Ultra-wealthy avoid taxes by taking stock compensation instead of salaries
Source: https://www.nytimes.com/by/the-ezra-klein-show. "Opinion | ‘Salaries Are for Suckers’ - The New York Times." April 17, 2026. www.nytimes.com
The Gist
Billionaires like Jeff Bezos pay very low tax rates because they take tiny salaries and instead get rich through their stock going up in value. Since you only pay taxes when you sell stock, they just borrow money against their stock instead of selling it, so they never have to pay taxes on their wealth.
Conclusion
The ultra-wealthy pay disproportionately low federal income taxes by structuring their compensation as stock appreciation rather than salaries
Premises
- Salaries are subject to high income taxes and payroll taxes
- Stock appreciation grows entirely tax-free under the current system
- Taxes on stock gains are only imposed when the stock is sold
- Ultra-wealthy individuals like Jeff Bezos can borrow against their stock holdings instead of selling
- This borrowing strategy allows them to fund their lifestyle without triggering taxable events
- Jeff Bezos has maintained a salary cap of $82,000 for over 20 years despite Amazon's massive growth
Assumptions
- The current tax system's treatment of unrealized capital gains creates unfair advantages
- Borrowing against stock holdings is a viable long-term wealth management strategy
- The ultra-wealthy have sufficient access to credit to sustain this approach indefinitely
- Tax policy should treat different forms of compensation more equally