Hello and welcome back to MarketWatch’s Extra Credit column, a weekly look at the news through the lens of debt.
McCaffery said he first started thinking about the idea a few years into his tax law teaching career, when he noticed how certain tax law doctrines could benefit the wealthy. For example, the realization requirement, which means you don’t pay taxes on an asset until it produces cash. — Edward McCaffery, a professor at the University of Southern California’s Gould School of Law, who says he coined the phrase Buy, Borrow, Die When McCaffery first started talking about Buy, Borrow, Die, 25 years ago, he said many were skeptical. For one, there wasn’t evidence that wealthy people were engaging in this behavior. In addition, the approach runs so counter to the way the 99% think about borrowing that it was hard to believe.
“In my opinion, it’s debtors’ prison because I owe money and you’re gonna lock me up for it,” he told AL.com. “How is this the United States, where we’re supposed to have more freedoms than anywhere else in the world, and we’re incarcerating people for not having money?” A big driver of this trend is credentialization, or the idea that jobs require higher levels of education than they used to even though workers are performing the same tasks as in the past. In some cases, that can mean a license that didn’t used to be necessary to perform a job, in others, it means a graduate degree is a ticket to standing out because bachelor’s degrees are increasingly common.
“There’s just been this trend over time of firms and industries that have been trying to shift the cost of training to higher education and that is occupational licensing and that is also graduate education,” he said. The debt forced onto Haiti centuries ago Debt is not only a force in individuals’ lives, it can also destabilize an entire country. The recent turmoil in Haiti in the wake of the assassination of the country’s president, Jovenel Moïse, highlights the role financial exploitation by the international community has played in Haiti’s political and economic challenges.
JillianBerman You forget debt has to be repaid and to get cash to pay debt is a taxable event. Debt just gets you the money upfront, but it has to be repaid with taxable income. And assets do not go to heirs tax free upon death of the wealthy. I don't consider 40% tax rate tax free.
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