Elite debt hits record heights

How the rich get free money and don’t pay taxes on it.

Cory Doctorow
4 min readAug 3, 2021


The Wall Street ‘Charging Bull’ sculpture; the cobblestones beneath his feet have been replaced by ranks of gold bullion, and a French revolutionary engraving of a guillotine beheading a bourgeois stands by his front foot. Image: Sam Valadi (modified) https://www.flickr.com/photos/132084522@N05/17086570218 CC BY: https://creativecommons.org/licenses/by/2.0/

This summer started with a bang, with Propublica’s #ecret IRS Files leaks — a massive data-set detailing the tax-evasion strategies of the rich, confirming F Scott Fitzgerald’s maxim that “they are different from you and me” (We pay tax. They don’t).


When you are very rich, you can borrow money at interest rates that are next to zero; you can also take your income in stock, rather than cash. Stock is only taxed when you sell it, and then at the lower capital gains rate, because the IRS rewards gambling and punishes work.

Put those two facts together, and you’ve got wealthy people who effectively never “earn” any taxable income — instead, they stake their assets as collateral on tax-free loans at sub-1% interest.

The Propublica stories even reveal wealthy people illegally taking deductions on the loan interest, which the IRS doesn’t seem to punish. Why would they? The rich are different from you and me. We pay tax. They don’t.

If you live in a $70k household, your federal tax bill is about 14%. If you’re Michael Bloomberg, your IRS bill on 2019’s $2b in income is 1.3%.


Propublica’s series has continued, naming and shaming ultra-wealthy people who take Helmsley’s Law (“only little people pay taxes”) to heart. But they’re being (appropriately) cautious, so we’re really only getting a limited view of things — the big picture is still obscure.

Writing in Counter Punch, Sam Pizzigati delves into elite debt on a macro scale, noting that the total loaned out by banks’ “wealth management” divisions has hit $600b for 2021–17.5% higher than last year.


That accounts for 22.5% of the banks’ total loan book — up from 16.3% in 2017. Jpmorgan and Citi are loaning more money to a handful of super-wealthy people than they are…