In the US you only pay capital gains tax on stock when you sell.
So it can look like you made a big profit year after year if the stock you own goes up, and it looks like you didn’t pay any tax. But that money isn’t available to you until you sell, and that’s when the tax comes into effect.
This applies to everyone, and so it can look like a tax dodge, but it’s just the way things are accounted.
Actually, that stock appreciation value IS available to you. You can get a very low interest (sub 1%) loan using your stock as collateral. If you have enough stock (like the very wealthy), you can just keep doing this and paying off the interest with more loans.
Then, when you die, your estate can take advantage of the step up rule. Which means that instead of using the original value of the stock you bought as a basis to calculate your profits, the basis is "stepped up" to the value of your stock on the day you died. After which, your estate can sell the stock and pay no taxes and then pay off the loans you lived off of your whole life.
And that is exactly why companies with founders that own lots of shares are no longer paying out dividends and trying to make a profit. They simply put everything possible back into growing the stock price eternally. Because dividends are taxed. Stock appreciation, if you are rich enough, is not.
