Up to a certain level you are taxed on what you EARN. Income tax is relatively progressive.
Beyond a certain point you cease to be taxed on what you earn. Instead you are taxed on what you SPEND. By this I mean, you have unrealized or non-repatriated money and you only realize those gains and pay taxes on what you need to cover your expenditure.
So if you gain $100m in a year but only spend $10m then you're only taxed on $10m and the other $90m probably grows tax free until you really need it. This might mean then that you're effectively paying a 4% total tax rate (40% of 10% of your income).
But it gets worse. Because of zero interest rates, there's no point in paying tax on that 10% either. Instead you borrow $10m at 1.5% interest secured by your unrealized gains. If your unrealized gains grow at more than your interest rate you're coming out ahead. The worst case is you're deferring your taxes for years. The best case is you're effectively deferring them forever, or at least until interest rates increase to the point where realizing the gains is cheaper than borrowing.
Up to a certain level you are taxed on what you EARN. Income tax is relatively progressive.
Beyond a certain point you cease to be taxed on what you earn. Instead you are taxed on what you SPEND. By this I mean, you have unrealized or non-repatriated money and you only realize those gains and pay taxes on what you need to cover your expenditure.
So if you gain $100m in a year but only spend $10m then you're only taxed on $10m and the other $90m probably grows tax free until you really need it. This might mean then that you're effectively paying a 4% total tax rate (40% of 10% of your income).
But it gets worse. Because of zero interest rates, there's no point in paying tax on that 10% either. Instead you borrow $10m at 1.5% interest secured by your unrealized gains. If your unrealized gains grow at more than your interest rate you're coming out ahead. The worst case is you're deferring your taxes for years. The best case is you're effectively deferring them forever, or at least until interest rates increase to the point where realizing the gains is cheaper than borrowing.