RANT TIME!! Scroll on if you do not care about this issue.
So Pro-publica just issued a story that is completely bullshit (See below). Bullshit, Bullshit Bullshit. I call Bullshit.
Yet it has the patina of truthiness and so a lot of people will be pulled into it.
So rich people, just like everyone else, do not pay tax on the value of assets when they go up. That is the big secret they are revealing in this article. Shhhh its a secret! They figured out that rich people only pay tax when they realize income. Oooooh! Aaaaaahhh! That is so impressive.
So to illustrate, lets say you received $100 in wages in 2021. You had bought a stock for $50, and it is now worth $1000. How much tax do you pay if you pay 40% tax? $400, $440 or just $40. Yes just $40 because you have not sold your stock. You only pay tax when you sell your stock for a profit, which may not happen for years. That is the rule, and always has been.
You do not owe income tax on the value of your house when it goes up, you do not owe income tax on the value of your stocks when they go up, you do not owe income tax on the value of your business when it goes up. the only time your taxes go up when values go up is on real property i.e. municipal property taxes. Stocks are not real property. If you treat any other property like real property and impose a wealth tax, then the result is usually that rich people just leave. France tried it. It has not worked very well.
So the title of this article is clickbait, spin and not news.
Anyway, end of rant.
Article: The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the Wealthiest Avoid Income Tax