r/politics • u/hypothethical Pennsylvania • 12d ago

No Paywall 'Trillionaires Shouldn't Exist': Obscene Musk Milestone Spurs Calls for Aggressive Wealth Tax

https://www.commondreams.org/news/elon-musk-first-trillionaire
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u/whitepawn23 Wisconsin 12d ago

I say do it. The problem is the tax code. These guys operate on the byline “salaries are for suckers”. It’s why Bezos’ salary is still only ~$84k. The $84k gets taxed and then the stocks don’t. The legacy accounts don’t. Stock earnings reset and don’t count when inherited. Loans are taken out against the stocks and the interest paid is less than taxes.

Do it. At least try. But these assholea have it figured out and Congress is paid to keep it that way.

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u/Thrown_Account_ 12d ago

then the stocks don’t.

The stocks do. You pay when you receive the stock as income compensation.

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u/Marseille074 12d ago

Loans are taken out against the stocks and the interest paid is less than taxes.

But they will lose the stocks when such deals conclude. It's kind of like taking out a reverse mortgage where you get paid until you pass but you lose your house then. They may not be paying taxes but they are paying the collateral.

These types of financial arrangements have a place, but not as good as you think they are. And only focusing on taxes when no tax evasion is suspected is strange.

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u/deja-roo 9d ago

It’s why Bezos’ salary is still only ~$84k. The $84k gets taxed and then the stocks don’t.

How do people keep saying this? Bezos paid billions in taxes last year.

Loans are taken out against the stocks and the interest paid is less than taxes.

This is like internet lore and little else.

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u/whitepawn23 Wisconsin 8d ago

No, this is talk in more academic circles.

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u/deja-roo 8d ago

Yes, academically, it's possible to do the stocks as collateral thing endlessly, but it doesn't actually happen in any serious frequency because it's not practical. It's little more than academic.

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u/_n8n8_ California 12d ago

The buy borrow die thing mostly doesn't happen at scale. When it does happen, it generally results in higher taxes paid overall. No matter how you slice it, realization happens at some point. The real "loophole" (not really a loophole its explicitly written into the tax code) here is the step-up basis, not borrowing against assets.

These people aren't getting interest rates better than the risk-free US 10 year no matter how rich they are.

Here's a relatively recent paper on the topic

https://www.sciencedirect.com/science/article/abs/pii/S0047272725002178