Wealth gap

The wealth and income gap in the US has been widening since 1980. The wealthy live off of capital while the non-wealthy live off wages. The stock market grows at 10% per year while wages increase less than 3%. The wealthy also use tax strategies that are not available to others. Amazon started in 1994 and reinvested all funds in the company for ten years before it showed a profit. Bezos started with an interest free loan from his family and went public in 1997 for $18 per share. A $1,000 investment on that day would be worth $1.8 million today. Amazon to this day pours revenue back into expanding its business and thus avoids taxes. Amazon compensates many employees with stock units and requires the employees to hold the stock and when it is sold, they get a deduction of the appreciated amount. Amazon uses R&D tax credits to reduced taxes dollar for dollar. Amazon uses accelerated depreciation to rapidly deduct the cost of capital investments. These represent tax advantages that are not available to people who work for wages. Bezos owns 925 million shares of Amazon valued at $215 billion. He uses these assets as collateral for low interest loans to start new businesses like Blue Origin. If Bezos holds onto his stock until he dies there will be no capital gains tax and if he puts the assets into a Dynasty Trust there is no estate tax so the entire amount passes tax free to his heirs. He is 62 years old and if he lives another 20 years his estate will be worth $1.45 trillion and this is why the wealth gap keeps getting wider.