Episode Transcript
[00:00:04] Jeff Bezos is right about the bottom half, but what about the top?
[00:00:09] The bottom half pays little, billionaires pay relatively little. And in between, someone is footing the bill. I'm Diana Earley at the Pressures of Privilege. May 24, 2026.
[00:00:22] Jeff Bezos says the bottom half of American earners should pay zero federal income tax.
[00:00:28] A lot of people heard that and got angry. I heard it. He's not wrong. But his moral example in nursing queens making $75,000 was off.
[00:00:36] She's above the bottom half, cut off of roughly $53,000. He says the bottom half contributes only 3% to tax coffers, and we could find that money somewhere else. So I'd like to ask Bezos where he suggests we find the extra tax revenue.
[00:00:53] The top 1% statistic sounds like it captures billionaires like him, but it really captures reported income. In 2023, taxpayers with adjusted gross incomes above about $675,000 paid 38.4% of federal income taxes. That includes wages, business income, dividends and realized capital gains. But not unrealized gains or borrowed money.
[00:01:20] As long as the stock market price doesn't fall, people like Bezos are able to live on borrowed assets.
[00:01:28] Here's how it works. A billionaire borrows against his stock to pay for his lifestyle. The loan is not income, and there's no tax.
[00:01:35] Later, if he sells the stock to repay the loan, he pays capital gains tax, but only on the appreciation above his cost basis.
[00:01:44] The capital gains rate talk tops out at 20%, well below the 37% top rate on ordinary income. A salary is taxed at nearly twice the rate of a gain, and he does so only when he decides to sell, perhaps at a time when he has a lot of deductions, minimizing the tax even further.
[00:02:04] The taxing the rich argument isn't going to accomplish its intention.
[00:02:09] It is going to reach the upper middle. People living off at $200,000 a year or more.
[00:02:16] The widow in Florida on dividend income or the doctor in New York on a salary. These are part of the 1%, but they are very different from billionaires who flaunt their wealth.
[00:02:27] A rocket business, a yacht and a Venice wedding with a guest list that includes business associates could be a business expense. We don't always know where personal spending ends and the balance sheet begins.
[00:02:39] Or take Hansjerg Wiess. He's Swiss. He built a medical device company, sold it to Johnson and Johnson for roughly $20 billion, and has since given away billions to conservation and science.
[00:02:51] He says he supports an inheritance tax in Switzerland, but he lives in Wyoming, where there's no state income, estate or wealth tax. If he lived in Switzerland, they would tax his net worth every year. Switzerland has no capital gains tax on equities and little inheritance tax, but it does have that annual wealth tax on the pile itself.
[00:03:13] Here we tax income, not wealth. I don't blame him for taking the choice the system offers, but I do notice that he publicly supports the tax he privately escapes to lump. The doctor in Massachusetts who earns 300 grand a year with someone like him is lazy.
[00:03:30] At my beach club recently, the kind of place where how you wear your money matters more than how much you have, I brought this topic up. The people I spoke to, people who are not billionaires, disagreed with Bezos, by the way, Bezos could probably afford the dues, but he wouldn't fit the room. They said everyone should pay taxes. It's part of the American agreement. Even a small amount means you have skin in the game.
[00:03:57] When I opined that billionaires should pay more, they pushed back.
[00:04:01] Billionaires earned their money, they said. They employ people. They create wealth. Then I told them that their bracket, people earning 200,000 to a million dollars a year from work or interest and dividends, is actually footing a large part of the federal income tax bill right now.
[00:04:18] In other words, they are subsidizing the billionaires. They look stunned. They hadn't looked at it that way.
[00:04:24] Here's what I keep hearing Tax the rich, but I rarely hear anyone define which rich they mean.
[00:04:32] Someone earning 200 grand to $350,000 a year is earning a salary. It is taxed as ordinary income. Someone earning 500 to a million from work is taxed heavily on every dollar. Someone with 5 to 10 million in net worth has security, but much of it is probably tied up in a house, a business or retirement account.
[00:04:54] Someone with 10 to 30 million is rich, but that wealth is finite.
[00:04:59] Someone with $30 million or more in investable assets is playing a different game.
[00:05:04] That billionaire is in a completely different financial category from any of us.
[00:05:09] The top 1% is defined by income, not net worth, and doesn't reliably capture the billionaire class.
[00:05:17] The reason? Billionaires can arrange their finances so that very little income appears in any given year. The public is not wrong to be angry. What they're reacting to is real. The spectacle is easier to see than the structure behind it.
[00:05:32] Bezos, Venice wedding, the boats, the celebrity guests. The excess has let them eat cake quality.
[00:05:40] Warren Buffett escapes most of that anger because he looks restrained same house, simple car, not leaving everything to his kids.
[00:05:48] The same tax questions apply to his appreciated stock and unrealized gains.
[00:05:53] It's the in your face quality of the spectacle that provokes the anger points at symptoms, not the cause. The lifestyle that people find offensive is funded by money the income tax system was never built to reach.
[00:06:06] The federal income tax is visible money salaries are visible. Bonuses are visible. Realized capital gains are visible.
[00:06:14] Unrealized appreciation is not. Borrowing against stock is not.
[00:06:19] So when people say tax the rich, they usually end up targeting the people whose money is easiest to see.
[00:06:25] A tax on spending misses the billionaire who claims to own nothing.
[00:06:30] A tax on income misses the billionaire who borrows instead.
[00:06:34] The money is there. The category isn't Jeff Bezos is right that the bottom half shouldn't be the focus. But until we define which rich we actually mean and which money the tax system can actually reach, we'll keep having a debate that sounds like it's about billionaires and keep landing on people with salaries.
[00:06:58] If this episode landed for for you, share it with someone who might need to hear it. And if you haven't already, subscribe so you don't miss what's coming. But here's the real thing. I want you to know if you're carrying something you can't talk about, if you have every resource except someone who actually understands what wealth costs. I work one on one with people like you navigating exactly that. You can reach me@diana oehrli.com thanks for listening.
