Billionaires with $1 salaries – and other legal tax dodges the ultrawealthy use to keep their riches
theconversation.com
The richest Americans can largely avoid paying income and other taxes. A new book explains the history.
  • SpaceNoodle@lemmy.world
    213·
    2 days ago

    So any shareholders who do not need to sell can make a profit from their stock going up in value and do not need to pay taxes on this profit.

    Uh, they do when they sell it, bucko

    • e461h@sh.itjust.worksOP
      272·
      2 days ago

      They don’t sell, they take loans instead:

      At some point, one might expect that the ultrawealthy would have to sell their shares to finance their lifestyle. Do they? In selling those shares, wouldn’t they have to pay a capital gains tax?

      For most of us, when we own property or stock that has increased in value, it doesn’t mean anything to us unless we sell it. But those with great wealth can access that wealth without paying taxes by simply borrowing against their assets. And that is what our richest Americans do.

      Billionaires like Larry Ellison and Elon Musk borrow huge sums of money to support their lifestyle, pledging their stock as collateral. This borrowing is entirely tax-free and comes at good rates. In addition, in recent years the growth in stock value more than compensatesfor any interest that might accrue. To pay the interest and pay back the loans, they simply borrow again.