How do they afford lavish personal lifestyle if they're declaring no income (I get the cap gains part, I don't get the mansions, parties, cars, food etc. Bit)
But in general, I assume that most of the perks of that wealth are really attached to the ownership/management of the corporation that produced the wealth.
Even without that loophole there are probably a bunch of tricks their financial planners have to minimise taxes (e.g. using trusts/charities, various tax free allowances).
Or alternatively, because they essentially get to defer taxes for as long as they like (by refinancing the loan), it means they have the full tax free amount of cash available up front to buy more wealth generating assets.
but you still pay the estate tax? Otherwise you get hit by the capital gains tax AND the estate tax.