taxes '25
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(It’s that vernal, infernal, tax season. How about a tax avoidance vignette? It’s poetic—in it’s own way)
Some students at a table near us in the dining hall were discussing America’s financial inequities. One guy was saying that we ought to “tax the crap” out of billionaires and their billions—and there was agreement all around—the consensus was downright mob-like.
I had to chuckle though, because these guys have no idea how wealth is managed in the world today. I bet, for instance, they think Musk has 200 billion dollars in his basement somewhere, but no, Musk’s 200 billion is his ‘net worth,’ the theoretical value of his stock portfolio (or his unrealized assets).
Just between us chickens, I’m related to a few ‘filthy rich’ people, (no, NOT my parents) and I’ve met many others and I can assure you, dear reader, that the ‘filthy rich’ have nothing you can tax. Now, I’m not a finance major. Everything I know, I learned from my Grandmère and my parents who thought a girl ought to know about money. So anyway, just for fun, here’s a quick (I’m condensing and simplifying), lesson on how taxation and wealth work in 2025.
The wealth of the rich lies in their assets—the value of companies they own or stocks they’ve invested in. Those “paper assets” can only be taxed when they’re sold—or, in tax terms, when their intrinsic value is “realized.”
Now instead of selling off (taxable) assets to live, the superrich use those assets as collateral for “securities backed loans” which are nontaxable. Elon Musk, for instance, takes no salary. He uses his ($94 billion) Tesla stock as collateral for loans he uses to fund his lavish lifestyle and provide ready cash as needed.
Mark Zuckerberg, Larry Ellison, Warren Buffett and Jeff Bezos—to name a few billionaires we all know of, take little or no salary—their compensation comes in the form of untaxible stock options they can leverage.
If you think this can’t go on forever, you’re wrong. Even when these billionaires die, the value of assets gained during their lifetimes are immune to taxation. At that point, some assets can be sold by heirs to pay off the outstanding loans, again, without worrying about taxes.
TA DAAAA. Now you know how the rich do it. How they avoid taxes in both life and death, and manage to leave massive fortunes to their heirs.
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Songs for this:
Done Changed My Way of Living by Taj Mahal
Run On by Elvis Presley
Copyright © Anais Vionet | Year Posted 2025
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