How To Actually Tax The Rich — ft. Ray Madoff

26:20And so the question for me is, and that is this is the estate tax. That's we tax those assets. Why isn't that working? Why is that a problem still? And that's a really important part of this conversation of understanding this issue, because we have all these seeming failures in our income tax system, right? We don't tax appreciation. We also don't tax money received by inheritance. So if you find$100 on the street, you leave your office, you find$100, you are supposed to report that to the IRS and pay taxes on it. However, if somebody hands you$1 million or$10 million or even$10 billion, you don't even have to report it.

27:05You don't have to tell anybody. You don't have to pay any taxes on it. And that also applies to money you receive by life insurance and money you receive by gifts. All of that is entirely tax-free. Well, why do we have this enormous giveaway in the income tax system? The answer is because we count on a robust estate tax system sweeping up and making sure that these untaxed forms of income are eventually subject to tax with what had previously been a pretty onerous tax. The estate tax was enacted just a couple of years after the income tax, 1916. We've had it a long time. And for a long time, it did its work.

27:48Basically, we had a tax and we had a Congress that kept up with reforming the tax. So in 1976 and 1986, we had a problem of these long-term trusts and Congress enacted this whole additional tax as a backup called the generation skipping transfer tax. Then we had a problem with valuation gaming techniques. So four years later, Congress enacted special valuation rules and a whole other group of a whole other section to the code. And these were both enacted under Republican presidents. So this was broad bipartisan support, supported keeping this tax up to date. However, what you and your listeners might remember or – well, I guess maybe – Ed, you might not remember it, but maybe you've heard about it.

28:40I'll pretend I do. Pretend you did. Before you were born, there was, in the early 1990s, a campaign funded by 18 of the country's richest families. And that campaign was designed to turn the public against the estate tax. They sought estate tax repeal. And George W. Bush was a big carrier of the banner. And their most effective thing that they did was they hired this guy by the name of Frank Luntz, who was a communications expert. And he said, never call it the estate tax because that sounds like something that's for rich people. Instead, call it the death tax. And we'll bring this campaign and we'll say it's unfair and it's a double tax and it hurts family farms and businesses.

29:23And we're going to run this campaign. And this campaign was extraordinarily effective. not for their goal that they sought to achieve, which was actual get rid of the estate tax from the books, but it was successful in a way that was ultimately even, I'll argue, more successful, which is what they did is they were so successful in their campaign to make people feel uncomfortable with this idea of the estate tax that Congress stopped doing its job in terms of closing loopholes. Indeed, the last time that Congress has closed a single loophole was in 1990, 36 years ago. And so as a result, over the past 36 years, there has been a proliferation of tax avoidance techniques that have been allowed to occur.

30:17They all have this sort of Dr. Seuss-sounding names, crats and cruts, clats and cluts, grats and gruts, Q-perts, Q-tips, Q-dots, the whole panoply of them. And as all of these exclusions have developed, the estate tax has been completely corroded, so it no longer does anything. Not because the exemption is too big, which it is big, it's$15 million and it used to be$1 million, but because of all of these things that take these transfers out altogether. And so to raise or lower the exemption or raise or lower the tax rate will not be effective because this tax has been effectively killed. And so we're not going to start seeing all types of robust action with respect to this estate tax.

31:11And I think it's because the estate tax, it wasn't just, well, we're always vulnerable to rich people. I think the problem was that the estate tax had an Achilles heel, and that is that it was theoretically designed to be imposed on the donor, on the dead person. And so what it meant was for those individuals who indeed paid high income taxes their whole lives, right? They paid lots of income taxes. Now we're imposing a second tax on them, and it seemed kind of just punitive in some weird way to the public. This was made easier because the public doesn't know very much about what happens on the income tax side.

31:55Most people don't know that money received by gifts and inheritances and all of those things are tax-free. And I know this is true because in this area, a lot of people ask me, well, if I give more than$19 ,000 to my kids, don't they have to pay income taxes on it? This is because of some gift tax exclusion amount. But people are confused about this. And so the estate tax is a kind of an awkward tax, and it made it easy for Congress to stop acting. What's particularly interesting is that the estate tax has become so ineffective that, and I'm going to give you a number, which is truly shocking, when the top 1 % of Americans had$55 trillion, which is how much they had in 2025, the total amount raised by the estate and gift tax, which is supposed to be a 40 % tax on all transfers during life or at death, the total amount raised was$28 billion.

33:01That's 0.06%. It's nothing. And it's not because of the exemption amount. It's not because of the lower rate. It's because people are able to avoid the tax altogether. And that's what the problem is. I was just about to ask you if there is a rough number that we can estimate on how much we are losing to this issue, to this estate tax loophole. And you've given us our answer there north of$20 trillion, close to$30 trillion, it sounds like. Right. If you think about that, we're designed, we're supposed to have a tax on the top 1 % and that percent has$55 trillion. By the way, this is a time where the total revenue raised by the federal government is like$5 trillion.

33:43So they have massive amounts of wealth. So when people say it doesn't matter if we tax the rich, that is just simply not true. It almost sounds as if fixing this problem would solve a lot of our problems. And this gets to something else that I'd like to get your views on. Can I add one more piece here before we do? Please, yeah. I think the thing that makes it most telling that the estate tax is actually something that now works as a cover for the rich rather than as a burden is the fact that in 2025, a time when the Republicans fully controlled that new tax bill and they easily could have repealed the estate tax, they chose not to do it.

34:24No mention of it. It had been their number one issue, but now all of a sudden they didn't care. And that's because they wanted to preserve all of the income tax benefits they got when there was an estate tax that provided cover. So, Ray, this gets to one of my concerns about our future in America. I am becoming increasingly concerned about the possibility of what we're calling an inheritocracy, where we have been in so many ways ruled by the Elon Musks and the Bezoses of the world. And that was especially true after Citizens United and the billionaire spending on political campaigns exploded and they started to buy our elections.

35:03And that's not hyperbole. That is literally what happened. And we're seeing a lot of blowback and pushback to that. But I think that we're about to see something even worse if we start to see that the world isn't run by the guys who created these incredible tech companies, but by the children of the guys who created these incredible tech companies. Which, by the way, we're already starting to see in the media world, where Paramount and Warner Brothers Discovery soon enough is about to be owned not by Larry Ellison, but by the guy who inherited the Larry Ellison fortune, by David Ellison. We see this in the world of the Murdochs.

35:42We see this with Canda Fitzgerald, where the Commerce Secretary's sons are now running one of the most important banks on Wall Street, etc., to the point where it seems that we're going to see a real loss of faith in the system itself if we wake up one day and suddenly we're ruled by all of these rich kids. I had always thought that maybe the estate tax exemption is the way to fix that and the fact that we increased it with the big, beautiful bill to me was like, well, that's obviously not the right direction. You're saying that, no, that's not the problem. It's these loopholes. My question is, what do we do about this then?

36:19So I think the first thing that we need to do is we need to recognize that the estate tax has been really effectively killed. And as I mentioned, I think it is because it was easier to kill because of this vulnerability that it was imposed as a sort of a second tax on the person who dies. And so for a lot of reasons, I think that we have to understand that this is not a tax that's going to be resurrected. But it will actually help us more to get rid of the tax than to keep it. Because when we get rid of the estate tax, we see about how our income tax system preferences inherited wealth. And we have a tax system, as I mentioned, that has the income tax system is designed to be very, very broad.

37:10It starts this idea that gross income includes all income from whatever source derived. And so much so that even if two people do a barter exchange, right, somebody says, I paint your house in exchange for you filing my taxes, each of those people are supposed to pay taxes on the value of what they received for that exchange. Really broad, comprehensive tax. And then you look at this tax and you look at gifts, inheritances, life insurance, and they're all excluded. Well, there's no justification for having a broad exclusion of all of those sources of income when lottery winnings and every other type of acquisitions of money is subject to tax.

37:53So by getting rid of the estate tax, it frees us up to bring inheritances, gifts, and life insurance back into the income tax system where they belong. And there's a number of advantages to that. First of all, the tax will be imposed on each person who receives the money based on their appropriate income tax bracket. And it will also give us a chance to get rid of all of those problematic aspects of the estate tax that allowed for so much tax evasion, right? We could do a tax on inheritances 2.0 that is more appropriately levied on the recipients of inherited wealth. When we do so, we're going to need to think directly about how much, if at all, do we want to subsidize inheritances.

38:39I do think inheritances have become increasingly important for a lot of Americans, particularly as our young Americans are having a hard time getting jobs that are sufficient to support the lifestyle, what we used to consider a basic middle-class lifestyle. Things like owning a home, being able to send your kids to school. A lot of people are depending on inheritances to help them acquire those basics in life. And so I think that we need to understand that we need to provide some exemption for inheritances. But when we recognize that it is an actual exemption for inheritances, then we can come up with a reasonable amount.

39:25Maybe each person should inherit, be able to inherit$1 to$2 million tax-free. And after that, they'll pay ordinary income rates, right? We can have a more coherent system by bringing it into the income tax system. Beyond loopholes, one thing that's also interesting, we were discussing the difference between capital and labor. And outside of these loopholes and outside of borrowing against the assets, the reality is the tax rate on capital gains is just significantly lower than the tax rate on income. um and i'm i we have this chart here from this this 2022 study which shows that the percent that the tax rate on capital actually used to be higher in america compared to the tax rate on labor and then recently it flipped but also i would point out that this has been the subject of debate on like how exactly are you calculating what that tax rate is on labor versus capital so Gabriel Zuckman, who's written a lot about this, he did a study and he said that it flipped as recently as 2018.

40:27So there's all this debate on what actually is the true tax rate on capital versus labor. But the larger point being, should we really be taxing people's work, people's income, at a higher rate than the income that they receive or the appreciation that is realized on the appreciation of assets. And I'd just like to get your views on that. Should we essentially be just increasing the capital gains tax? We absolutely should be increasing the capital gains tax and equalizing it with the ordinary income rate. There's a lot of, you know, you'll get 50 reasons about why people who want to keep that reduced rate, you know, all sorts of reasons that they have, but none of those 50 reasons actually stand up on their own.

41:16And so I believe absolutely we should be equalizing the rate. The one thing that I think that we could do is we could provide inflation adjustment for recognizing gain. So let's say that somebody buys a house a long time ago. They buy it for$100 ,000, and now it's worth a million dollars. But inflation has gone up so much that their actual gain, they're not really better off by$900 ,000 because that money isn't going to buy as much anymore, right? They can only just buy that same house or buy a less good house. I'm not explaining this well. But a lot of that gain will be due to inflation. And so I think that we could equalize rates but allow for adjustment for inflation of basis so that people are not paying taxes on the inflation gains.

42:09And that would be a way of softening that as it applies to long-held assets. That seems like a great solution to me. Just make them equal capital gains and income tax. Just make them the same. The thing that has confused me, though, is that I'm not aware of any societies or maybe Western societies. Maybe I'm just not looking hard enough where that is the case. And I guess my question is why? Why is it standard that capital gains are taxed at a significantly lower rate than standard income? Well, first of all, right here in the United States, they were taxed at the same rate in 1986. This was a tax bill.

42:52The 1986 Tax Act was put forth by President Ronald Reagan. And I think that what he did was he brought down top rates but equalized capital gains and ordinary income. So it's definitely something that can be done. And one of the things I talk about in my book is how Andrew Mellon, who was one of the early Treasury secretaries and was very conservative, a staunch, anti-tax-the-rich kind of guy, wrote himself that he saw no reason for taxing capital less than labor. And indeed, he thought capital should be taxed much higher than labor because capital is something that grows without anyone's effort, whereas labor is something that requires a lot of work.

43:32And so I think that it's definitely doable, and we've had it in our not-so-distant past. Is there an argument that maybe it reduces investment or that it could just have an overall downward effect on, I guess, the stock market? One argument that you'll often hear is somebody will get very wonky and they'll say the statistics show that if you raise capital gains rates above a certain amount, then you stop raising money because people stop selling their property. Something like that, right? But the reason that that is the case is because we allow people to avoid capital gains by avoiding sales. The problem was that loophole.

44:20If you close that loophole, then people will not be able to avoid capital gains. And that is one of these arguments that looks and sounds really persuasive, but really isn't when you look at it. We'll be right back. And for even more markets content, sign up for our newsletter at ProfGMarkets.com.

44:46Scott Galloway:Okay, so today we're driving to southern New Jersey. and heading to a data center. A couple of weeks ago, I read a story in NJ.com and it was all about how there's a data center going up in Cumberland County, the poorest county in New Jersey, that's receiving some community pushback. And this immediately got my attention because data centers are going up all across the country. I feel like we should be hearing politicians talk more about this, but we haven't really heard a consensus. Are data centers really a necessary evil? Let's find out. This is technology we've never seen before. Right. Experiment.

45:24Scott Galloway:We're the experiment down here. And we're the guinea pigs. Right. And we're the guinea pigs. Exactly. Exactly. One thing that happens in this country is there's no planning for the future. Is it benefiting people or is it benefiting the elite and the money that's going into their pockets? This is not about abstract politics. It's about people's everyday lives. That's this week on America Actually. Why is this? It's still like burning inside of me that I feel like I am missing something. I prayed so hard for my girl. I prayed like every night, prayed, prayed, prayed. And when I lost my babies, it was so hard so that when I had them, I thought that was going to be the thing.

46:05Scott Galloway:Like I am finally getting the thing that I prayed for and it's going to fulfill me. And this is everything I want and more. And it was, but it was also something missing. I'm Raven Arson, and this is Motherhood, the remix from Project Swagger. This series is about defining our own versions of motherhood. I am bringing in a mama I adore and admire, my friend, fellow Peloton instructor Kirsten Ferguson. Listen now at Project Swagger.

46:40Scott Galloway:This week on Net Worth and Chill, I'm telling you my entrepreneurial origin story, how I went from working a nine to five and making internet videos on the side to walking away from a$625 ,000 a year job to take your rich BFF full time. I'm breaking down exactly how I knew it was time to make the leap, how I set myself up financially so I wasn't just winging it and what it actually takes to survive and thrive as your own boss. From cashflow to taxes to building multiple income streams, because let's be real, Becoming an entrepreneur sounds amazing until you realize you have to figure out all of this yourself.

47:15Scott Galloway:I did, and now I'm giving you the blueprint. Listen wherever you get your podcasts or watch on youtube.com slash yourrichbff.

47:27We're back with Prof G Markets.

47:30Scott Galloway:So, Professor, let's assume the administration comes to you and says, OK, we're going to cut some expenses. We need fiscal sanity here. And we're going to cut some spending, but we need to raise revenues. What would be your two or three ideas for what I would refer to as the least taxing or most equitable tax increases? So the first thing, as we talked about, is to make sure that unrealized gains have a time of realization. So that should be whenever the property is transferred. That's the first step. Brings coherence to the system. So just let me press pause there. So what about 1031 exchanges or putting things into an LLC?

48:09Scott Galloway:Doesn't matter. As soon as it changes title, it's taxed. Absolutely. When you change title, you're subject to tax. And within hedge funds, when you buy and sell stocks, they're also sometimes able to defer taxes. Any transaction, would that go for equities and other property as well? Whenever somebody no longer owns that property, that's when the gains should be tallied for that person. The second thing that I would do is repeal the estate tax because it is providing cover for the rich and not imposing any taxes or raising any revenue. And we should decide how much we want to subsidize inheritances.

48:45That's the question that we're asking, right? To what extent should somebody who would otherwise be subject to tax on all income that they acquire be able to acquire an inheritance tax-free? Maybe it's a million dollars. Who knows what that amount would be? but bring that into the income tax system, bring inheritances into the income tax system. And when we do so, we'll have the chance to fix all of those various avoidance techniques that we have that have become so entrenched in the estate tax world, because it'll be a clean slate and we'll be able to have a smarter tax that avoids those problems.

49:21And then the third would be to equalize the tax rates between capital gains and ordinary income. Love that.

49:28Scott Galloway:And then my fear, the only thing, and again, it's the only thing you've said that I'm not 100 % in line with, but I find that the tax code's gone from something like 400 pages to 4 ,000. And those 3 ,600, I think, are mostly there to screw the middle class by creating all sorts of loopholes. When I sold my company, the first$10 million was exempt. And I just don't see any reason for that. I still think alternative minimum tax is the way to go because there's too many lobbyists who will figure out a way to keep inserting different loopholes. But we have an alternative minimum tax right now, and it's not doing its job.

50:03Scott Galloway:So it doesn't have any teeth. Exactly. The AMT doesn't have teeth. Well, isn't that because the AMT, quite frankly, isn't an AMT? It's an AMT that you can still stop, that exemptions can still get around? Right. But if we can, I mean, I think that what you're saying is we need to clean up the system and make it better. I totally agree. But I just think the use of the word AMT makes it sound like that is a single response to the problem rather than the problem is to actually do a more granular approach to things like, for example, like that exemption, those exemptions for startup businesses that you got.

50:38You know, I think those all need to be cleaned up. But I think a lot of work can be done by making sure that we're taxing investment gains and making sure that we're taxing inheritances. I was going to say not on that list is a wealth tax, which is the most popular proposal in the political sphere right now, making ground in California. AOC has been talking about it. Why no wealth tax? I think that we all understand now that the problem is that wealth owners have enormous acquisitions of wealth and they're not paying tax. And so the answer, the obvious answer seems to be let's tax their wealth.

51:17And particularly for people who have publicly traded stock where we can so easily see how much wealth they have. The problem is that these – sometimes these easy answers don't actually work. And I feel that's the case with the wealth tax. On a federal level, there's a very serious problem about whether the Supreme Court would find it unconstitutional. We have every reason to think that the Supreme Court would based on a recent case. And, you know, they didn't have to go that way. But there was a recent case more where they basically said, oh, yeah, we might very quite well find this unconstitutional.

51:54So on a federal level, there's a real problem. And then on state level, there's a problem because states, people can easily move from one state to another. And we see this happening. They can move countries. Well, I disagree about that. You cannot – in Europe, you can move countries very easily because in Europe, you have the EU, you have free transport, and you don't have a unified tax system. I do not think we're going to have a serious problem in the United States of people leaving the United States and becoming citizens of Qatar or other countries.

52:27Scott Galloway:Well, you have to turn in your passport and there's an exit tax. What I'm talking more about is corporations. Well, that's a separate—corporations is a whole separate issue, but I think that right now we're talking about individual taxes. To your point, a wealth tax is what I think my party does a lot, and that is they want to be right as opposed to effective. I think a wealth tax makes a lot of sense, but they don't work because wealthy people are incredibly mobile. Capital is incredibly mobile. And also, I think on the corporate side, and I'm curious even going broader, don't you think we're going to need some sort of – and to her credit, Secretary Yellen was able to get this through.

53:06Scott Galloway:I think that's right. But unless we get other nations to cooperate and unilaterally enforce some sort of corporate minimum tax, you're going to continue to see taxation not realized where it's – or revenues not recognized where they're realized. There's still going to be all sorts of arbitrage internationally taking place, no? I want to add one thing about the estate tax that makes the – I mean about the wealth tax that makes the wealth tax particularly problematic, which is the problem of valuation, as you mentioned earlier. We tend to think of it as like publicly traded companies, but lots of people own these highly complex partnership interests that are like 50 levels deep of partners, and people might own levels at all different places.

53:47And the idea that we're going to have a strong enough IRS to be able to do annual taxation on these very complex interests I think is really problematic. And there's going to be a great incentive for people to move their assets out of the easy-to-value stock market to the difficult-to-value partnership interest. And that could impose a cost on all of us who have retirement and other savings that really depends on a robust stock market for our own savings. And so I think there's a lot of problems with the wealth tax. If we could get it done, let's say that our IRS was highly effective and our appraisal systems worked, do you think that it would be the right move if it were possible?

54:31I think if it were possible that it was constitutional, that people weren't going to move, that it could be effective and that we could get the value and we could get the public to not recoil at the idea that you have to report every single thing you own to the government, which I think is another potential problem with the wealth tax, sure, I think it would be great. I think it does the most direct addressing of the problem. But those are a lot of ifs. And so I think we have to live in the world that we live in and not in a fantasy world where we're able to, in one step curb the enormous power of the wealthiest Americans.

55:12I think it's a real problem that we have, which is we have people who have astronomical amounts of wealth and we want to get it and we want to get it today and we want to address it. But we don't live in a political system where that is going to happen. And I think that we, and my concern is when we focus on that type of thing, we create a false narrative about what's going on. And it makes it seem like, well, we have to punish the rich, when really the problem is that we have to bring the wealthy, their investments and their inheritances into our income tax system. They should join us as fiscal citizens, like everybody who earns money is already doing.

55:55So we mentioned the deficit earlier and this unbelievable national debt that is piling up and up. Huge problem. And it seems as though there's sort of this divide between the left and the right, where the right says that the problem is how much money we spend. I would also add that the right is actually the one that is more responsible for the irresponsible fiscal spending, but that's maybe another conversation. But that's the argument on the right. That's their area of focus. the government's spending too much. Let's get doge and let's make sure that we see less wasteful spending. And then on the left, it's that we're not bringing in, we're not taxing rich people enough.

56:36We're not generating enough tax revenue. And so that's the thing that we got to focus on. My question for you is, what is a bigger problem? Is it the spending or is it the tax revenue? It's the tax revenue, without a doubt. And I think that if you look at the numbers, as I say, from, let's say, 2024. Those are the numbers I have in my book, right? The country took in$5 trillion from all sources, just under$5 trillion. That's income tax, payroll tax, corporate tax, estate and gift taxes, tariffs, everything, right? Fees at the National Park, total revenue just under$5 trillion. We spent$6.8 trillion.

57:18So we had a fall. We had to add to our national debt. We had to borrow to make that$1.8 trillion deficit to cover it, causing huge problems to have this growing debt. Meanwhile, at the same time, the richest 1 % of Americans owned$55 trillion. I say that, and we know that there are all sorts of ways that that wealthiest 1%, not just the billionaires, are able to avoid taxes because they don't pay taxes on their most common sources of income, which is their investment gains and their inheritances. So the failure to bring them into the tax system, I find it hard to believe that we wouldn't have been able to easily cover that$1.8 trillion shortfall by taxing people that owned$55 trillion.

58:09I've looked at some of the numbers in terms of tax revenue as a percentage of GDP. and what I found in the U.S. over the last, I don't know, few decades is that it's actually relatively stable. Like, we've had some dips for sure, but sort of at a very, very broad level, it hasn't really gone down or up in a significant way. And so I guess what you would be asking of our nation is to make a significant change, if the problem is the tax revenue, would be to be making a significant change in terms of how much we are taxed overall. I don't think that's the case at all. I mean, if we're talking about, when you start using a number like the GDP, the GDP is enormous.

58:56So you can't really see the differences, right? I don't think the differences of raising$4.9 trillion and$7 trillion when you're talking about in relation to GDP is going to be a significant difference. So I don't think that that's what we're doing.

59:15Scott Galloway:I think one thing we haven't talked about is what I would describe as the biggest tax cut in history in the U.S. and also the most elegant, and that is neutering the IRS. It's a travesty, and it's a giveaway, and it is, I couldn't agree with you more. What is it,$750 billion a year that goes the tax gap that goes uncollected? I'm sure it's greater than that. So, I mean, we need to fix the tax code and we need to fix the IRS. The next big change in our economy is supposed to be likely to be AI. We're seeing these data centers go up all over the place. We've discussed sort of in general terms about figuring out a way to tax this.

59:54Maybe you tax the data centers. What do you think is the right taxation approach to the next big technology? AI is really going to cause a problem for our tax system, if you think about it. And it's interesting. I was at a program the other day, actually one where Scott got an award, and leadership now. Somebody was speaking, an AI expert was speaking about, well, how AI might very well be disruptive, right? We're going to replace a lot of workers with AI agents. And he said, well, the answer is going to have to be UBI, universal basic income. And I'm thinking, and who's paying for this universal basic income?

1:00:40Because, in fact, when you look at our income tax system, right, 85 percent of the revenue comes from individuals and labor and payroll taxes. And so if we remove workers and we're going to have massive capital growth, we're going to have a lot fewer workers, we're going to really suffer in the amount of revenue that we're raising under our existing system. So I think it's a serious problem. So one thing is that we need to address is by making sure that we are in fact taxing capital because under our current system, we don't tax capital. And that's, of course, where all the gains are occurring.

1:01:21as opposed to taxing companies, I think that we're going to have to figure out how to do it. I don't have the particular answer to it, but we're going to have to find a way of bringing this massive, growing concentrations of wealth into our tax system as well, either under corporate taxes, business taxes, or special AI taxes. The big problem in the political world is getting everyone to agree on this stuff. We can have the right answer, but if we can't get people to agree and get behind it, then it doesn't matter. It doesn't work. So I'd love to get your thoughts on how we do that. What is the message?

1:02:03What is the argument that we can get everyone behind such that we do come up with the right solution and fix the problem? I love your question. Thank you for that. The answer starts with educating the public. As you started your very first question, right, people are being told that the rich people are already paying taxes. And because our tax system is complicated, they think, all right, I guess we're wrong, right? And because individuals are paying such burdensome taxes, it never occurs to them that the rich aren't paying taxes. So the first step has to be educating the public, which is one of the reasons I'm so happy that you guys had me on your show, right?

1:02:39You're already doing that work. You're already spreading the good word, but it's a pleasure for me to be able to join in that. The problem with our system is that we are heavily burdening work income and people who have investments and inheritances, we are giving them a free pass. And the public can understand that. The public is clamoring to understand that. And once they understand that, then they understand that the solution involves making sure that we're taxing investments and inheritances just as we tax labor income. Ray Madoff is a professor at Boston College Law School where she teaches tax law and policy, wills and trusts law and estate planning.

1:03:19She is co-founder and director of the Boston College Law School Forum on Philanthropy and the Public Good, a nonpartisan think tank that explores how the rules governing the charitable sector could best serve the public good. She was named one of Time's 100 Most Influential People in Philanthropy in 2026 for her work critiquing the tax code. And her most recent book, The Second Estate, How the Tax Code Made an American Aristocracy, is available now. Professor Madoff, thank you so much for your time. Thank you so much for having me. I really enjoyed our conversation. We love your work, Professor.

1:03:51Keep it up. Oh, thank you. Have me back on another show, Scott. I've been clamoring. We'd love that. We'd love that. Okay, thanks. Bye-bye. This episode was produced by Claire Miller and Alison Weiss and engineered by Benjamin Spencer. Our video editor is Jorge Carty. Our research team is Dan Chalon, Isabella Kinsel, Chris Nodonoghue, and Mia Silverio. Jake McPherson is our social producer. Drew Burrows is our technical director. And Catherine Dillon is our executive producer. Thank you for listening to Prof G Markets from Prof G Media. If you liked what you heard, give us a follow and join us for a fresh take on markets.

1:04:27on Monday.

1:04:59In love, love, love, love