The average citizen can't borrow to pay off debts indefinitely.
At ~2% interest the billionaire can borrow against their assets and keep borrowing to pay off interest. The assets gain in value at 4-6% per year so they are actually coming out ahead and paying 0% tax.
Even a middle class retiree typically needs to draw down their savings to pay expenses. Giving up 2% to avoid taxes wouldn't be viable. The bank would also observe that there is a higher risk that the retiree goes bust than a billionaire and not lend enough money for the scheme to be worthwhile.
or even at all! large amount of Americans don't even have access to banking.
The loans they can get are insanely (i think disgustingly) predatory.
payday loans with fees can ed up being like 664% APR!!!!! Your 500 loan becomes 2000 you have to pay back in a couple months, which you obviously can't..
Right it's crucially important we leapfrog all this crypto and fintech nonsense by just doing "fed accounts for all" administered electronically and at the post office.
Boring commercial banking should be utility, and any private sector offering will have to compete with a new non-grifter baseline.
And 2% is really high. Billionaires are likely getting less than 1% interest rates. Big banks are willing to lose money even, just to court these billionaires.
At ~2% interest the billionaire can borrow against their assets and keep borrowing to pay off interest. The assets gain in value at 4-6% per year so they are actually coming out ahead and paying 0% tax.
Even a middle class retiree typically needs to draw down their savings to pay expenses. Giving up 2% to avoid taxes wouldn't be viable. The bank would also observe that there is a higher risk that the retiree goes bust than a billionaire and not lend enough money for the scheme to be worthwhile.