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Hello, everyone. I'm Kimberly Adams. Welcome back to Make Me Smart, where none of us is as smart as all of us.

Tomorrow is tax day. Maybe you filed your taxes weeks ago, or maybe you're scrambling to meet the deadline. If so, good luck. In any case,

your taxes probably look pretty different from, say, a billionaires. In her book, The Second Estate,

how the tax code made an American aristocracy, Boston College Law School professor Ray Madoff argues that there are inequalities baked into the tax code,

and they've created a self-perpetuating wealth gap in the United States.

Ray Madoff is here to make us smart about this. Welcome to the show.

Thank you so much. It's wonderful to be here.

There's this widely held belief that the wealthiest Americans just don't pay their fair share in taxes.

But in your book, you actually explain how and why this happens.

So how is it that the wealthiest Americans manage to pay relatively little in taxes?

Yeah, that's right. The reason is that the wealthy are able to follow

what I call the tax avoidance playbook. So whereas most Americans can't avoid taxes because

they rely on salaries to live on and salaries are subject to quite heavy taxes, right?

Income tax rates as high as 37 percent and payroll taxes on top of that, which are as high

as 15.3 percent. So we have serious taxes on earnings. So the very first step of the tax avoidance

playbook that the very rich do is that they don't

take salaries.

So Warren Buffett famously just takes $100,000 in both salary and bonus.

Jeff Bezos has capped his salary at $82,000, low enough to claim the child tax credit.

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