I previously mentioned using donations to shelter income. His house offers some additional opportunities.
I think that a huge fraction of the cost went to cool custom gadgets. If Gates set up a company to research/develop those gadgets, he can deduct the "losses" when said company doesn't manage to sell them. Yes, he should pay for the gadgets themselves, but they're cheap compared to the NRE.
There are some ways to do tax-free roll-over to fund companies, so the deductions would shelter other income.
Even if Gates had to pay cap gains to fund the company that developed the gadgets, he's way ahead if the deductions are at ordinary income rates. If he both pays and deducts at cap gains rates, he's just out cap gains on the gadgets themselves.
However, like I said, I don't know how much tax planning Gates does. He has over $60B, so avoiding cap gains on $40M is like someone with $2M avoiding cap gains on a cheap used car. Then again, he may have set up a system 20 years ago to pull out money tax-free every year. Putting $40M through it may be just SOP.
My point was, however poorly made with the Gates example, that I doubt that the thought, other loopholes aside, is to eliminate capital gains tax for people that are deemed to be "rich".
Regardless, I am all for any tax incentive that provides incentives for anyone to start or invest in a startup.
I think that it's silly to consider "the thought". We should look at where we actually are and what is likely to actually happen if we make proposed changes.
Part of "where we actually are" is that the very rich don't pay estate taxes and can work around cap gains taxes, so evaluating cap gains proposals based on their effects on the very rich is silly.
Instead, we should look at people who are actually paying cap gains (and estate taxes for that matter).
The key word there is "estates"; "legal estates" would be more accurate.
Gates et al move their accumulated wealth out of their legal estates into tax-free foundations and the like. So, while their legal estates may be taxed, there is almost nothing there to tax.
No, they didn't sell their stock to fund these foundations - they donated stock, which is either tax free or provides a tax benefit. Yes, those foundations serve many of the purposes of "estates". (The Gates kids and their kids and so on will always have an income.)
There are other things that they can do to shift money to their kids and grand-kids without significant tax consequences. (Yes, there's a $10k limit on some transactions, but ....)
There are things that these folk can do while they're alive to generate tax benefits that they can then use to make other sales tax free, giving them something to live on. (I don't know the legal status of the Google planes, but the planes that are available to NASA could easily generate tax benefits.)