A tax-avoidance tactic lets billionaires borrow against assets to defer taxes until death, sparking criticism from U.S. senators.
The ‘buy, borrow, die’ strategy allows wealthy individuals to accumulate assets, borrow against them, and defer taxes until death. This method exploits tax rules where borrowing and holding assets are not taxable events, unlike selling or earning income. Critics argue it enables the ultra-rich to avoid paying their share while working families face higher tax burdens.
The tactic, developed by Professor Edward McCaffery in the 1990s, has drawn scrutiny from lawmakers like Sens. Elizabeth Warren and Ron Wyden. They contend the loophole widens inequality and undermines the tax system. Jeff Bezos, however, denied its validity in a 2026 interview, calling it a myth.
Proponents of closing the loophole say reforms could generate revenue by ensuring the wealthy pay taxes on unrealized gains. The debate highlights broader tensions over tax policy and wealth distribution in the U.S.