/biz/ - Business & Finance

Why are we not allowed to waive our rights to bankruptcy? If a person could give a small lifetime tax right (0.5% - 5%) on their annual earnings as collateral or even the sole means of payment for a loan, the cost of borrowing would be nothing for respectable citizens. This would be especially advantageous in the case of business, where individuals may want to borrow money but have no collateral to do so, or may not have the business revenue to qualify under current conditions.

The median annual lifetime earnings is $2,000,000 for those with college. For someone at or above that median income, it would be extremely profitable and reasonable for a bank to take a 3.5% lifetime tax-right (making $77,000) in exchange for a cash advance of $61,000 or $62,000.

This would actually serve as an optimal retirement vehicle. $61,000 put into an index fund is $928,416.39 after 40 years. It would essentially be a guaranteed retirement at 1/4th the lifetime cost of Social Security when you consider the current employee and employer contribution requirements.