‘I Think People Can Make It On $999 Million,’ Bernie Sanders Blasts America’s Billionaires. Here Is How The Ultra-Rich Can Pay Less Income Tax Than You — Legally

It’s no secret that U.S. Sen. Bernie Sanders is not a fan of America’s billionaires.

When CNN host Chris Wallace asked him whether he believed the government should “confiscate all the rest” once a person makes over $999 million, the senator’s answer was affirmative.

“Fine, yes, I think people can make it on $999 million,” he said. “I think that they can survive just fine.”

Sanders emphasized that his view that billionaires shouldn’t exist does not constitute a personal attack on any specific billionaire.

“It is an attack upon a system,” he said. “Do I think people who work hard, create new businesses should become rich? I do. Do I think they should have $50 billion or $100 billion when you have got a half a million people who are homeless in America today when you have 85 million people who can’t afford health insurance? No, I don’t.”

Sanders argued that America should go back to “a very progressive tax policy like what we had under Dwight D. Eisenhower.”

To be sure, the fairness of the U.S. tax system and whether the rich are paying their fair share has long been debated.

Check out: ‘People-First’ Real Estate Fund Shares Rent With Tenants While Generating Strong Returns For Investors

How Some Billionaires Pay Less Income Tax Than You

According to a report from ProPublica, some billionaires in the U.S. paid little or no income tax relative to the vast amount of wealth they have accumulated over the years.

The report noted that Amazon.com Inc. Founder Jeff Bezos “did not pay a penny in federal income taxes” in 2007 and 2011. It also pointed out that Tesla Inc. CEO Elon Musk paid no federal income tax in 2018 and investing legend George Soros did the same “three years in a row.”

The reality is that billionaires build their wealth largely from assets. Their net worth goes up when these assets increase in value over time. But the U.S. tax system is not designed to capture the gains from assets: Capital gains are typically taxed at lower rates than wages and salaries.

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The good news? You don’t need to be in the three-comma club to invest in these assets.

Getting A Piece Of The Action

For many well-known billionaires, the bulk of their wealth is tied to the companies they helped create.

If these companies are publicly traded, retail investors can hop on the bandwagon by purchasing shares. For those who want to follow Bezos, check out Amazon. If you want to bet on Musk, look into Tesla.

Here’s the neat part: When stocks go up in value, investors only pay tax on realized gains. In other words, if investors don’t sell anything, they don’t have to pay capital gains tax — even if their stock holdings have skyrocketed in value — because the gains are not realized.

According to ProPublica, that’s why some billionaires choose to borrow against their assets instead of selling them. Doing so gives the ultra-wealthy money to spend while deferring taxes on capital gains indefinitely.

That said, when they do sell their shares, they can still get hit with a substantial tax bill. After Musk sold a ton of Tesla shares in 2021, he tweeted that he would pay over $11 billion in taxes that year.

Another popular option for billionaires is real estate, which comes with plenty of tax advantages as well.

When you earn rental income from an investment property, you can claim deductions. These include expenses such as mortgage interest, property taxes, property insurance and ongoing maintenance and repairs.

There’s also depreciation, which refers to the incremental loss of a property’s value as a result of wear and tear. Real estate investors can claim depreciation for many years and accumulate significant tax savings over time.

The best part? The segment is becoming increasingly accessible to retail investors. There are publicly traded real estate investment trusts (REITs) that own income-producing properties and pay dividends to shareholders. And if you don’t like the stock market’s volatility, there are also crowdfunding platforms that allow retail investors to invest directly in real estate with as little as $100 through the private market.

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This article ‘I Think People Can Make It On $999 Million,’ Bernie Sanders Blasts America’s Billionaires. Here Is How The Ultra-Rich Can Pay Less Income Tax Than You — Legally originally appeared on Benzinga.com

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