This is a pretty solid explanation.

To add some context, you used to be guaranteed a portion of profits in the company but that doesn’t happen now. Some stocks pay dividends but unless you own a lot of those, it won’t do you much good. Owning stocks now, does give you the right to participate in voting. Mark Zuckerberg owns voting control of Meta, meaning he can’t be removed from his position by shareholders because he owns enough votes (shares) that he can’t be overridden.

Another thing you hear people talk about in relation to stocks is capital gains tax. Taxes on stock depend on how long you owned the stock. Less than a year, you get charged a higher tax rate on selling because you’re flipping it for profit; short-term vs long-term gains. Those taxes is only applied to the profits of the sale.

Stocks are assets, however, and investors can borrow against it without selling in the same way you can get aa home equity loan against your house without selling your house. Since they aren’t actually selling the stock, they aren’t paying taxes on those profits.

Thats why some politicians, like Kamala Harris, have suggested a tax on unrealized gains (profits on stocks that haven’t been sold yet). It would be a way to close the loop hole of billionaires not paying their fair share. It sounds kind of shitty to pay taxes on assets you don’t have in hand until you realize how stocks are used to avoid some taxes.