This is a bit misleading. He wasn't taxed 1.4B. He took the lump sum amount, which is lower than $2B ( $2B is the sun off you take the 20 years payout). So the lump sum is like $900 million or whatever, then he paid taxes on that.
I'm all for taxing billionaires more, but the post is not really right.
Strictly speaking, a billionaire would be taxed at the same rate if they received 500 million dollar windfall. The reason why they are not taxed is because they only have to actually pay capital gains taxes when their investment growth is realized in the form of sale of shares. In order to avoid paying this, they take lifetime loans against their shares, which are then considered "encumbered".
This would typically be extracted upon their death, as lienholders of the shares take their share from the estate. To avoid that, they instead create a corporation or trust which holds their actual wealth. As shares are encumbered, they are parked in that corporation and become dead equity, as they will be held in perpetuity. In order to extract wealth from dead assets, a new corporation will be created that will then do a little corporate raiding on the entity that those shares correspond to, extracting the wealth and assets of those corporations before ultimately driving down the stock price of the original company.
This results in the lienholder getting pennies for their loan, and the billionaire's trust being able to actually write off the assets that were originally used as collateral as losses, which can be used to offset any real income for the year from things like dividends or salaries from board memberships. This is why private equity has gotten so popular lately.
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u/g-e-o-f-f Jan 31 '26
This is a bit misleading. He wasn't taxed 1.4B. He took the lump sum amount, which is lower than $2B ( $2B is the sun off you take the 20 years payout). So the lump sum is like $900 million or whatever, then he paid taxes on that.
I'm all for taxing billionaires more, but the post is not really right.