THE ATLANTIC MAGAZINE (March 17, 2025):

America’s superrich have always found ways to avoid paying taxes, but in recent years, they’ve discovered what might be the mother of all loopholes. It’s a three-step process called “Buy, Borrow, Die,” and it allows people to amass a huge fortune, spend as much of it as they want, and pass the rest—untaxed—on to their heirs. The technique is so cleverly designed that the standard wish list of progressive tax reforms would leave it completely intact.

Step one: buy. The average American derives most of their disposable income from the wages they earn working a job, but the superrich are different. They amass their fortune by buying and owning assets that appreciate. Elon Musk hasn’t taken a traditional salary as CEO of Tesla since 2019; Warren Buffett, the chair of Berkshire Hathaway, has famously kept his salary at $100,000 for more than 40 years. Their wealth consists almost entirely of stock in the companies they’ve built or invested in. The tax-law scholars Edward Fox and Zachary Liscow found that even when you exclude the 400 wealthiest individuals in America, the remaining members of the top 1 percent hold $23 trillion in assets.

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In theory, a democratic system, operating on behalf of the majority, should be able to respond by making adjustments that force the rich to pay their fair share. But in a world where money readily translates to political power, voice, and influence, the superrich have virtually endless resources at their disposal to make sure that doesn’t happen. To make society more equal, you need to tax the rich. But to tax the rich, it helps for society to be more equal.

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Rogé Karma is a staff writer at The Atlantic.