As income? It would have to be a much much lower rate than that. And how would you make sure this doesn’t harm middle and lower class borrowers? Mortgages, car financing, home improvement, debt consolidation loans, etc? Normal people get loans too. It would make homeownership completely impossible for anyone not a multimillionaire.
I’m trying to say that it would be very difficult to just have a ton of little carve-outs for specific loan types that primarily non rich people use. You’ll have things like people getting a $100k loan secured by a way overvalued car. Ok so you introduce regulations to appraisals, that would require a massive new government bureaucracy. Now everything that secures a loan requires an appraisal, so that raises the cost. You have a carve out for credit cards, so rich people invent a “credit card” that only has a 3% interest rate that you can only get approved for if you have a certain amount of assets. So now you set more regulations for credit cards and unsecured debt. And on and on.
It would be even more byzantine and difficult than existing tax laws. Income is a relatively straightforward concept. Unrealized income (aka wealth) is not.
So if you get a loan for 100k, and pay back 100k + interest, what are you taxed on?
The 100k loan
As income? It would have to be a much much lower rate than that. And how would you make sure this doesn’t harm middle and lower class borrowers? Mortgages, car financing, home improvement, debt consolidation loans, etc? Normal people get loans too. It would make homeownership completely impossible for anyone not a multimillionaire.
I literally said in the thing that primary residence mortgages and primary vehicle car loans would be exempt.
Are you actually reading anything I posted here or are you just trying to sealion for the billionaires?
I’m trying to say that it would be very difficult to just have a ton of little carve-outs for specific loan types that primarily non rich people use. You’ll have things like people getting a $100k loan secured by a way overvalued car. Ok so you introduce regulations to appraisals, that would require a massive new government bureaucracy. Now everything that secures a loan requires an appraisal, so that raises the cost. You have a carve out for credit cards, so rich people invent a “credit card” that only has a 3% interest rate that you can only get approved for if you have a certain amount of assets. So now you set more regulations for credit cards and unsecured debt. And on and on.
It would be even more byzantine and difficult than existing tax laws. Income is a relatively straightforward concept. Unrealized income (aka wealth) is not.