For years, the phrase buy borrow die has floated through debates about wealth and taxes like a shorthand for the ultimate financial cheat code. The idea seems simple: the rich buy appreciating assets, borrow against their rising value instead of selling, and then pass everything to heirs who inherit without paying capital gains taxes. It’s a story that fits neatly into outrage headlines and dinner-table frustration. But a new analysis of income, capital gains, and borrowing among Americans suggests the reality is far less dramatic — and perhaps more revealing about how wealth actually grows and moves in the U.S.
Revisiting the “Buy Borrow Die” Narrative
The analysis, shared recently by economist researchers and discussed widely online, looked at detailed data on “1% wealth holders” — those at the very top of the financial ladder. It found that roughly 40% of their total income came from unrealized capital gains — increases in asset value that exist only on paper and aren’t taxed until sold. Surprisingly, borrowing accounted for just 1% to 2% of their financial inflows. In other words, the “borrow” part of the strategy, often portrayed as a key way the wealthy live tax-free, plays a much smaller role than many assumed.
This finding matters because it challenges a comfortable narrative. For years, critics of the tax system have argued that the ultra-rich avoid taxes by simply never selling their assets and borrowing to fund lavish lifestyles. It’s an appealing story, one that reinforces a sense of unfairness in economic life. And there is unfairness — but perhaps not in the way we expect. The data suggests that most high-wealth individuals aren’t endlessly refinancing yachts or art collections. They’re just sitting on assets that keep appreciating, untouched and untaxed, because the system allows it.
What Capital Gains Reveal About Wealth
Unrealized capital gains are a strange kind of wealth. They’re real in effect — they make someone richer on paper, increase borrowing power, and affect investment decisions. But they don’t count as income until the asset is sold. That means a billionaire whose tech stock doubles in value owes nothing in taxes until they cash out. For most Americans, that concept feels abstract; our wealth, if we have it, lives in a paycheck or a home value we can’t easily tap.
In practice, this creates a gap between what people earn and what they control. It also helps explain why debates about “taxing the rich” often talk past each other. One side points to untaxed gains as evidence of systemic inequality; the other points to the technicalities of when income is “realized.” Both are right, in a way. The problem is less about individual bad actors and more about the structure of wealth itself — the rules that define when money becomes taxable, and when it’s merely potential.
A Micro-Story from the Ground
Not long ago, a friend of mine — a financial planner in a mid-sized city — told me about a client who had inherited a small portfolio of stocks from her father. She was middle-class, with a teacher’s salary and a mortgage, and suddenly found herself sitting on paper gains worth several hundred thousand dollars. “I don’t feel rich,” she told him. “I can’t spend it without selling.” It’s a modest version of the same dynamic that shapes billionaires’ fortunes: wealth that exists but stays suspended, waiting for the right moment to turn into something tangible.
Borrowing, but Not Like You Think
The small share of borrowing found in the study — just 1% to 2% of the top 1%’s financial flows — doesn’t mean wealthy Americans never use debt strategically. Many do, especially for liquidity or tax timing. But it suggests that the “borrow to live tax-free” caricature is overstated. Most borrowing among high-net-worth individuals is either investment-driven (to leverage new ventures) or temporary, not a lifestyle choice meant to dodge taxes forever.
That said, access to cheap credit remains a privilege. A person with $10 million in appreciated stock can borrow at low interest rates most people could only dream of, using their portfolio as collateral. This asymmetry — not the borrowing itself — may be the real engine of inequality. The wealthy can afford to wait, while others must sell, spend, and pay taxes immediately. It’s not a loophole so much as a structural advantage baked into how financial systems treat risk and collateral.
The Limits of Data and Narrative
Of course, even careful data can’t capture everything. The wealthiest Americans — especially the top 0.01% — are notoriously difficult to study because their finances are complex and often private. The analysis likely captures trends among the “merely rich,” not necessarily the mega-billionaires whose borrowing habits might differ. There’s also a timing issue: borrowing could fluctuate with interest rates, market conditions, or even cultural attitudes toward debt. So while the findings challenge the dominance of “Buy, Borrow, Die,” they don’t entirely close the case.
Still, the takeaway is meaningful. If most of the top 1%’s untaxed wealth comes from unrealized gains rather than constant borrowing, then reform efforts might need to focus on how — and when — those gains are taxed. Proposals like a “mark-to-market” tax, which would tax asset appreciation annually, have surfaced in Washington before but face serious political and administrative hurdles. Implementing them would require rethinking the very definition of income — something the U.S. tax code has avoided for over a century.
What This Says About the Culture of Wealth
There’s a cultural side to all this, too. The “Buy, Borrow, Die” myth persists not just because it’s financially plausible, but because it fits a familiar story about power and evasion. It reflects a broader suspicion that the system is rigged — and in many ways, that suspicion isn’t wrong. But stories like this can flatten complexity, turning structural inequality into a morality play. The truth, as the data suggests, is more mundane and perhaps more frustrating: the rich aren’t necessarily gaming the rules; they just happen to live within rules that quietly favor them.
I’ve noticed that when people talk about tax policy, they often jump between outrage and resignation. “They’ll always find a way around it,” someone says at a café, scrolling past a headline about billionaires’ taxes. Maybe that’s true for a few, but the bigger issue is collective design. The way wealth compounds, and the way taxes treat that compounding, are choices built into the system — not accidents of clever accounting.
Zooming Out: Fairness and the Future
It’s tempting to believe that if we could just close the right loophole, fairness would return. But the data behind the buy borrow die story points to something deeper: inequality isn’t just about avoidance; it’s about accumulation. The mechanics of how we define “income,” and the patience with which wealth can grow untaxed, matter more than any single trick. And those mechanics are slow to change because they benefit those with the most influence.
Still, understanding the real patterns — not the myths — is a start. The more accurately we see how wealth behaves, the better we can design systems that reflect shared values rather than inherited advantages. Maybe the goal isn’t to punish the rich or defend them, but to ask a more basic question: at what point does paper wealth become real enough to share the burden of the world that sustains it?
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