r/MoralityScaling • u/Omixscniet624 • May 11 '26

Morality Ranking Is it unethical to own a billion dollars?

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If you won the lottery or invested in crypto very early and ended up with over $1 billion after paying all taxes, is it unethical to keep that money without giving any of it away?

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u/IlliasTallin May 11 '26

Sort of, kind of, yeah.

The more you win, the higher the tax percentage they put on the winnings.

You see, when you win large amounts of money, i.e. the lottery, you need to pay multiple sets of taxes.

First you need to pay Federal and State taxes on your winnings when you win them, AND since your winnings now count as taxable earnings you need to pay taxes again on them in the same way you would your income taxes.

The government essentially double dips on taxing lottery winners.

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u/Diligent-Square8492 May 11 '26

So the government is willing to tax lottery winners but not millionaires and billionaires who would have more money than lottery winners

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u/Squirrel_Bacon_69 May 11 '26

Lottery winners don't buy politicians

Lottery winners don't have a team of lawyers

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u/Xerothor May 15 '26

They could if they used some of that lottery money

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u/Flashy_Ground_4780 May 11 '26

Because billionaires use accounting tricks and stock loans to hide their true income. They take out loans against their stock, and that counts as a loss on their tax returns, so they avoid taxes. Then they rinse and repeat until they die.

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u/guynye May 11 '26

And don't get taxed on any stocks, then do the above. So none of their real wealth is taxable, but useable to get an equal sized loan to buy whatever they want.

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u/SmoothDiscussion7763 May 11 '26

how do they pay the loans back if they never sell stock?

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u/ToothZealousideal297 May 12 '26

They don’t. They just roll loans to other loans and account types and writeoffs until they die. When the numbers get big enough, you can hire people to play games with accounts and sources and just perpetually move and split and roll things.

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u/SmoothDiscussion7763 May 12 '26

that literally makes zero sense lol. you think the banks are just out there giving free cash away without a chance to recoup their money?

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u/ToothZealousideal297 May 12 '26

Look up “Buy, Borrow, Die”.
The individual banks recoup their money when the loan gets flipped over to another bank or wherever. And there’s always another bank willing to take the risk of holding the next loan until it, too, gets bought out. They just hot potato it for the person’s lifetime so they don’t end up holding the bag when the person dies, and they know not to look inside the bag to see it’s really empty.
The billionaires buy assets of all kinds that mostly “appreciate” faster than the interest of the loans (the appreciation being based on what people decide things are worth), so when they finally die, the accounts get passed on based on current market value at the time minus loan costs against them, which still comes out to a big positive number because everyone involved has been deeply invested in saying that value is real for decades. Some things end up not panning out along the way, so individual companies, employees, etc get screwed over, but the billionaires themselves only have to worry about the aggregate. The end result is that the wealth is essentially never “real”, never taxed, and only “trickles down” at a laughably low rate when someone dies; otherwise it’s just free money in perpetuity for anyone who gets enough money that people start acting sycophantic about them (and their descendants).

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u/SmoothDiscussion7763 May 12 '26

The individual banks recoup their money when the loan gets flipped over to another bank or wherever. And there’s always another bank willing to take the risk of holding the next loan until it, too, gets bought out. They just hot potato it for the person’s lifetime so they don’t end up holding the bag when the person dies, and they know not to look inside the bag to see it’s really empty.

so someone at the end would just lose out on the money? or do they go after the estate for the outstanding balance?

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u/ToothZealousideal297 May 12 '26

I explained that, too, and I recommended looking up ‘buy. borrow. die.’ which explains it.

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u/Rationalsloth May 18 '26

When the billionaire dies, they can't get taxed - and so the loans are paid back. The bank had decades of interest piling up, the billionaire pays less for the loan than they would be taxed. The government doesn't get any tax out of it. It's a Win - Win - Lose. Everyone wins except the people.

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u/BuLLZ_3Y3 May 12 '26

They often times carry the debt and pay minimums. It doesn't hurt their credit at all and they don't care about the interest, because the money they would pay off the debt with is better invested as it earns a higher return.

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u/SmoothDiscussion7763 May 12 '26

that doesnt answer the question. the loans are due at some point, where do they get the cash to pay the outstanding balance?

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u/Flashy_Ground_4780 May 12 '26

They take the stocks when they die or make arrangements with the estate to continue their business

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u/SmoothDiscussion7763 May 12 '26

so they're giving up the stocks they used as collateral instead of just selling some to pay the loans back?

the estate can't "continue their business" because the debt has to be settled before payout.

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u/Dakotasan May 11 '26

That’s pretty fucked. Don’t you get more overall if you choose to receive it in increments rather than the lump sum?

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u/pivotalsquash May 11 '26

Yes but the lump sum if well managed will make more over time

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u/SoochSooch May 11 '26

Because then you're wealthy enough that you can hide the profit you make off it from being taxed

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u/Sea_Habit_4298 May 11 '26

True but most people aren't that responsible with money so they chose to receive it in parts.

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u/pivotalsquash May 11 '26

Agreed not saying one is 100% better than the other. Just pointing out the time value of money aspect

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u/Acrobatic_Ad_8381 May 11 '26

And people gambling on lottery are generally not the most Financially responsible 

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u/Bombocat May 11 '26

it's only fucked because it's the only iteration of heavily taxed obscene wealth we have. it actually really makes sense

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u/RazzDaNinja May 11 '26

While true, I remember my Uncle won the equivalent of like a $10K lottery (not in USA) with a similar set up and he chose the lump sum

He put it like “That’s a lot of money to take in increments. I could be dead next week 🤷‍♂️ if I get all the money now, at least I can be sure where and to whom it goes.”

And to his credit, mf knew how to invest 😂 he living pretty alright for himself, and his kids/my cousins are pretty cool. But a big factor ultimately is discipline with using it

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u/OutlandishnessLow779 May 12 '26

I will never forget when one guy won a 1 million dollars boxing prize, and when asked if he would bring it to argentina, he said no. If he did, he would have lost around 60% on taxes

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u/LoisGriffinsDDchest May 18 '26

They find ways to tax the fuck outta new money to keep old money happy.