this post was submitted on 26 Oct 2024
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No, when someone like Musk sells their investments it's not taxed as regular income, it's taxed as "capital gains." The capital gains tax rate is lower than the income tax rate, and can be as low as 0%. Also, only the net profit (if there is any) is taxed. Unlike income, where it's all taxed and the lowest rate is 10%.
Someone like Musk can sell a billion USD of stock and not have to pay any tax on it by selling a mix of shares that lost money and made money.
If you sell stock that lost and made money in balance like that, then you're just liquidating your own money. There hasn't been any profit, so there's nothing that should be taxed.
True. But it's also part of a greater strategy to avoid paying taxes.
https://www.investopedia.com/terms/t/taxgainlossharvesting.asp