this post was submitted on 13 Aug 2024
78 points (97.6% liked)
Personal Finance
3829 readers
2 users here now
Learn about budgeting, saving, getting out of debt, credit, investing, and retirement planning. Join our community, read the PF Wiki, and get on top of your finances!
Note: This community is not region centric, so if you are posting anything specific to a certain region, kindly specify that in the title (something like [USA], [EU], [AUS] etc.)
founded 2 years ago
MODERATORS
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
Income and net worth are different concepts though. You can have a car and be too broke to buy gas.
I think you might be failing to envision just how much money a billion dollars is. If your net worth (Assets - Liabilities + Equity) = one billion dollars, you are among the wealthiest of the wealthiest people in the world.
Now, that probably isn't all just sitting in investments. I'll be very conservative and say half of it is. If you earned 4% annually on that $500M, which is a pretty decent average, you would gross $20 Million.
I don't know about you, but if I had $20 Million, I would never have to work another day for the rest of my life. You see where I'm going with this?
Wouldn’t the $20 Million be subject to the 100% income tax at that point, meaning the net worth billionaire wouldn’t be able to earn any income as it’s all taxed away?
Sure, but let's say they spent 20m. Then their net worth would be under a billion and the next couple of years of earnings would have a lower tax rate.
Even if they never were able to make money again, 20m goes into a billion 50 times. They could overspend for 50 years without making a cent on investments.
I'm sure they'd come up with fun new accounting loopholes though so their assets didn't appear to increase.