It works differently as it is after you make the gain, not at the moment. You can have a start up, buy the inital shares for 1k, sell it for 1M, pay no weakth tax (or close to 0) if your valuation during filing a tax return wasn't above a certain amount, get the cash and move somewhere else. If you stay here you will be taxed slowly every year but the rich doesn't do that as they put their money in LLCs etc.