What is this 'buy, borrow, die' strategy that everyone keeps talking about — and that billionaires like Jeff Bezos deny?

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You mightiness person heard astir a sneaky instrumentality the affluent usage to debar taxes.

The aptly named "buy, borrow, die" strategy was developed by Professor Edward J. McCaffery successful the 1990s to picture however affluent radical get — and enactment — affluent by paying little successful taxes (1).

Despite wide chatter astir the strategy, Jeff Bezos claims it's not a existent strategy.

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"There's nary information to this 'buy, borrow, die' thing," Bezos told CNBC's Andrew Ross Sorkin successful May 2026. "I don't adjacent cognize wherever this comes from" (2).

This strategy has besides travel nether occurrence from Sens. Elizabeth Warren and Ron Wyden, who importune the loophole should beryllium closed.

"America's taxation codification is riddled with loopholes that let the ultra-wealthy to get distant without paying their just share, portion moving families person to play by a antithetic acceptable of rules and wage taxes retired of each paycheck," Wyden said (3).

So what is it and however does it work?

How does buy-borrow-die work?

"Buy, borrow, die" is simply a strategy successful which affluent radical accumulate appreciating assets, get against them and usage the property to wage disconnected the indebtedness aft they die. It works due to the fact that of however taxes are assessed: Not each fiscal determination is simply a taxable event.

Buy a car? Generally, you'll wage taxes. Earn money? Pay taxes. Sell $62 cardinal successful stocks? That's a taxable event. But if you get wealth against those stocks — arsenic Elon Musk did to bargain Twitter successful 2022 — that's debt, not income and it isn't taxed.

In summation to avoiding taxable events, the "buy, borrow, die" strategy besides allows immoderate assets you get against to proceed to appreciate, making you adjacent much money. And portion you'll evidently wage involvement connected the loan, for the uber-wealthy, the mathematics tin inactive enactment retired successful their favor.

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The highest income taxation bracket, for those earning implicit $640,601, is 37% (4) but involvement rates connected loans are typically overmuch lower. In Musk's case, helium would apt person paid superior gains taxation had helium sold his stocks, which are typically taxed astatine astir 20% (5) — inactive higher than astir involvement rates.