yego.me
💡 Stop wasting time. Read Youtube instead of watch. Download Chrome Extension

Buy, Borrow, Die: How America's Ultrawealthy Stay That Way


less than 1m read
·Jan 31, 2025

Some of the very richest Americans pay little in taxes compared with how fast their fortunes grow each year. How? They use a tax strategy known as "buy, borrow, die." It’s like the ultrawealthy are living on another planet. Average people need income to pay for basics like housing and food. But the ultrawealthy don’t. They can just live on borrowed cash.

STEP ONE: BUY
The ultrawealthy buy an asset or build a company or inherit a fortune. As long as they don’t sell, they owe no taxes. They keep their income as low as possible, since every dollar they earn can be taxed.

STEP TWO: BORROW
They borrow against their holdings, and the bank gives them a really good deal. "I’ll loan you $10 million with only 3% interest. But if you take a $10 million dollar salary from your company, you’ll owe almost 37% to the IRS." So the ultrawealthy use loan money to fund their lifestyles. That’s how a billionaire can live the most luxurious life imaginable, while reporting little to no taxable income.

STEP THREE: DIE
When they die, these lucky few often use complicated trusts and philanthropic foundations to avoid the estate tax. And their heirs can inherit stocks and other assets tax-free. A new generation is ultrawealthy, and the cycle starts all over again.

More Articles

View All
Energy flow in a marine ecosystem| Matter and Energy Flow| AP Environmental Science| Khan Academy
In this video, we’re going to take a deeper look at the various producers and consumers in an ecosystem. For the sake of diversity, no pun intended, we’re going to look at a marine ecosystem. Let’s say, an estuary. An estuary generally refers to a place w…
Worked example: analyzing a generic food web | Middle school biology | Khan Academy
What we have here is a diagram of a food web that shows us how matter and energy are transferred between organisms in an ecosystem, but it’s a little bit abstract. They don’t tell us what these organisms are; they just say organism one, organism two, orga…
Artificial Female Reproductive Tract Opens New Health Frontiers | National Geographic
[Music] Avatar being a virtual representation of a human being, and in this case, it’s a biological representation of the female reproductive tract. So, we call it Eva Tarr. The system that we’ve invented together with Draper laboratories is a series of …
Evaluating a source’s reasoning and evidence | Reading | Khan Academy
Hello readers. How do we know what is true and what isn’t? My mama always told me, “Don’t believe everything you read.” Just because someone took the time to write something down, send it off to be typeset, designed, and printed in a book, or published on…
Khan Academy Needs Your Help This Back to School
Hi everyone, Sal Khan here from Khan Academy. I just want to remind everyone that, as we’re going through what’s clearly a very difficult time, especially, well, in the world generally, but especially in education, the entire team here at Khan Academy is…
Why I Stopped Holding Cash
What’s up, Graham? It’s Guys here, and I want to talk about something rather concerning that’s been brought up a lot lately on my channel, and that has to do with this statement here: “25% of all US dollars were created in 2020.” Now, usually, it’s easy …