Transcription
Jeff Bezos just moved to Florida to spend more time with dad. Isn't that sweet, Stephen? Isn't that nice? No, it has nothing to do with his father. Give me a [ __ ] break.
He aggregated $160 billion in wealth. He would pay about another 8 or 10% in state taxes in Washington, but in the US you're allowed to peace out to Texas or Florida and pay no [music] income tax. The 25 wealthiest Americans pay between 6 and 8% tax rate.
>> [music] >> What are the tax games they play? You buy stocks, you never sell them, you borrow against them. Okay, explain that to me like I'm a 10-year-old.
>> Sure. You own $100 in Amazon stock. Yeah. You need money to buy something instead of selling the stock and let's say it's gone up 50%. Let's say it's doubled. You would have to realize a capital gain and pay long-term capital gains on that $50 gain. No, just borrow against it and let the stock continue to grow.
What rich people do is they'll buy a stock. So, [music] I'll I'll spend 10K on Amazon stock and then I go to a bank and the bank give me a $5,000 loan against my Amazon stock [music] tax-free. Right. And I just hold the Amazon stock. Now I've got 5,000 tax-free. If the Amazon stock goes to $20,000 in value, then I can go to the bank and say it's gone up now, give me another $5,000 and I just spend and live off that money. Now, if the Amazon stock collapses, I'm fine because the loan was against the stock. So, they'll sell the stock at a certain point as it's collapsing to get their money back.
>> One of the great [music] tax schemes in history is that stocks grow. Think of yourself as a stock. You're making a million dollars a year doing a very successful podcast. Every year the government in the UK is going to take 40% of it. If you own a million dollars in stock and it goes to two million, >> [music] >> you don't get taxed on it till you sell it. Yeah, so you just never sell it.
>> Never sell it. And that's what Elon's doing with his companies. People say he's got, you know, $200 billion whatever. In fact, he's borrowing tax-free against those companies.
>> when he finally needs to sell it to pay off some of those loans, he moves to Texas despite the fact he built all his wealth in California.