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Unrealized Gain - Or how the Uber wealthy pay little tax

For discussion and debate about anything. (Not a roleplay related forum; out-of-character commentary only.)

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Saiwania
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Founded: Jun 30, 2008
Left-Leaning College State

Postby Saiwania » Thu Jun 10, 2021 4:06 pm

Galloism wrote:Um, no, it isn't. Not at all. Not in any way whatsoever.


The method of mark to market accounting was nonetheless used by Enron or Arthur Anderson to "cook the books" for Enron's financial statements. If Mark to Market's flaws are too many, I can't trust it compared to historical cost accounting.

https://corporatefinanceinstitute.com/r ... n-scandal/

In general, mark-to-market accounting runs the risk of being inaccurate. The market value of something at any given time may not reflect the true worth of an asset. If its undervalued, all is usually well. But if its overvalued and really worthless, it means huge trouble and lots of people losing money once the world finds out.
Last edited by Saiwania on Thu Jun 10, 2021 4:19 pm, edited 3 times in total.

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Galloism
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Father Knows Best State

Postby Galloism » Thu Jun 10, 2021 6:08 pm

Saiwania wrote:
Galloism wrote:Um, no, it isn't. Not at all. Not in any way whatsoever.


The method of mark to market accounting was nonetheless used by Enron or Arthur Anderson to "cook the books" for Enron's financial statements. If Mark to Market's flaws are too many, I can't trust it compared to historical cost accounting.

https://corporatefinanceinstitute.com/r ... n-scandal/

In general, mark-to-market accounting runs the risk of being inaccurate. The market value of something at any given time may not reflect the true worth of an asset. If its undervalued, all is usually well. But if its overvalued and really worthless, it means huge trouble and lots of people losing money once the world finds out.

So, Enron’s tactic would be more accurately described as “mark to model”, because the underlying assets were not publicly traded and there was no agreed upon way they could be valued.

Also, it was basically killed by the Sarbanes-Oxley act.

This is fundamentally different than what is being talked about here, where the assets are assets with readily determinable objective fair market value, as it is high volume publicly traded.
Venicilian: wow. Jesus hung around with everyone. boys, girls, rich, poor(mostly), sick, healthy, etc. in fact, i bet he even went up to gay people and tried to heal them so they would be straight.
The Parkus Empire: Being serious on NSG is like wearing a suit to a nude beach.
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Forsher
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Founded: Jan 30, 2012
Liberal Democratic Socialists

Postby Forsher » Thu Jun 10, 2021 9:48 pm

How do they pay the interest?
That it Could be What it Is, Is What it Is

Stop making shit up, though. Links, or it's a God-damn lie and you know it.

The normie life is heteronormie

We won't know until 2053 when it'll be really obvious what he should've done. [...] We have no option but to guess.

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Galloism
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Postby Galloism » Fri Jun 11, 2021 4:35 am

Forsher wrote:How do they pay the interest?

If you mean on the money they borrow against the stock, usually by borrowing money to pay the interest. But the interest isn’t much - especially in this day and age.
Venicilian: wow. Jesus hung around with everyone. boys, girls, rich, poor(mostly), sick, healthy, etc. in fact, i bet he even went up to gay people and tried to heal them so they would be straight.
The Parkus Empire: Being serious on NSG is like wearing a suit to a nude beach.
New Kereptica: Since power is changed energy over time, an increase in power would mean, in this case, an increase in energy. As energy is equivalent to mass and the density of the government is static, the volume of the government must increase.


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Forsher
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Founded: Jan 30, 2012
Liberal Democratic Socialists

Postby Forsher » Fri Jun 11, 2021 4:37 am

Galloism wrote:
Forsher wrote:How do they pay the interest?

If you mean on the money they borrow against the stock, usually by borrowing money to pay the interest. But the interest isn’t much - especially in this day and age.


Wait, is this just a never ending spiral of borrowing money to pay (however little) interest?
That it Could be What it Is, Is What it Is

Stop making shit up, though. Links, or it's a God-damn lie and you know it.

The normie life is heteronormie

We won't know until 2053 when it'll be really obvious what he should've done. [...] We have no option but to guess.

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Galloism
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Founded: Aug 20, 2005
Father Knows Best State

Postby Galloism » Fri Jun 11, 2021 4:39 am

Forsher wrote:
Galloism wrote:If you mean on the money they borrow against the stock, usually by borrowing money to pay the interest. But the interest isn’t much - especially in this day and age.


Wait, is this just a never ending spiral of borrowing money to pay (however little) interest?

Yes, because it’s cheaper than paying the tax - even on a long scale.
Venicilian: wow. Jesus hung around with everyone. boys, girls, rich, poor(mostly), sick, healthy, etc. in fact, i bet he even went up to gay people and tried to heal them so they would be straight.
The Parkus Empire: Being serious on NSG is like wearing a suit to a nude beach.
New Kereptica: Since power is changed energy over time, an increase in power would mean, in this case, an increase in energy. As energy is equivalent to mass and the density of the government is static, the volume of the government must increase.


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Northern Socialist Council Republics
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Founded: Dec 13, 2020
Left-wing Utopia

Postby Northern Socialist Council Republics » Fri Jun 11, 2021 5:44 am

Bombadil wrote:I suppose the main challenge is that whoever does the valuations will be tied up in litigation for years, how do you correctly assess a painting, or a diamond necklace.. i can even see the value of property being squabbled over endlessly.

Just adapt the medieval solution - the owner has an obligation to sell a given piece of property if they receive an offer that is above some multiple of the value they declared for it.

So if you declare your house to be worth $100 and pay taxes accordingly, if I present you an offer of $150 then you have to sell it to me.
Last edited by Northern Socialist Council Republics on Fri Jun 11, 2021 5:50 am, edited 4 times in total.
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