Tax season hits differently depending on who you ask. For most of us, it’s a dreaded weekend spent hunched over a laptop, squinting at W-2s and wondering if that $40 home office chair is actually deductible. But for the ultra-wealthy, taxes aren't a static obligation. They’re a puzzle. If you’ve been following the coverage on how billionaires manage to avoid as one’s taxes NYT style, you know the narrative usually involves complex loopholes, offshore accounts, and the kind of high-level accounting that costs more per hour than most people make in a month.
It's not just about "evasion." Evasion is illegal. We’re talking about avoidance—the art of using the law exactly as it’s written to pay as little as possible.
Honestly, the gap between what the average worker pays and what a hedge fund manager pays can feel like a punch in the gut. While the plumber or the teacher sees a chunk of their paycheck vanish before it even hits their bank account, the elite are playing a different game entirely. They aren't living on "income" in the way we define it. They’re living on wealth. There is a massive, structural difference between a salary and an asset.
The Buy, Borrow, Die Framework
You’ve probably heard some version of this. It’s the open secret of the 0.1%. When the New York Times or ProPublica leaks tax data, this is the engine driving those low effective rates.
Here is how it works in the real world. Imagine you own $100 million in stock. If you sell that stock to buy a yacht, you trigger a capital gains tax. That’s a "realization event." The IRS wants its cut immediately. But what if you don't sell? What if, instead, you go to a bank like Goldman Sachs or JPMorgan and say, "Hey, I have $100 million in Apple stock. Give me a $10 million loan at a 3% interest rate using that stock as collateral."
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The bank says yes.
Now you have $10 million in cash. The kicker? Loans aren't taxable income. You’re spending millions of dollars, living a lavish lifestyle, and on paper, your "income" is zero. In fact, you might even be able to deduct the interest on that loan if you use the money for further investments. You’ve successfully managed to avoid as one’s taxes NYT journalists often highlight by simply never "realizing" your gains. You just keep borrowing against your growing portfolio until you pass away. At that point, your heirs get a "step-up in basis," meaning the capital gains tax clock resets to zero. The profit from your entire life basically evaporates in the eyes of the IRS.
Why the System Is Built This Way
It’s easy to get angry at the individuals, but the system is working exactly as intended. Tax laws are often designed to incentivise specific behaviors. The government wants people to invest in businesses. They want people to develop real estate. They want people to keep their money in the market rather than stuffing it under a mattress.
Because of this, "labor" is taxed at a much higher rate than "capital." If you work for a living, your top federal rate could be 37%. If your money works for you, the top long-term capital gains rate is usually capped at 20%. That 17% spread is where the magic happens.
Think about the "carried interest" loophole. It’s a classic example often cited when people discuss how private equity moguls avoid as one’s taxes NYT reporters have scrutinized for years. Instead of being paid a salary for managing a fund, these managers take a share of the profits. Because that share is classified as an investment gain rather than a fee for service, it’s taxed at the lower rate. It’s a semantic distinction worth billions of dollars.
Real Estate: The Ultimate Tax Shelter
Real estate isn't just about owning a house; it’s a giant tax-avoidance machine. If you’re a professional real estate investor, the IRS treats you like royalty.
- Depreciation: This is the big one. The law assumes that buildings "wear out" over time. Even if your apartment building in Brooklyn is actually increasing in value every year, you get to write off a portion of its value as a "loss" on your taxes. This paper loss can often cancel out the actual cash profit you’re making from rent.
- The 1031 Exchange: This allows an investor to sell a property and reinvest the proceeds into a new one without paying any capital gains tax. You can "swap" your way up from a duplex to a skyscraper over forty years and never pay a dime in taxes on the appreciation until you finally cash out—if you ever do.
It’s a cycle of growth that’s shielded from the friction of taxation. For the person working a 9-to-5, every time they move up the ladder, they pay more. For the real estate mogul, every move up the ladder is an opportunity to defer.
The Myth of the "Flat Tax" and Other Arguments
Some argue that the current system is too complex and that we should just have a flat tax. Others say we need a wealth tax—taxing the $100 million in stock even if it isn't sold. Senator Elizabeth Warren and others have championed this, but it faces massive legal and practical hurdles. How do you value a private company every year? What happens if the market crashes—does the government give the billionaire a refund check?
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Then there’s the "Qualified Small Business Stock" (QSBS) exclusion. This is a massive perk for tech founders. Under Section 1202, if you start a company and hold your stock for five years, you might be able to exclude up to $10 million (or more) of your gains from federal taxes entirely. It’s meant to encourage startups, but it also creates a massive windfall for early employees and founders in Silicon Valley.
Beyond the 1%: What Can You Actually Do?
Most of us aren't borrowing $10 million against a stock portfolio. But that doesn't mean you can't use some of these same principles. The goal is to move as much of your life as possible from the "highly taxed" bucket to the "low or no tax" bucket.
- Max Out the Tax-Advantaged Buckets: If you aren't hitting the limit on your 401(k) or 403(b), you’re leaving money on the table. This is the most basic way to avoid as one’s taxes NYT experts suggest for the middle class. It lowers your taxable income today.
- Health Savings Accounts (HSAs): These are the only "triple-tax-advantaged" accounts in existence. The money goes in tax-free, grows tax-free, and comes out tax-free if used for medical expenses. After age 65, it basically turns into a traditional IRA. It’s a powerhouse.
- Tax-Loss Harvesting: If you have investments that have lost value, sell them. You can use those losses to offset gains you’ve made elsewhere. You can even use up to $3,000 of those losses to offset your regular salary income.
- The "Backdoor" Roth IRA: If you make too much money to contribute to a Roth IRA directly, you can contribute to a traditional IRA and then immediately convert it. It’s a perfectly legal maneuver that allows high-earners to get their money into a tax-free growth vehicle.
The Shifting Landscape of 2026
Tax laws are never permanent. The Tax Cuts and Jobs Act (TCJA) of 2017 brought major changes, but many of its provisions—especially those affecting individuals—are set to expire or change. We are seeing a global push for a minimum corporate tax rate to prevent companies from shifting profits to tax havens like Ireland or the Cayman Islands.
The IRS is also getting a massive tech upgrade. They are hiring more specialized auditors to look at "complex partnerships." This means the days of hiding behind twenty layers of LLCs without any oversight might be coming to an end.
But as long as there is a distinction between "earned income" and "wealth," the strategies to avoid as one’s taxes NYT style will persist. It’s a game of cat and mouse where the mouse has a fleet of specialized lawyers.
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Actionable Steps to Optimize Your Tax Situation
To actually change your tax trajectory, you need to stop thinking about April 15th and start thinking about the whole year.
- Review your withholdings now. Don't give the government a 0% interest loan by overpaying throughout the year. If you usually get a $5,000 refund, adjust your W-4 so that money stays in your paycheck and goes into an interest-bearing account instead.
- Audit your "Lifestyle Deductions." If you have a side hustle or freelance work, are you tracking every mile, every subscription, and every piece of equipment? Most people miss thousands in legitimate business expenses because they don't keep a clean log.
- Consult a Pro, but not just any Pro. A tax preparer just puts numbers in boxes. A tax strategist looks at your life and tells you how to structure your assets. If your net worth is growing, the fee for a strategist will pay for itself ten times over.
- Understand your "Effective" vs "Marginal" rate. Don't freak out if you hit a higher tax bracket. Only the money in that bracket is taxed at the higher rate. Knowing this helps you make better decisions about taking bonuses or selling stock.
The wealthy don't view taxes as a "bill" they receive; they view them as a controllable expense. The more you move toward that mindset, the better off you'll be.