<instructions>Your goal is to analyze the following comment and estimate how highly it will be upvoted by the Hacker News community.</instructions><comment><author>freddie_mercury</author><text>You don&amp;#x27;t have to repay anything. You die and your estate pays off the balance.&lt;p&gt;The basis is stepped up at death and the estate can then sell with zero tax to settle the debt.</text><parent_chain><item><author>throwawayffffas</author><text>&amp;gt; &amp;quot;tax the income&amp;quot; is flawed because it allows to borrow as much as your wealth allows, and live your life exactly as if you had that in income, without ever paying the income tax.&lt;p&gt;I don&amp;#x27;t see how that can be true, you eventually have to repay the loan, to do that you need income which will be taxed. For example if you borrow 100000 dollars for one year with 3% interest you will have to pay to the bank 103000 dollars, as far as I understand you can only write off the 3000 dollars on your taxes. The reason rich people borrow against their equity is because they don&amp;#x27;t want to sell it and their equity makes them more money than the interest rate on their loans.&lt;p&gt;Furthermore while the article does distinguish wealth from income, it fails to distinguish realized from unrealized gains. Taxing unrealized gains comes with two very significant downsides.&lt;p&gt;Firstly to make the system fair it should provide tax credits for unrealized losses which means when the market goes down all of these people will use that tax credit to cancel out the huge salaries they will be paying themselves on that year.&lt;p&gt;Secondly while a tax on unrealized gains will be annoying to rich people it will be devastating to small time investors, because it will force them to liquidate their minor positions in order to pay their taxes.&lt;p&gt;To give a concrete example lets assume a college grad has a single share of amazon he bought last year for around 2000 usd, today that same share is worth around 3000 usd that&amp;#x27;s 1000 dollars of gains if our hypothetical student has to pay income tax on that 1000 dollars let&amp;#x27;s say 20% because he also has income. He will have to pay with his income (which has already been taxed) or he will have to sell that stock essentially robbing him of the future gains he could have if he held that stock.</text></item><item><author>dgan</author><text>This article does &lt;i&gt;not&lt;/i&gt; conflates income and wealth, stop saying that. This is NOT what it says. 
Thats&amp;#x27; the whole damn point, they say that the system &amp;quot;tax the income&amp;quot; is flawed because it allows to borrow as much as your wealth allows, and live your life exactly as if you had that in income, without ever paying the income tax.&lt;p&gt;I am quoting &amp;quot;Their wealth derives from the skyrocketing value of their assets, like stock and property. Those gains are not defined by U.S. laws as taxable income unless and until the billionaires sell&amp;quot;</text></item></parent_chain></comment><story><title>IRS records reveal how the wealthiest avoid income tax</title><url>https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax</url></story>
<instructions>Your goal is to analyze the following comment and estimate how highly it will be upvoted by the Hacker News community.</instructions><comment><author>imhoguy</author><text>&amp;gt; I don&amp;#x27;t see how that can be true, you eventually have to repay the loan, to do that you need income which will be taxed.&lt;p&gt;You refinance constantly.</text><parent_chain><item><author>throwawayffffas</author><text>&amp;gt; &amp;quot;tax the income&amp;quot; is flawed because it allows to borrow as much as your wealth allows, and live your life exactly as if you had that in income, without ever paying the income tax.&lt;p&gt;I don&amp;#x27;t see how that can be true, you eventually have to repay the loan, to do that you need income which will be taxed. For example if you borrow 100000 dollars for one year with 3% interest you will have to pay to the bank 103000 dollars, as far as I understand you can only write off the 3000 dollars on your taxes. The reason rich people borrow against their equity is because they don&amp;#x27;t want to sell it and their equity makes them more money than the interest rate on their loans.&lt;p&gt;Furthermore while the article does distinguish wealth from income, it fails to distinguish realized from unrealized gains. Taxing unrealized gains comes with two very significant downsides.&lt;p&gt;Firstly to make the system fair it should provide tax credits for unrealized losses which means when the market goes down all of these people will use that tax credit to cancel out the huge salaries they will be paying themselves on that year.&lt;p&gt;Secondly while a tax on unrealized gains will be annoying to rich people it will be devastating to small time investors, because it will force them to liquidate their minor positions in order to pay their taxes.&lt;p&gt;To give a concrete example lets assume a college grad has a single share of amazon he bought last year for around 2000 usd, today that same share is worth around 3000 usd that&amp;#x27;s 1000 dollars of gains if our hypothetical student has to pay income tax on that 1000 dollars let&amp;#x27;s say 20% because he also has income. He will have to pay with his income (which has already been taxed) or he will have to sell that stock essentially robbing him of the future gains he could have if he held that stock.</text></item><item><author>dgan</author><text>This article does &lt;i&gt;not&lt;/i&gt; conflates income and wealth, stop saying that. This is NOT what it says. 
Thats&amp;#x27; the whole damn point, they say that the system &amp;quot;tax the income&amp;quot; is flawed because it allows to borrow as much as your wealth allows, and live your life exactly as if you had that in income, without ever paying the income tax.&lt;p&gt;I am quoting &amp;quot;Their wealth derives from the skyrocketing value of their assets, like stock and property. Those gains are not defined by U.S. laws as taxable income unless and until the billionaires sell&amp;quot;</text></item></parent_chain></comment><story><title>IRS records reveal how the wealthiest avoid income tax</title><url>https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax</url></story>