If someone one owns a billion dollars of stock foobar, and foobar grows 10x, then that person is now worth 10B and "made" 9B. However they have not sold anything so while they can be reported as making 9B, they are none of it was directly cash and not taxed; at least not yet.
However, while Bezos "only" has a salary/bonus of 1.5 million a year, it is very common for executives to have total comp packages in the 10s to hundreds of millions a year. These can easily be converted into hourly rate equivalents because there is only so many hours you can work a year.
They can cycle debt to avoid ever having to sell a single share for their entire life, at rates more favorable than any middle class person has access to.
We can fix our tax code with legislation to address this loophole, our politicians just don't have the will to do this currently (largely because many of them amass fortunes through stocks and insider tips, IMO).
The historical critiques of class warfare have some good points, because there's obviously a privileged class here that's doing really well on the backs of labor, and this privileged class can afford to buy (and let's face it, it's really bribe) itself ever more privileges for a very tiny share of their wealth.
A wealth tax could address this, but perhaps there are other legislative options, like (partial?) realization of capital gains when used as loan collateral in the income tax code, or something like that. I'd prefer that latter, as it seems more direct.
But I don't know the specific best way to address this, I'm no a tax expert. But, I think its pretty clear that this scheme is an abuse of the system and should be remedied in some way.
In fact, unless you have a cash-only account, you likely use margin every time you buy & sell a stock. Technically, stock transactions don't settle for 2-3 days. When your brokerage fronts you the shares to immediately buy, sell, or transfer funds, it's all margin under the hood. It gets even more complex once you get into options, swaps, and other esoteric financial instruments.
TLDR: It's simple in principle, but very complex in practice. Further complicating IRS rules is unlikely to win the whack-a-mole competition -- especially when IRS auditors under-target the ultra wealthy to begin with.
Of course, if that value drops you’ll get margin called for more collateral
Unaccredited investors (us, commoners) have access to margin loans for up to 50% value of account.
Accredited investors have access to portfolio margin which can be up to 90% of mark to market value.
That’s nothing to say of any custom financial instruments that banks might come up with to save bezos any taxes. Think swaps.
If the definition of "rich" is "independently wealthy," that family certainly doesn't meet it. They still have to work for a living.
If it means you never have to worry about where the next meal is coming from or losing the roof over your head, sure, a lot of people are "rich." And maybe this is better than 90% of humanity does, but it's still not a reasonable first world standard for being "rich" IMHO.
No they don't. They could live in a median dwelling with a median income indefinitely on the interest of what they've saved over the past few years.
If you're saying that they have to work for the living that they're accustomed to, so does Musk.
He answered: 'No, you are often winning, but when you lose you lose way too high.'
(-;
That's why the concentration of wealth into a very few hands at the top marches on, not because of "wages".