How the Rich Dodge Taxes, and the Price We Pay as a Result

Photo by Steve Rhodes

This piece originally appeared on Fran Quigley’s Substack We Can Do Better: Ending Poverty in Our Time on Aug 28, 2026

Ray Madoff teaches tax law at Boston College Law School and is the author of The Second Estate: How the Tax Code Made an American Aristocracy, named a Best Book of 2025 by The New Yorker. Ray has spoken about this important book in all kinds of venues, including the New York Times and NPR podcasts, and has written about this topic for The Atlantic.

In our conversation for We Can Do Better, we talk about why Ray says that, after the Constitution, the tax code is the single most important document affecting American lives. She explains how the country has become a land of two sets of people: overburdened workers shouldering the cost of running the country and an American aristocracy of wealth and power who are allowed to dodge their tax responsibilities.

How is this “American Aristocracy” pulling this off? By building their wealth through stock and property, which they can avoid paying taxes on, instead of wages, which are subject to tax. “Salaries are for suckers,” Ray tells us.

That leaves our eviction court clients and the rest of us working “suckers” paying far more than our fair share, especially in payroll taxes. Ray breaks down the lie behind the oft- repeated line, by Jeff Bezos and others, that the wealthiest 1% of Americans are paying 40% of the taxes while the bottom 40% are paying none.

That is just the latest falsehood used to hoard wealth. In the 1990’s the nation’s richest families, hoping to inherit billions tax-free, launched a political and PR campaign claiming falsely that family farms and businesses were at risk by taxes on inheritances. They succeeded in labeling our country’s estate tax a “death tax,” and now rake in tax-free wealth that they did nothing to earn.

But we can do better. Ray explains to us how we accomplish that, including her counter-intuitive plan to fix the estate tax by eliminating it. Instead, we will require inheritors of great fortunes to pay taxes on their windfalls—just like the rest of us pay taxes on any income we receive.

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