Capitalisn't How To Fix The American Tax System - ft. Ray Madoff
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Jan 6, 2026 Ray Madoff, a tax law scholar and author, dives into America's complex tax system. She challenges the popular narrative that the top 1% carry the tax burden, revealing how the ultra-wealthy evade taxes through loopholes and trusts. Madoff critiques the ineffectiveness of the estate tax and discusses how philanthropy often serves as a tax avoidance tactic. Highlighting the urgent need for reform, she proposes taxing inheritances and investment gains directly. Madoff's insights push us to rethink fairness in taxation and wealth distribution.
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Taxable Income Is The Real Target
- Taxable income, not headline rates, determines who actually pays taxes in practice.
- Raising top rates won't reach the ultra-wealthy because they avoid reporting taxable income.
The Buffett Example Misleads
- Ray Madoff uses Warren Buffett's op-ed to show how misleading the 'Buffett rule' argument was.
- Buffett paid little tax on wealth growth because Berkshire rarely paid dividends and unrealized gains go untaxed.
Buybacks Hid Taxable Returns
- Corporate payouts shifted from dividends to buybacks, reducing taxable distributions to shareholders.
- The shift starved federal revenue because gains remain unrealized and untaxed while prices rise.
