Hedge funds don't spend money... at the end of the day, a human being who wants to reap the benefits of this investment will need to realize gains and pay tax.

Hedge funds don't spend money... at the end of the day, a human being who wants to reap the benefits of this investment will need to realize gains and pay tax. Or they could commit to just staring at imaginary numbers in a bank account forever I guess, but then you start to ask existential questions about what inequality actually means if nobody ever spends money. And yes, 401ks are tax-advantaged... that's the point of the account. It would be equivalently tax-advantaged if companies were paying dividends instead of running buybacks.