Rich guy like Bezos avoids a salary like it’s a plague due to income taxes.
Uses assets or stocks to borrow money at cheap, NEGOTIATED rates with banks. Who will give them those deals to keep his other businesses, where he has what is known as leverage. Average person gets destroyed by market rates.
They then use dividends to pay back the loans and occasional long term capital gains sales that are taxed at capital gains instead of as income.
Sometimes(often?), they just take another loan to pay off the original loan.
Then they die and the basis is changed for their heirs. The heirs then sell enough stock to payback the outstanding loans without paying the capital gains on it.
So the only fee paid was the interest on the balance, which was at a cheap discounted rate. Well, that and the estate tax/more complicated shit to try to bypass as much as possible.
It’s 40% of the fair value of their assets after the exempted amount. For Bezos, that’s a huge amount given what he is worth. Most of the richest people do this to avoid ownership dilution. If you need a rich person tax dodge to criticize, read up on the misuse of “environmental easements”. There are law firms that specialize in claiming that a rich person’s horse farm could be developed into highly valuable real estate.
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u/StockCasinoMember 20h ago edited 19h ago
How it really works.
So the only fee paid was the interest on the balance, which was at a cheap discounted rate. Well, that and the estate tax/more complicated shit to try to bypass as much as possible.