The multi-millionaires and billionaires of today are the modern day aristocracy in the truest sense of the word. Just like in the days of old, wealth, power, class and status is mostly inherited, and the rich stay rich with this strategy that literally ends at death, you know, when it's time for the next generation to take over...
source: YouTube
In June this year ProPublica released an article based on leaked IRS documents which gave an insight into the techniques by which billionaires accumulated massive wealth while paying lower rates than middle-income people, or no tax, or in some cases even getting paid refundable childcare tax credits. The first paragraph of this article reads as follows:
In 2007, Jeff Bezos, then a multibillionaire and now the world’s richest man, did not pay a penny in federal income taxes. He achieved the feat again in 2011. In 2018, Tesla founder Elon Musk, the second-richest person in the world, also paid no federal income taxes.
source: ProPublica
I don't know if Bezos is still the world's richest person or if Musk now holds that position and frankly I'm too tired to look it up; these two have switched position before and will likely do so again. What's important here is that both men use the "Buy, Borrow, Die" strategy, among others, to avoid paying taxes. You'll notice that Musk claims in the below linked video that he, as a billionaire, pays a marginal tax rate of 53 percent, which is a blatant bold-faced lie. No matter how hip he thinks he is, or how brilliant his fan-base thinks he is, he's just like all the other insanely rich parasites, and doesn't feel obligated to pay back to the society that made him rich in the first place. That's what taxes are; it's the price we pay for the maintenance of a functioning society, an admission to the fact that we're part of something that's bigger than ourselves. But folks like Musk and Bezos find it hard to believe that there's anything on this planet that's bigger than them. Maybe that's why they're so eager to leave this planet...
Elon Musk Brazenly Lies About His Taxes | The Kyle Kulinski Show
So, how do they legally avoid paying taxes? How do the laws,rules and regulations benefit their class? Well, first thing to do is to make sure to have as little income as possible. You see, income tax can be as high as 37 percent, so there's there's much money to be saved if you don't pay yourself an income. Instead just accept stock, which is taxed at the 20 percent capital gains tax. If you have children, you avoid much of the estate tax by moving money into charitable foundations or trusts before you die. All income can be offset with losses (on paper of course), or with charitable contributions. And income from dividend can be offset with interest paid on loans...
Which neatly brings us to the buying, borrowing and dying. We've seen that rich folk don't want income and they can use interest paid on loans to offset any income they do have. What better strategy then to borrow the money you need to support your extravagant lifestyle? The first step is to own stuff that has a good chance to appreciate in value, like stock or, even better, real estate. So you buy capital assets and, this is very important, you never sell any of it. That's because if you sell, you will be taxed through the capital gain tax. Once you own a lot of that, you borrow your spending money, using the capital assets as collateral, at interest rates that don't even come close to tax rates; interest rates on these loans can be as low as 2 or 3 percent. And by holding these capital assets, these geese that lay your golden eggs, until death, your children inherit them, paying next to no taxes, relatively speaking, because a "step-up in basis" zeroes out the accumulated gains and allows heirs to not pay any capital gains tax. And so the next generation of the modern-day aristocracy is born...
Buy, Borrow, Die: How America's Ultrawealthy Stay That Way
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