• Manticore@lemmy.nz
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    2 days ago

    Billionaires technically don’t have much personal wealth. They leverage their illiquid assets as collateral to take out massive loans. Which they can later cover with taking out even bigger loans.

    The liquid wealth of the wealthy is very low, technically in debt. This is another way they can avoid paying tax as they technically don’t have much of anything, and the reason why ‘declining to take a salary’ is typically meaningless.

    • aesthelete@lemmy.world
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      2 days ago

      Buy borrow die

      It does have a notable Achilles heel though, which is that the underlying portfolio has to keep appreciating in value.

      • Manticore@lemmy.nz
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        1 day ago

        Well if it doesn’t, sell your stock to yourself a la Elon Musk, who sold X at a loss to XAI (a company he also majority owns). The ‘loss’ of ~6bil in value (iirc) means he can now gain ~6bil from any other sources without paying gains tax.