alt Hacker NewsUltra-wealthy individuals legally minimise their tax liability by:
Receiving a relatively low official salary (Bezos's Amazon salary was $81,840 for many years).
Not receiving dividends, so the wealth remains in stock that is not taxed annually.
Borrowing money against their stock holdings to fund their lifestyle. Loans are not considered income and are therefore not taxable, and the interest on the loans can sometimes be used as a deduction.
Replies
> Borrowing money against their stock holdings to fund their lifestyle. Loans are not considered income and are therefore not taxable, and the interest on the loans can sometimes be used as a deduction.
A loan should definitely be a taxable event and capital gains taxes should apply to rebase the value of the stock to the market value at the time the loan is taken out. Currently, very wealthy people use the loan dodge to avoid selling stocks and since the loan isn't paid off until death (usually), estate taxes wave their hands and any gains in the stock price go away, so that the next nepo generation gets to repeat the same dodge.
Borrowing against illiquid assets should be considered a taxable event. Seems like this would entirely fix the loophole.
If you don’t receive income then it obviously shouldn’t be taxed. Otherwise you’d be taxed on owning a car or a house, despite not selling it.
> Ultra-wealthy individuals legally minimise their tax liability by ...
- And: lobbying their congressmen for tax cuts