America's Billionaires: Borrowing Their Way to Ever More Fabulous Fortunes

[douglas9]

No widely acclaimed artist in the 20th century baited and battled the rich with as much gusto as Diego Rivera. The Mexican painter’s Great Depression-era confrontation with Nelson Rockefeller, then the twenty-something grandson of the world’s single richest individual, captured front-page real estate all across the United States — and far beyond.

The Rockefeller family had hired Rivera to paint the artistic centerpiece of the newly constructed Rockefeller Center in New York. Rivera’s resulting mural contrasted the “debauched rich” with workers on the rise. Right-wingers went apoplectic. Young Nelson, getting hammered, asked Rivera to remove an image of Lenin from the mural. Rivera refused, offering instead to add a portrait of Lincoln.

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How can art like Rivera’s be subsidizing the super rich? These awesomely affluent are using their art collections — and any other assets they may hold, everything from classic car collections to shares of stock in the companies they run — as collateral for loans from America’s biggest banks. Why would billionaires need loans? The simple answer: They don’t need loans. They need tax breaks, and they can get them by borrowing — at exceedingly low interest rates — off their mountains of assets.


https://www.counterpunch.org/2021/08/02/americas-billionaires-borrowing-their-way-to-ever-more-fabulous-fortunes/

[Warpy]

1. Borrow lavish living expenses

pay back the loan when due, deduct the interest as a business expense. That's one of the worst abuses buried in a lot of tax returns of the 0.1%. It works really well if your lifestyle costs millions a year. The IRS would catch you if it was less than that.

They borrow for all sorts of things they could easily pay for, charging themselves interest and taking the tax deduction, interest representing increased income and the tax deduction knocking a little off the original price.

It builds up fast when you "lend" yourself money for pleasure palaces and auctions at Sotheby and Tate Ward to furnish them properly. The right hand pays the left hand interest and Uncle Sugar gives you money back on the deal.

[Chainfire]

2. Those who have the gold make the rules.

That is why a school teacher can pay more in income tax than a "billionaire" president.