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Ultra-wealthy individuals legally minimise their tax liability by: Receiving a relatively low official salary (Bezos's Amazon salary was $81,840 for many years

• thethimble 10mo ago
  Borrowing against illiquid assets should be considered a taxable event. Seems like this would entirely fix the loophole.
  • ch4s3 10mo ago
    So every small business loan should be a taxable event?
  • dzhiurgis 10mo ago
    You pay taxes when you are paying off your loan...
    • tenuousemphasis 10mo ago
      Really? What taxes?
      • Windchaser 10mo ago
        Rather, you pay taxes on the income you use to repay the loan. Plus you pay the interest on the loan. This basically defers the taxes to a later date and charges you interest for 'em. Which might be worthwhile, depending on how quickly and reliably your capital is growing.
    • xjm 10mo ago
      Only if you pay it off with taxable income. If you have a lot of assets you can just refinance your loan with more debt.
      • dzhiurgis 10mo ago
        This makes no sense. How is lender going to make money?
        • AngryData 10mo ago
          They still charge interest but at a rate lower than the tax rate of earning it as income.
• MagicMoonlight 10mo ago
  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.
  • ugh123 10mo ago
    > If you don’t receive income then it obviously shouldn’t be taxed Right, but you're ignoring the loop-hole OP mentioned where you borrow un-taxed money then deduct it. Kill the loop holes.
    • YetAnotherNick 10mo ago
      There is no tax loophole. The only thing they are getting is higher leverage against borrowing, and the only difference would occur if that individual would go bankrupt in that the entity that they borrowed from wouldn't need to pay income tax. So the only way to pay less tax is to surrender all your assets.
      • yibg 10mo ago
        Or die and pass it to your children. Buy, borrow, die. Kill the step up basis loophole.
        • YetAnotherNick 10mo ago
          No it doesn't work that way. If you pass on the stock options, you pass on the tax burden.
          • ancillary 10mo ago
            I'm not sure if "options" is the relevant word in your post, but it does seem like capital gains tax is significantly reduced in inheritances? Here's an example source that says the cost basis gets reset to its value at approximately the deceased's death [1], and gains relative to that cost basis are likely much smaller (and thus a much smaller tax burden) than those relative to their initial acquisition price possibly decades earlier, no? [1] https://www.fidelity.com/learning-center/life-events/cost-basis-for-inherited-stock https://www.fidelity.com/learning-center/life-events/cost-ba...
• Tangurena2 10mo ago
  > 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.
• Windchaser 10mo ago
  > Ultra-wealthy individuals legally minimise their tax liability by ... - And: lobbying their congressmen for tax cuts
• Hugsun 10mo ago
  I heard from a medium reliable source that this loophole wasn't as popular as the zeitgeist implies. I'd love to know how true that is and if so, how the rich finance themselves.
  • whattheheckheck 10mo ago
    I heard 3 people have more wealth than the bottom 50% globally. Wtf is the point
    • cindyllm 10mo ago
      [dead]