The ultra-wealthy have effectively shielded $1.76 trillion from taxes by living off loans taken against their stocks instead of selling them.
March 31, 2026
Original Paper
Why Redistribution Policies Fail: An Analysis of Tax Avoidance Mechanisms and Wealth-Based Inequality in America
SSRN · 6365279
The Takeaway
This study quantifies the 'Buy, Borrow, Die' strategy, revealing that nearly one-fifth of all U.S. wealth is held in unrealized gains that are never taxed. By using 'Securities-Based Lending,' the wealthy can access their cash tax-free, creating a tax gap that in some years is larger than the entire budget of NASA.
From the abstract
This study aims to determine the tax revenue loss due to unrealised capital gains in the United States between 2000 and 2025, filling a major information gap in the literature on tax evasion based on wealth. Using data from the Internal Revenue Service Statistics of Income and the Federal Reserve Distributional Financial Accounts, this study calculates the level of unrealised capital gains as a proportion of total asset value and potential deferred tax revenue. The study finds that unrealised ca