Even as U.S. billionaires sell more, their stock purchases are stagnant. Americans on the Bloomberg index bought $543 million of shares on the open market through Dec. 3, an increase from last year but less than half their purchases in 2018. The analysis doesn’t take into account other ways billionaires acquire shares, such as stock grants or option awards that are part of compensation packages.
Personal Reasons
The richest Americans could have a variety of personal reasons for selling now, including funding charitable endeavors.
Jeff Bezos, the world’s second-richest person, has sold more than $9 billion in Amazon.com Inc. this year, money that he could use to deliver on recent grants and pledges to fight climate change through his Bezos Earth Fund.
Zuckerberg is liquidating more Meta stock -- formerly known as Facebook -- than he has in years, largely to send to his Chan-Zuckerberg Initiative. He’s sold $4.5 billion this year, nearly eight times more than he sold in 2020. Six years ago he and his wife Priscilla Chan pledged to give 99% of their wealth to charity during their lifetimes.
Jack Dorsey, the founder of Twitter Inc., has sold nearly $500 million in stock this year of another company he founded, Block Inc. Last year he announced a promise to donate a large stake in the company, formerly known as Square, to Covid-19 relief. (The billionaire has mostly not touched his Twitter shares, which comprises less than 10% of his $10.4 billion net worth, according to the Bloomberg index.)
It’s taken all year for Biden and congressional Democrats to coalesce around a tax bill. Along the way, Biden proposed a variety of other provisions targeting the wealthy, including an almost-doubling of the capital-gains tax rate for high earners. Most of those ideas have been dropped, and new proposals -- like a so-called “billionaire’s tax” on unrealized capital gains of publicly traded assets -- also didn’t make it into the House-passed bill.
“It’s been a bit of a roller coaster,” said Pratik Patel, managing director of family wealth strategies at BMO Family Office.
Even now, it’s not clear what the final changes might look like. Negotiations may slip into 2022, assuming Democrats can pass anything at all.
“Everyone feels like taxes are going up,” Patel said. But “there’s still uncertainty. A lot of our clients are in a wait-and-see approach.”
--With assistance from Jack Witzig.