for duplicates before posting, duplicates may be removed

Approved Bots


Community stats

  • 15K

    Monthly active users

  • 6.7K

    Posts

  • 154K

    Comments