Why can the U.S. stock indices keep rising for over a century? Dad bought stocks for $200,000, They grew to $10 million. If he sells, he’d have to pay taxes on the $9.8 million profit. So, he doesn’t sell. Instead, he can borrow against the stocks as collateral, rather than selling them—loans aren’t taxable. But most of the time, he just holds onto them. When he passes away, he still holds those shares. On the day he dies, the cost basis of the stocks resets to $10 million, not $200,000. The kids inherit them at $10 million, And the $9.8 million in gains? The income tax on that disappears. They can sell the next day and pay almost no taxes. The system is designed so that winners won’t sell easily.