How is it possible that a billionaire like Jeff Bezos has a lower tax rate than the average American The tax expert Ray Madoff joins nytopinion columnist Ezra Klein to explain how the ultrawealthy pay a disproportionately low amount of federal income taxes in comparison to their overall wealth theezrakleinshow nytopinion

You're Elon Musk or Jeff Bezos. Congratulations. Thank you. What kind of taxes do you pay? What don't you pay? How do you end up not paying income taxes when you're Jeff Bezos or Elon Musk? What are you talking about? So first of all, let's focus on Jeff Bezos because he's much more of a classic case. He started his own business. He owns a dominant amount of the stock. And over the course of the years, he has taken a salary that is no higher than $82,000. And it's been over 20 years now. And his salary is always capped at $82,000. And you might say, well, why would it be? He started the company. He's the man. Why isn't he taking a huge salary to reflect all of that he put into the company? And the reason is because salaries are for suckers. When people take a salary, they are subject to high income taxes and payroll taxes. And Jeff Bezos and a lot of our other multi-centi billionaires have no interest in paying those taxes. So instead, they take their benefits through the growing value of their stock. And their stock has grown enormously. And that massive growth of stock happens entirely tax-free with no time frame under our current system in which that stock will ever be subject to tax. And that is because we only impose a tax if the stock is sold. And Bezos never has to sell the stock because he can simply borrow against the stock and use that money to support his lifestyle and to pay any interest that's due on the loan.