[feelandcoffee]

This is the case of "Buy, Borrow, Die" or "kick the can". The top 0.01% paying a lower percentage of taxes than even the lower tax bracket worker class.

If you are a wharever-ionaire you could put your gains in index S&P 500 shares, then use them as collateral, paying everything you need with credit and having a $1 annual salary. So technically, that $1 it's their only income to the IRS. But what about interest? with that collateral, you have a special rate close to (or even lower than) inflation. Then you die, the bank takes your shares to pay your debt, and that's it.

https://www.wsj.com/articles/buy-borrow-die-how-rich-america...

[GDC7]

but that isn't very smart strategy because it prevents you from spending every dollar that you have ever earned.

At some point you want to open the floodgates so you don't leave any quality of life on the table.

You can't do that on margin loans, whereas you can if you are able to engineer a tax efficient way to cashout without paying capital gain tax

[nikitaga]

Nobody who uses this strategy will come even close to spending every dollar that they earned, they spend all they want yet still end up leaving all their wealth to their kids when they die.

[AmericanChopper]

You missed a couple of steps.

> Then you die

> The bank takes your shares to pay your debt

> The IRS taxes this against your estate as income

> The entire value of your estate is taxed for any capital gains at the “fair market value” of all your assets at the time of your death

> and then that's it.

[rapind]

And of course it's more nuanced than that, with stuff like accelerated depreciation, preferential tax rates on investment income, charitable lead annuity trusts, etc. ad infinitum.

[naasking]

No, they give their wealth to their family as gifts, and they have no capital gains because they were living like a royalty off of loans leveraged against their assets and so their effective gains are zero, among other tricks. It's easy for the rich to avoid taxes.

[Aerroon]

Doesn't this mean that it all still gets taxed, but if nothing goes wrong, then it's paid after you die?

[Spooky23]

That’s what the talk radio shills and similar right wing folks tell you.

The reality is that when you have enough cash to justify, you roll your assets into a series of South Dakota trusts and that money is perpetually tax-free.

Another tactic is to use Nevada and Delaware corporations to buy real property everywhere, and use that to avoid most taxation.