The scam of income tax is that it's progressive on paper but not in practice.
Perfectly put. It's always bothered me that the tax brackets don't continue on in a logarithmic fashion, e.g. new brackets at 1.5 million, 15 million, 150 million, etc.
I don't think stepped-up basis should go away though, otherwise it's just the government getting a second cut of the inflation it causes.
The bigger issue for society is that our equity markets just don't have any real risk of losing your lunch anymore, so these strategies emerge.
(another one in the same vein is that when you donate an appreciated asset, you get a tax deduction of the unrealized value)
That they have to pay back with interest. This made a little sense except for short-term loans when one had liquidity issues when interest rates were close to zero or in very, very limited circumstances where someone knew they were close to death - but that more has to do with the broken way we handle taxing inheritance.
With the prime rate is 7.5% today, it makes far less sense.
> "re-invest" (no profit) into durable assets for their business
Capital expenditures aren't subtracted from revenue. They have no effect on profit.
This is a cheap slight of hand to confuse unsophisticated readers. It has effect on taxable profit since much of cap ex is deductible.
Since when?
Last I checked, capex was not deductible. You can deduct depreciation of assets over time, but that's not going to offset profit to create a loss unless you're spending far more money than you profited (by say, taking out loans).
There is the expiring bonus depreciation provision on a limited limited class of assets which would let you create a loss, but even that's subject to recapture if you sell those assets.