I just got done looking at someone’s tax returns and for several years they reported millions in “negative” income… how is this possible when this person is a billionair.
In: 4
Someone that rich with competent accountants will probably be able to re-order all their affairs so that they didn’t, legally speaking, make any *money*. They have more wealth than they did at the start of the tax period, probably, unless they are bright orange and lie to their tailor, but legally speaking it was all given to them by other people or accrued by the natural action of the market. Actual growth of wealth among these people is largely in capital gains, which are only taxed when realised: so they are released by taking loans against an assessed value that nobody intends to actually genuinely turn into actual money. Because that would create a huge tax liability nobody wants.
Why is this legal?
Basically because the political system hugely advantages politicians who have mega-rich friends, so politicians spend a lot of time and effort making it legal.
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