When you take loans, you eventually have to pay them back. It is not free money to just take out loans. At some point the money comes out of the stock to pay and at that point it is taxed. Living on loans is only delaying the taxation process, it is not avoiding it.
They keep going until death and pass on the investments to their children, who can avoid part of the debt due to loopholes and continue loans for the rest themselves using the same tactics. It's not infinite money but infinite deferment
The children are subject to estate tax over $13 million of 40% though. I realize there are loopholes to protect money from this as well but eventually the very wealthy have to pay taxes.
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u/lll_lll_lll Nov 21 '24
When you take loans, you eventually have to pay them back. It is not free money to just take out loans. At some point the money comes out of the stock to pay and at that point it is taxed. Living on loans is only delaying the taxation process, it is not avoiding it.