Everybody's Business Salaries are for Suckers
Feb 20, 2026
Ray Madoff, law professor and author of The Second Estate, breaks down how the ultrawealthy dodge income taxes using investment income, stock strategies, and borrowing against assets. He outlines why state-level wealth levies face valuation, mobility, and enforcement hurdles. The conversation probes the political power and reforms needed to close glaring tax loopholes.
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How The Ultrawealthy Avoid Income Taxes
- Ray D. Madoff explains billionaires avoid income tax by eschewing salaries and relying on stock value growth.
- They borrow against stock appreciation to live tax-free because gains aren't taxed until sale.
Borrowing Against Stock Sidesteps Taxation
- Madoff describes using stock as collateral lets the wealthy access cash without triggering capital gains tax.
- States face valuation and enforcement hurdles when trying to tax such complex, private holdings.
Practical Limits Of State Wealth Taxes
- Wealth taxes are theoretically appealing but practically fraught due to valuation complexity and taxpayer mobility.
- Madoff warns state-level wealth taxes could push assets out of public markets and harm ordinary investors.