Patriotic Millionaires Minute

The 50-Year Experiment

20-minute-mission — Wed, 30 Sep 2026 15:10:49 +0000

For about fifty years, we've been running an economic experiment: cut taxes on the wealthy, and the benefits will trickle down to everyone else. That theory has dominated Washington since 1981.

Did it work?

Researchers at the London School of Economics studied fifty years of tax cuts across eighteen wealthy countries. They found one reliable result: the rich got richer. Inequality went up. Growth and unemployment — no measurable effect at all.

Here at home, incomes grew together across every class from 1947 to 1974. Since then, the top one percent's share has more than doubled while the bottom ninety percent's has fallen. The RAND Corporation puts the cumulative transfer at nearly eighty trillion dollars.

Here's the part that stuck with me. The same researchers asked why Americans support these policies — and found most people simply don't know how far taxes on the rich have fallen. When you tell them, support drops. That effect was strongest among Republicans.

The experiment is over. The results are in. It didn't trickle down. It was siphoned up.

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The eighteen-country study. David Hope (London School of Economics) and Julian Limberg (King's College London), "The Economic Consequences of Major Tax Cuts for the Rich," published in Socio-Economic Review, Volume 20, Issue 2 (April 2022), pages 539-559, after circulating as an LSE International Inequalities Institute working paper in December 2020.

The authors built a new indicator of taxes on the rich — one that captures changes to the tax base, not just statutory rates — and used it to identify every instance of major tax reduction on the rich across 18 OECD democracies between 1965 and 2015. Their finding: "major tax cuts for the rich increase the top 1% share of pre-tax national income in the years following the reform. The magnitude of the effect is sizeable; on average, each major reform leads to a rise in top 1% share of pre-tax national income of over 0.7 percentage points." And: "such reforms do not have any significant effect on economic growth or unemployment. Our results therefore provide strong evidence against the influential political-economic idea that tax cuts for the rich 'trickle down' to boost the wider economy."

The study also documents the scale of the shift itself: from the late 1960s to the end of the 1990s, the average value of the taxing-the-rich indicator across the sample fell by more than 30%. (Socio-Economic Review; LSE working paper, full text; LSE summary; CBS News)

The follow-up study, and the script's close. Hope and Limberg subsequently investigated why ordinary Americans support tax cuts for the rich. Hope, summarizing: "The average citizen seems to be fairly poorly informed that taxes on the rich have fallen really dramatically in the past 40 years. If you give them that information, it makes them less likely to support tax cuts for the rich. And these effects, we've found, are particularly strong for Republican voters."

This is the basis for the script's fourth paragraph. It is worth keeping for two reasons: it reframes the disagreement as an information gap rather than a values gap, and the Republican-voter finding is a meaningful signal for a show that could otherwise be dismissed as partisan. (LSE Research)

The RAND figure — updated. The original Carter C. Price and Kathryn Edwards working paper (RAND, September 2020) calculated that $47 trillion had been transferred from the bottom 90% to the top 1% between 1975 and 2018, a figure widely rounded to $50 trillion. In 2018 alone the gap was $2.5 trillion — roughly 12% of GDP, or about $1,144 a month for every worker in the bottom nine deciles.

RAND has since updated the analysis through 2023, and the cumulative figure is now $79 trillion — nearly $80 trillion — with $3.9 trillion transferred in 2023 alone. The script previously used the older $50 trillion number and was corrected in August 2026. Related finding: average real income in the top 1% grew 321.6% from 1975 through 2018, nearly three times the 118% growth in real per capita GDP over the same period. (TIME, on the original study; Democracy Journal; Forbes; RAND update via Sen. Sanders' office summary)

The 1947-1974 baseline. Price and Edwards use 1945-1974 as the comparison period, during which income growth was broadly shared across the distribution. The script's "1947 to 1974" is within that window. The counterfactual the study models is simply that those distributions had held steady rather than diverging after 1975.

Why 1981. The script dates the theory's dominance in Washington to 1981 — the Economic Recovery Tax Act, which cut the top marginal rate from 70% to 50%. See also CM-79 ("One Direction") for the full rate timeline and CM-80 ("The Napkin") for the Laffer curve, which is the intellectual argument this script is testing empirically.

The counterargument. Defenders of these policies argue the studies suffer from attribution problems: the period since 1975 also saw globalization, automation, the decline of unionization, and the entry of China into world markets, any of which could account for the divergence independent of tax policy. Hope and Limberg's design addresses this by comparing countries that enacted major cuts against those that didn't in the same years — a difference-in-differences approach — which is why the paper carries more weight than a simple before-and-after of U.S. data. Critics also note that the top 1% share of pre-tax income rising is not the same as everyone else becoming worse off in absolute terms; real median incomes did grow over the period, if slowly. The RAND counterfactual measures the gap against what broadly-shared growth would have produced, not against a decline.

Related PM scripts: Who Actually Pays, Two Tax Codes, Corporate Welfare, The Minimum Wage. Related Civic Minute segments: One Direction, The Napkin, The Ledger, The Burden by the Numbers.

Millionaires Won't Leave

20-minute-mission — Wed, 30 Sep 2026 15:10:47 +0000

Every time someone proposes taxing the wealthy, you hear the same warning: they'll leave.

Massachusetts tested it. In 2022, voters passed a four percent surtax on income over a million dollars. The owner of the Patriots funded the opposition and predicted an exodus.

Three years later, the state's millionaire population is up thirty-nine percent. Its billionaire count went from seven to nine. The surtax raised two point two billion dollars in its first full year, against a projection of one billion. And Massachusetts gained population the year it took effect, after losing population the year before.

That fits the research. Cornell sociologist Cristóbal Young studied thirteen years of tax returns covering every million-dollar filer in America. Millionaires move between states at two point four percent a year. People earning ten thousand dollars move at four point five.

The wealthy are among the least mobile people in the country. Their businesses are there. Their families are there. Their networks are there.

"They'll leave" isn't a prediction. It's a negotiating position.

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The Massachusetts Fair Share Amendment. Approved by voters in November 2022, the amendment imposed a 4% surtax on annual taxable income above $1 million, on top of the state's 5% flat income tax. It took effect January 1, 2023. Revenue is constitutionally earmarked for education and transportation.

The opposition campaign was led by Patriots owner Robert Kraft, New Balance's Jim Davis, and Boston investment firm CrossHarbor Capital Partners, and argued the measure would trigger tax flight and fail to address the state's fiscal needs.

Results through the three-year mark (November 2025):

Revenue: $2.2 billion in the first full year, against a projection of roughly $1 billion.
Millionaire population up 38.6% in the two years following passage (Institute for Policy Studies, 2025).
Massachusetts billionaires on the Forbes 400 rose from 7 to 9 between 2022 and 2025.
State population grew in 2023, the first year the surtax was in effect, after declining in 2022.

(Rhode Island Current / EPI policy brief; Baltimore Sun citing IPS; People's Policy Project, three-year assessment)

The migration research. Cristóbal Young — now Professor of Economic Sociology at Cornell, previously at Stanford, where this work was conducted — analyzed administrative IRS data covering every million-dollar income filer in the United States over 13 years: roughly 45 million tax returns from 3.7 million individuals, 1999 through 2011. The findings:

Roughly 500,000 people file million-dollar returns in a given year; about 12,000 change states annually — a 2.4% migration rate.
The general population moves at 2.9%.
Filers earning around $10,000 a year move at 4.5% — nearly double the millionaire rate.

Young: "The most striking finding in our study is how little elites seem willing to move to exploit tax advantages across state lines. Millionaire tax flight is occurring, but only at the margins of significance."

His explanation is the "embedded elites" thesis: wealth accumulation is rooted in place and in insider advantage, and during peak earning years the wealthy are tied down by business ownership, professional networks, family, and community. The young and the low-income are far more mobile — partly because those with less have less holding them anywhere, and partly because the affluent can absorb a tax increase out of savings rather than restructuring their lives around it.

Published as The Myth of Millionaire Tax Flight (Stanford University Press, 2018). Follow-up work with Ithai Lurie, "Taxing the Rich: How Incentives and Embeddedness Shape Millionaire Tax Flight," appeared in the American Journal of Sociology in 2025. (ASA summary; Young's research page; EurekAlert)

Washington State. Washington's capital gains tax took effect in 2022 at 7%, with an increase to 9.9% announced for 2025. Between 2022 and 2024, the state's millionaire population grew from 463,000 to more than 681,000 (IPS). Not used in the current script, but available as a second example.

Cut from an earlier draft: "Only three-tenths of one percent moved to a lower-tax state." This figure could not be verified in any published summary of Young's work and was removed during fact-checking. If it exists it is likely in the book itself; do not restore it without a page citation.

On scope — what this evidence does and does not cover. All of the above concerns income taxes on millionaires. It is strong evidence about surtaxes structured like the Massachusetts one — an ongoing levy on annual income above a threshold, which a taxpayer can only escape by permanently relocating.

It is weaker evidence about wealth taxes on billionaires, which differ on three axes: the base is accumulated net worth rather than annual income, the population is far smaller and differently situated, and a one-time assessment can potentially be avoided by a single well-timed move rather than a permanent relocation. California's Proposition 40 — a one-time 5% tax on the net worth of the state's roughly 200 billionaires, on the November 3, 2026 ballot — is the live example, and the Tax Foundation argues its residency provisions are "exceptionally vulnerable," such that billionaires departing during 2026 "have good reason to believe they can escape some or all of the tax."

An earlier draft of this script opened on Proposition 40. That framing was cut because it invites listeners to transfer the Massachusetts evidence to a materially different instrument. If a news hook is ever wanted, the better one is a proposed income surtax — New York City's proposed 2% surtax on incomes above $1 million is structurally analogous to Massachusetts, and Young has been cited throughout that debate — but verify the proposal's current status before airing. (Tax Foundation on Prop 40; Ballotpedia)

The counterargument. Critics note that Massachusetts' strong results coincided with a broad national run-up in asset values, which inflates millionaire counts everywhere and is not attributable to state tax policy. They also point out that migration data captures those who move but not those who never arrive — a business that chooses to incorporate elsewhere does not appear in exodus statistics. And a handful of high-profile departures (Ken Fisher's move from California, for instance) generate coverage disproportionate to their aggregate significance, which is itself part of why the perception persists. Young's response is that the border-discontinuity analysis — comparing millionaire density on either side of state lines with sharply different top rates — controls for national trends, and finds the same limited effect.

Related PM scripts: Who Actually Pays, Two Tax Codes, The 50-Year Experiment, The "Death Tax." Related Civic Minute segments: The Burden by the Numbers, The One Percent Is the Wrong Number.

Buy, Borrow, Die

20-minute-mission — Wed, 30 Sep 2026 15:10:41 +0000

There's a three-word strategy that explains how billionaires avoid taxes. It's called buy, borrow, die.

Buy: you put your money into assets — stocks, real estate, businesses. They grow in value, but you never sell. If you don't sell, you don't owe income tax. Your wealth can grow by billions and the IRS gets nothing.

Borrow: Need cash? Don't sell — that would trigger a tax bill. Instead, borrow against your assets. Banks will lend you millions at low interest when you've got a billion in collateral. And borrowed money isn't taxed.

Die: When you pass away, all those gains you never paid taxes on disappear, thanks to something called the stepped-up basis. Your heirs inherit everything at today's value, tax-free. And the cycle starts over.

ProPublica found that Jeff Bezos paid zero federal income tax in 2007 and 2011. Elon Musk paid zero in 2018. Not because they broke the law — because the law was written this way.

President Biden proposed closing this loophole. Even with his own party in control of Congress, it couldn't get done. You pay taxes on every paycheck. They found a way to never get one — and nobody in Washington has been willing to change it.

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What is buy, borrow, die? The strategy was described by tax law professor Edward McCaffery and popularized by ProPublica's 2021 investigation "The Secret IRS Files." Wealthy individuals accumulate assets (buy), borrow against them to fund their lifestyles without triggering taxable events (borrow), and upon death, the stepped-up basis provision (IRC Section 1014) resets the cost basis to current market value, eliminating all unrealized capital gains (die). The cycle then repeats for the next generation. (ProPublica, June 8, 2021; CBPP)

The ProPublica IRS Files. ProPublica obtained IRS data covering thousands of the nation's wealthiest people over more than 15 years. Key findings: Jeff Bezos paid zero federal income tax in 2007 and 2011. Elon Musk paid zero in 2018. Michael Bloomberg paid zero in multiple recent years. George Soros paid zero three years in a row. The 25 richest Americans saw their wealth rise $401 billion from 2014-2018 but paid a combined effective tax rate of just 3.4%. (ProPublica; Boston Globe; Snopes)

Borrowing against wealth. ProPublica reported that Musk pledged approximately 92 million Tesla shares as collateral for personal loans. Oracle CEO Larry Ellison had a $10 billion credit line secured by Oracle stock. Because borrowed money is not income, these loans generate no tax liability — even though they function exactly like income for the borrower. (ProPublica; CBPP)

The stepped-up basis loophole. IRC Section 1014 resets the cost basis of inherited assets to fair market value at the time of death. All unrealized capital gains accumulated during the original owner's lifetime are permanently eliminated. The provision was drafted in 1927 by Treasury Secretary Andrew Mellon — the son of one of the wealthiest families of the era — who "loathed the inheritance tax." (NBC News; Americans for Tax Fairness)

Biden's proposal to close the loophole. In April 2021, President Biden's American Families Plan proposed eliminating stepped-up basis for gains over $1 million ($2 million for couples), combined with raising the capital gains rate from 20% to 39.6%. The plan included exemptions for family farms and businesses where heirs continued operating them. Despite Democratic control of the House, Senate (50-50 + VP), and White House, the proposal was dropped during Build Back Better negotiations. The Inflation Reduction Act (August 2022) did not include it. The STEP Act (Sensible Taxation and Equity Promotion Act), a standalone Senate bill, also never advanced. (White & Williams; Center for Rural Affairs; Georgetown Law)

A Patriotic Millionaire's perspective. Eric Schoenberg, a member of the Patriotic Millionaires, told NBC News that he inherited more than $10 million in the 1990s from his grandparents' shares of a family tech company. He supports eliminating the stepped-up basis: "I did nothing to earn this money... the least I can do is pay taxes on it." (NBC News)

Related PM scripts: The Stepped-Up Basis (PM Script 5) covers the "die" step in more detail. Who Actually Pays (PM Script 10) covers the broader tax rate inversion.

Corporate Welfare

20-minute-mission — Sat, 15 Aug 2026 14:38:40 +0000

When politicians talk about welfare, they usually mean programs for people who are struggling — food stamps, Medicaid, that kind of thing. But why do so many people need those programs when they already have jobs?

A Government Accountability Office study found that millions of full-time workers at some of America’s largest and most profitable corporations earn so little that they qualify for food stamps and Medicaid. Walmart topped the list in every state studied, with McDonald’s right behind them. Seventy percent of the people on these programs work full time.

Think about what that means. These companies are posting billions in quarterly profits, paying their CEOs tens of millions of dollars — and you, the taxpayer, are picking up the tab for their workers’ groceries and healthcare. That’s not a safety net for workers. That’s a subsidy for corporations.

When a company pays poverty wages, it doesn’t save the economy money. It just shifts the cost from their payroll to your tax bill.

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The GAO study. In November 2020, the Government Accountability Office published a report (GAO-21-45) examining Medicaid and SNAP enrollment among workers at large employers. Drawing on data from 15 agencies across 11 states, the study found that 12 million wage-earning adults (ages 19-64) were enrolled in Medicaid and 9 million were in SNAP households. Approximately 70% of adult wage earners in both programs worked full-time hours (35+ hours/week). 90% worked in the private sector, concentrated in restaurants, department stores, and grocery chains. (GAO-21-45; GAO-21-410T (testimony))

Walmart and McDonald’s. Analysis of the GAO data by Sen. Bernie Sanders’ office found Walmart was one of the top four employers of SNAP and Medicaid beneficiaries in every state that provided data. Across nine states, Walmart had approximately 14,500 employees on SNAP and 10,350 on Medicaid. McDonald’s was in the top five employers in at least nine states, with 8,780 on SNAP and 4,600 on Medicaid. (Washington Post; Sanders.senate.gov)

The scale of the subsidy. The Union of Concerned Scientists estimated that in Arkansas alone, food system employers benefited from more than $21 million per year in indirect subsidies through SNAP benefits compensating for low wages. One in ten U.S. workers lives in a household that receives SNAP. (Union of Concerned Scientists)

CEO pay context. In 2023, Walmart CEO Doug McMillon received total compensation of approximately $25.3 million. The median Walmart employee earned approximately $27,642 — a ratio of 916:1. McDonald’s CEO Chris Kempczinski received approximately $17.8 million. The Economic Policy Institute found that CEO-to-typical-worker compensation ratios across major firms averaged 344:1 in 2022, up from 21:1 in 1965. (EPI)

The "corporate welfare" framing. The term reframes public assistance not as a benefit to workers but as a subsidy to employers who pay below a living wage. If these companies paid wages sufficient to keep their workers off public assistance, taxpayers wouldn’t need to fill the gap. Sen. Sanders called it "morally obscene" that "U.S. taxpayers should be forced to subsidize some of the largest and most profitable corporations in America." (Sanders.senate.gov)

Related PM scripts: The Minimum Wage, The 50-Year Experiment, What Happens When You Invest in People

The "Death Tax"

20-minute-mission — Sat, 15 Aug 2026 14:38:32 +0000

You’ve probably heard politicians rail against the "death tax" — the idea that when you die, the government swoops in and takes your family’s money. It sounds terrifying. It’s also almost entirely made up.

The reality is that the federal estate tax only kicks in on the portion of an estate that exceeds fifteen million dollars — that’s thirty million for a married couple. This means 99.93 percent of Americans will never owe a single penny. This is not a tax on regular people. It is a tax on dynastic wealth.

But what about family farms? You hear that one a lot. In 2022, according to the USDA, a grand total of eighty-seven farm estates in the entire country owed any federal estate tax. And even those families can spread their payments over fifteen years at low interest rates.

The family farm argument isn’t a policy concern — it’s a talking point designed to protect billionaire heirs. The estate tax raises real revenue and is the only thing standing between us and a permanent aristocracy. Calling it the "death tax" was one of the most successful branding campaigns in political history. Don’t fall for it.

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The current exemption: $15 million. The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, permanently set the federal estate tax exemption at $15 million per individual ($30 million for married couples using portability), effective January 1, 2026. The exemption is indexed for inflation beginning in 2027. The 40% federal estate tax rate applies only to amounts exceeding the exemption. The OBBBA made this permanent — there is no sunset provision. (Tax Foundation; Arnold & Porter; Charles Schwab)

99.93% of Americans will never owe it. Under the TCJA’s ~$13M exemption, the Tax Policy Center estimated that only about 0.07% of estates owed any federal estate tax — approximately 4,100 estates per year. With the higher $15M exemption under OBBBA, even fewer estates will be subject to the tax. The 99.93% figure is conservative. (Tax Policy Center; CBPP)

87 farm estates. In 2022, according to USDA data analyzed by the Economic Research Service, a total of 87 farm estates in the entire United States owed any federal estate tax. These estates can elect to spread payments over 15 years at favorable interest rates under IRC Section 6166. The "family farm" argument has been a central talking point against the estate tax for decades, despite affecting fewer than 100 farms per year. Under the $15M OBBBA exemption, even fewer farm estates will owe tax. (USDA ERS; Americans for Tax Fairness)

The "death tax" branding. Republican strategist Frank Luntz recommended in the 1990s that Republicans stop calling it the "estate tax" and start calling it the "death tax" to build public opposition. The strategy was explicitly described in his memo "Language of the 21st Century": "It’s the Death Tax, not the Estate Tax or the Inheritance Tax, because the public perceives the ‘Estate Tax’ as a tax on the wealthy." The rebranding was enormously successful — polling consistently shows that opposition to the "death tax" is 10-15 points higher than opposition to the "estate tax," even though they’re the same tax. (NPR; Politico)

What the estate tax actually raises. The estate tax generates approximately $20-25 billion per year in federal revenue. With the OBBBA’s higher exemption, revenue may decrease. The tax functions as the primary check on dynastic wealth accumulation — without it, the wealthiest families can compound inherited wealth across generations with no tax event at all (especially combined with the stepped-up basis provision, which eliminates capital gains at death).

Related PM scripts: Buy, Borrow, Die (the stepped-up basis is the "die" step), The Stepped-Up Basis (detailed explanation), The 50-Year Experiment (broader inequality context)

The Tax Code's Color Line

20-minute-mission — Sat, 15 Aug 2026 14:37:51 +0000

The median white family in America has a net worth of about $285,000. For Hispanic families, it’s $62,000. For Black families, $45,000. That gap wasn’t an accident — it was built by centuries of policy decisions on property, lending, and who got access to what.

The tax code widens it. Not by targeting anyone, but by taxing wealth at a much lower rate than work. If your income comes from stocks and investments, the top rate is 20 percent. If it comes from a paycheck, you can pay nearly double that. The U.S. Treasury found that 92 percent of the benefits from those lower capital gains rates go to white families.

So the families who already have the most wealth get the best tax rates. And the families who depend on wages — disproportionately Black and Hispanic — pay more on every dollar they earn. The tax code doesn’t mention race. It doesn’t have to. It just rewards what you already have.

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The racial wealth gap. The Federal Reserve’s 2022 Survey of Consumer Finances found median net worth of $285,000 for white families, $61,600 for Hispanic families, and $44,900 for Black families. The typical white household had about six times the wealth of the typical Black household and five times that of the typical Hispanic household. While Black wealth grew 61% and Hispanic wealth grew 47% between 2019 and 2022, the dollar gap actually widened by ~$50,000 during the same period. (Federal Reserve; CNN; Brookings)

How the gap was built. The wealth gap is the cumulative result of centuries of discriminatory policy: slavery, Jim Crow, redlining (FHA explicitly refused to insure mortgages in Black neighborhoods from the 1930s-1960s), blockbusting, discriminatory GI Bill implementation, exclusion from Social Security and minimum wage protections for domestic and agricultural workers (disproportionately Black), and ongoing disparities in lending, hiring, and education funding. (Brookings; NEA)

The capital gains tax break and race. The U.S. Treasury’s Office of Tax Analysis (Working Paper 122, January 2023) found that white families — 67% of all families — receive 92% of the benefits from preferential tax rates on long-term capital gains and qualified dividends. Only 2% goes to Black families and 3% to Hispanic families. The average family benefit from preferential capital gains rates is nine times higher for white families than Black families and eight times higher than Hispanic families. The total cost of this tax expenditure: $146 billion in 2023, of which $135 billion went to white families. (Treasury OTA Working Paper 122; Treasury FY2025 Budget; Urban Institute; ITEP)

Two tax rates for two kinds of income. Long-term capital gains and qualified dividends are taxed at a maximum of 20% (plus 3.8% net investment income tax for high earners). Ordinary income from wages is taxed at rates up to 37% (plus payroll taxes). This means income from wealth is taxed at roughly half the rate of income from work. Because white families hold a much larger share of financial assets (stocks, bonds, business interests), they benefit disproportionately from this lower rate. Capital gains comprised nearly 8% of white families’ income but less than 1% for Black and Hispanic families. (Tax Policy Center; CBO)

The class mechanism with racial consequences. The script’s reframe is important: the tax code doesn’t target Black families. It targets workers. But because of centuries of policy that determined who got to accumulate wealth, a tax code that favors wealth over work hits Black and Hispanic families hardest. The racial impact is real, but it’s downstream of the class mechanism. As ITEP notes: "99 percent of Americans of all races receive little or nothing from the lower rate for capital gains and dividends." The benefits flow overwhelmingly to the richest 1% — who are overwhelmingly white. (ITEP)

Related PM scripts: Who Actually Pays (PM Script 10), Two Tax Codes (PM Script 11), The Stepped-Up Basis (PM Script 5), Buy Borrow Die