Keep pulling the thread on Ray Madoff.
Ray Madoff believes a federal wealth tax would likely be found unconstitutional by the current U.S. Supreme Court.
In 2024, the U.S. federal government had revenues of just under $5 trillion and expenditures of $6.8 trillion, resulting in a deficit of over $1.8 trillion.
The U.S. "tax gap," representing uncollected taxes, is estimated to be $750 billion per year.
The wealthiest individuals fund their lifestyles by taking out loans using their appreciated stock as collateral, a strategy known as "Buy, Borrow, Die."
Ray Madoff proposes that asset appreciation should be taxed when the owner transfers the property, whether by gift or at death, making the transfer a realization event.
Congress has not closed a single loophole in the U.S. estate tax since 1990.
Ray Madoff proposes repealing the estate tax and instead including inheritances, gifts, and life insurance proceeds in the recipient's taxable income.
In a recent year cited as 2025, the top 1% of Americans held $55 trillion in wealth, while the estate and gift tax, with a nominal rate of 40%, raised only $28 billion, representing an effective tax rate of 0.06%.
The average American pays a higher effective tax rate than the 400 wealthiest people in the United States.
Ray Madoff argues that the rise of AI will severely challenge the U.S. tax system, as 85% of revenue currently comes from individual labor and payroll taxes which will decline as workers are replaced.
The United States taxed capital gains at the same rate as ordinary income under the 1986 Tax Act signed by President Ronald Reagan.
Of 16 countries that have proposed a wealth tax, 13 have repealed it.