How Nvidia CEO Jensen Huang Is Avoiding $8 Billion in Taxes – Jensen Huang, the head of Nvidia and the man ranked as one of the richest Americans, is said to have planned for him not to pay $8 billion in taxes.
Currently, his net worth stands at about $127 billion, most of which he has earned through Nvidia’s performance within the semiconductor market. As we have seen, Huang should be paying millions in estate taxes, yet he is employing the following strategies to make it difficult for the U.S. government to out on him.
Financial Strategies to Avoid Taxes
- Irrevocable Trust (2012)
In 2012, Huang set up an irrevocable trust of 584,000 Nvidia shares. It was valued at $7 million at that time. This kind of trust helps to avoid both estate and gift taxes and is fashioned in such a way that growing assets can be transferred tax-free. - Grantor-Retained Annuity Trusts (GRATs, 2016)
Huang and his wife, Lori, established GRATs in 2016. These trusts enable the grantor’s property to be transferred to the beneficiaries without struggling with estate tax if the value does not go beyond what is refunded to the grantor. Many of these shares have increased in value while others are now worth over $15 billion, bringing the tax burden on Huang’s estate down.
Broader Context of Ultra-Wealthy Tax Avoidance
Huang’s tactics on evading taxes are common among the new generation of the super-rich, such as the likes of Blackstone’s Steve Schwarzman, Meta’s Mark Zuckerberg, and the senior management of Google. These financial tools, for example, the irrevocable trusts and the GRATs, are used so that their estate would not be subjected to very high estate tax, which would be due upon their demise.
The Estate Tax System’s Role
How Nvidia CEO Jensen Huang Is Avoiding $8 Billion in Taxes: The U.S. estate tax system, which was established to generate a significant amount of revenue, especially from the rich, has not brought in nearly as much revenue in the current years as was anticipated. If it had kept pace with the growth of the ultra-wealthy, reports suggest that the estate tax could have generated up to $120 billion in 2023 alone, instead of the much smaller figure that was collected.
Overall, Huang’s case represents how the richest people can use legal approaches to avoid significant tax burdens and highlights the broader problem of how the U.S. tax system fights to capture wealth from the richest citizens.
