Money Talks: How Our Tax Code Makes the Rich Richer

Summary

Slate Money: Money Talks – How Our Tax Code Makes the Rich Richer

Date: October 28, 2025
Host: Felix Salmon (Bloomberg), Co-host Emily Peck (Axios)
Guest: Ray Madoff, author and law professor at Boston College
Episode Theme: Explaining how the U.S. tax code has been reshaped over the last century to advantage the ultra-wealthy, rendering systems like the estate tax ineffective and preserving dynastic wealth.

---

Episode Overview

This episode explores the central thesis of Ray Madoff’s book, "The Second Estate: How the Tax Code Made an American Aristocracy." The discussion unpacks how both income and estate taxes were once effective tools for curbing inherited wealth and ensuring the rich paid their fair share—but now, loopholes and policy drift have left the tax burden squarely on middle-class and working Americans. Felix Salmon and Emily Peck probe Ray Madoff’s insights about the historical trajectory of U.S. taxation, why today’s rich can lawfully avoid taxes, and what structural reforms might restore equity.

---

Key Discussion Points and Insights

1. The Disappearing Tax Burden on the Rich

• Historical effectiveness: From the 1910s through the 1970s, the U.S. tax code (income and estate tax combined) meaningfully taxed the very wealthy to fund government and limit dynastic wealth.
  • Ray Madoff: “Together, the estate and the income tax did a pretty good job from when they were enacted in 1913 and 1916... pretty much right up through the ‘70s.” (05:00)
• Gradual erosion: After 1990, Congress ceased to update the tax code to close new loopholes. The rich, aided by estate planners and supportive politicians, found ever more ways to shelter and pass down wealth tax-free.
  • “Since 1990, Congress... engaged in quiet quitting on keeping up the estate tax. And the effect... was that on its own, the estate tax crumbled as estate planners did their jobs, finding more and more loopholes.” – Ray Madoff (17:26)
• Current impact: The estate tax now raises only a fraction of a percent of federal revenue.

---

2. The Rebranding and Political Attack on the Estate Tax

• Frank Luntz’s messaging: In the 1990s, top wealthy families worked with strategist Frank Luntz to rebrand the "estate tax" as the "death tax," swinging public perception and political will against it.
  • “If you call it the estate tax, everyone thinks it’s fair... But instead... let’s call it the death tax. And by calling it the death tax, we are going to make everybody think that they are subject to it. That just as death comes for everyone, so too does the tax man.” – Ray Madoff (13:03)
• Policy consequences: The change in rhetoric led to sweeping reductions in the estate tax; exemptions rose, rates fell, and by 2010 the tax was temporarily repealed.
• Bipartisan drift: Both Democrats and Republicans lost the will to maintain or defend the estate tax, succumbing to the myth of "double taxation" and popular resistance.
  • “There is no such concept of double tax, right?... But I think the reason this double tax argument was so effective was because in the estate tax realm... the tax is nominally imposed on the decedent.” – Ray Madoff (20:32)

---

3. Loopholes and Legal Tax Avoidance: The Playbook of the Ultra-Rich

• How the rich structure their finances:
  • Take little or no salary—thus avoiding high income and payroll taxes (03:12, 33:13).
  • Build wealth as unrealized capital gains, taxed at a lower rate (and often, not at all).
    • “Capital gains are taxed at a maximum rate of 20%... Andrew Mellon... thought that it should be the other way around.” – Ray Madoff (32:50)
  • Borrow against their stock holdings rather than sell to fund their lifestyles, thus paying no tax on those gains (34:35–35:41).
    • “If you had $100 billion, they'd keep giving you money to... They do. They just give you money... They literally don’t pay it ever.” – Emily Peck (35:17)
• Step-up in basis: When the wealthy die, heirs inherit assets at current market value, erasing all capital gains for tax purposes.
  • “All the gains get washed away and we never pay tax on them. We call that the angel of death loophole.” – Ray Madoff (37:25)
• Charity as loophole: Unlimited deductions for gifts to family foundations enable dynastic power to persist tax-free.

---

4. Political and Social Shifts: Why the System Remains Unchanged

• Loss of collective will: The fading threat of socialism/communism reduced pressure to use taxation for redistribution; society began admiring, not distrusting, the ultra-rich (21:49).
• No modern Carnegies: Few wealthy voices advocate for taxing their class; while Buffett and Gates voice support, their actions reveal otherwise.
  • “If I had my way, I’d be paying a lot more in taxes. And I’m thinking, okay, well, what are you proposing?... But he doesn’t actually wanna put forth anything.” – Ray Madoff (22:42)
• Overcomplexity: Multiple tax systems (estate, gift, income, capital gains) lead to confusion, reinforcing the wealthy’s ability to skirt costs.

---

5. Reform Proposals and Ray Madoff’s Prescriptions

• Failings of a wealth tax: Direct wealth taxes drive money into hard-to-value private assets and are impractical for enforcement (46:02).
• A workable solution:
  • Eliminate the estate tax.
  • Tax unrealized capital gains at transfer, whether through sale, gift, or inheritance, with reasonable exemptions to shield ordinary families.
    • “We should bring it all into the income tax system because this division of taxes over these multiple systems... makes people confused. A lot of people think the estate tax is a double tax because they don’t know that inherited wealth is not subject to tax.” – Ray Madoff (47:54)
• Subject inheritances over a certain threshold to income tax, using the existing tax system for fairness and simplicity.

---

Notable Quotes & Memorable Moments

• The tax system’s moral failure:
  “To say that somebody like Mark Zuckerberg should be able to acquire so much wealth tax free, never pay taxes on it in his life, his kids might never pay taxes on it on their lives and forever and ever, no one ever pays taxes on it... That feels deeply inappropriate to me in a country that has such a large debt that we are paying more in interest than we are for our national defense.” – Ray Madoff (44:52)

• Frank Luntz’s pivotal branding:
  “Let’s call it the death tax. And by calling it the death tax, we are going to make everybody think that they are subject to it—just as death comes for everyone, so too does the tax man.” – Ray Madoff (13:03)

• Macabre estate planning humor in 2010:
  “Estate planners... often refer to it as the ‘throw mama from the train’ year. Or, you know, there were jokes like things to serve your parents in this year—warm chicken salad, get them flying lessons.” – Ray Madoff (16:39)

• Emily’s visceral reaction:
  “This Book made me so angry. I was sort of like simmering with rage just reading it.” – Emily Peck (03:12)

• On how the ultra-wealthy avoid ever paying tax:
  “If you have enough wealth to borrow money against it... nobody has to ever pay tax... There is this issue of step up in basis at death... that is a real frosting on the cake...” – Ray Madoff (36:05)

• On public attitudes toward tax and inheritance:
  “Once you have it, you don’t want to give it back.” — Felix Salmon (41:52)

---

Important Timestamps

• 03:12 – Emily’s emotional reaction to the book’s revelations
• 05:00 – Historical efficacy of income and estate tax
• 13:03 – Frank Luntz, rebranding, and the political attack on estate tax
• 17:26 – “Quiet quitting” by Congress on enforcing the estate tax
• 20:32 – The myth and rhetoric of “double taxation”
• 33:13 – Capital gains vs. salary: why the rich avoid income tax
• 34:35–36:05 – The borrow-against-stock trick for a lifetime of (untaxed) spending
• 37:25 – “Angel of death loophole” explained
• 41:52 – Why people hate paying taxes on inherited wealth
• 44:52 – Moral argument: tax fairness and the national debt
• 46:02 – Why wealth taxes may be unworkable in practice
• 47:54 – Ray’s core reform: tax inheritances and gains as ordinary income

---

Conclusion

Ray Madoff’s appearance on Slate Money vividly dissects the history, political dynamics, and contemporary strategies that have gutted America’s progressive tax tradition. Through sharp discussion and memorable examples, the episode makes clear that today’s tax code is built not on accident, but on policy drift and engineering by the rich and their allies. The proposed fix: eliminate the estate tax in favor of taxing inherited gains as ordinary income, a simple, fair, and enforceable route toward remedying the system’s deepest inequities.

---

For more on this issue: Read Ray Madoff’s book, "The Second Estate: How the Tax Code Made an American Aristocracy."

Transcript

[Ray Madoff]

Foreign.

[Felix Salmon]

Welcome to Money Talks, your guide to all manner of amazing ideas. The Slate Money show where we talk to the most interesting people in the world about fascinating things. This week I, Felix Ammon of Bloomberg, am joined by. Wait, hang on a sec. Emily Peck of Axios.

[Emily Peck]

Hello.

[Felix Salmon]

This is a two on one interview because Emily, who are we interviewing?

[Emily Peck]

This week we are interviewing the wonderful Ray Madoff who just wrote an amazing book called the Second how the Tax Code Made an American Aristocracy.

[Ray Madoff]

Hello, Ray hi. What a pleasure to be here.

[Felix Salmon]

Ray so, other than writing this book, what's your claim to fame? Introduce yourself. Who are you?

[Ray Madoff]

So I'm a law professor at Boston College Law School where I've been for 32 years, teaching students how to help the rich avoid taxes and teaching them other things as well.

[Felix Salmon]

So you have this book, it's all about exactly that, how the rich evade taxes. We're going to dive deep into the.

[Sponsor Voice (Saks Fifth Avenue)]

Estate tax or the effective lack thereof.

[Felix Salmon]

And income tax and what crazy strategies the rich have used not only to evade taxes, but also to persuade the government to let them evade taxes and what might conceivably be done about it. It's gnarly and depressing, but also a must listen, if I do say so myself. It's all coming up on Money Talks.

[Sponsor Voice (Charles Schwab / Apple Card)]

Slate.

[Emily Peck]

Money is brought to you by Charles Schwab.

[Sponsor Voice (Charles Schwab / Apple Card)]

Decisions made in Washington can affect your portfolio every day. But what policy changes should investors be watching? Washington Wise is an original podcast from Charles Schwab that unpacks the stories making news in Washington right now and how they may affect your finances and portfolio. [e-mail] WashingtonWise this message is brought to you by Apple Card. It's a great time to apply for an Apple Card you'll love, earning up to 3% unlimited daily cash back on every purchase and no fees period. Through this special referral offer. When you get a new Apple Card, you can earn bonus daily cash. To qualify, you must apply at Apple Co getdailycash Apple Card issued by Goldman Sachs Bank USA Salt Lake City Branch. Variable APRs for Apple Card range from 17.99% to 28.24% based on creditworthiness rates as of October 1, 2025. Offer may not be available elsewhere. Terms and limitations apply.

[Felix Salmon]

So Emily, I feel like in a weird change to the usual way this podcast works, I'm not going to start by asking the actual author of the book the question. I'm going to start by asking my co host Emily Peck, did this book make you mad?

[Emily Peck]

Felix this Book made me so angry. I was sort of like simmering with rage just reading it. Ray and I want you to go through all the ways. We've been talking about how rich people don't pay taxes for a long time, at least since, to my recollection, since, you know, Warren Buffett and his secretary, blah, blah, blah. And there's all this talk about creating a wealth tax. We can't create the wealth tax. Too hard to create the wealth tax. But underneath it all, we had been taxing the wealthy. We stopped doing it and we could just do it again. You don't have to create a new wealth tax. All you need is there and has been there all along, except the political will has completely vanished. And in all these ways, I. I'm paying way more taxes than probably Warren Buffett's secretary, and definitely Warren Buffett, probably, I think, although.

[Ray Madoff]

Absolutely. And Emily, that's why you are an A student, that you have taken away the exact message of this book, which.

[Felix Salmon]

Is basically that the United States has a taxation system which is really over indexed on the income tax. Everything is based on income tax. And if you're very rich, you can organize your affairs so you never have any income and then that means you don't pay any tax. There is a kind of sort of wealth tax, even though wealth taxes are unconstitutional. It's called the estate tax, but no one pays that right.

[Ray Madoff]

And you too get an A plus and a gold star.

[Felix Salmon]

Yay. So let's try and understand this. Emily was just mentioning that during a sort of halcyon mid century era, there was a point at which the estate tax, which is the wealth tax in this country, did kind of do its job and was kind of paid like in the history of the Republic. How many years of America's history did we have in this estate tax which actually helped redistribute wealth and raise revenue?

[Ray Madoff]

I think the point is not just about the estate tax, but it is also about the income tax. Together, the estate and the income tax did a pretty good job from when they were enacted in 1913 and 1916, pretty much right up through the 70s, I would say. Then things started to fall apart. And what's interesting is that if you look at the tax code today, it's not like they repealed sections or it looks quite similar to the way that it looked when they enacted it in 1913 and 1916. Structurally, it's very much the same. But a number of discrete moves have been taken by the wealthy to essentially remove themselves from the tax system, from both the income tax system and the estate tax system and the payroll tax system. So all of these taxes that working Americans are paying, they are optional for the richest Americans. Some of them might choose to pay them because they want to be compensated in a particular way, but it's only because they're choosing it, not because they have to have it be the case.

[Emily Peck]

So can we start with the estate tax? How was it originally structured and then what happened to sort of destroy its usefulness?

[Ray Madoff]

Right. So the estate tax was designed at a time when the country was very concerned about concentrations of wealth. It was the era of robber barons and, you know, the Gilded Age. And we had these new rich people that we had never had before in this country. Before that the United States had seen itself as a country of equals, at least equals for white men. Generally equal society. Right. All coming together. But then through the Industrial revolution and the rise of these super rich people, we had people who we never had before, and the country became very concerned about it. All sorts of people thought it was a problem.

[Felix Salmon]

Including the rich.

[Ray Madoff]

Well, including some of the rich, including Teddy Roosevelt and including the steel magnate Andrew Carnegie. And they both thought that this was a big problem to have large amounts of concentrated wealth, particularly inherited wealth, because they felt that inherited wealth created a sort of American aristocracy, which they said would be very bad and would undermine democracy. And of course, at the time, there was very real concerns because socialism was a very real, very viable option and was getting all sorts of votes. And so.

[Felix Salmon]

And by socialism, what we mean is like forcible redistribution of wealth.

[Ray Madoff]

Well, I would say the socialist movements, there were very strong socialist movements throughout Europe and here in the United States as well. And they sought to get rid of capitalism. They saw capitalism as a bad system. And capitalism had to prove itself. That's why even the conservative Wall Street Journal ran articles saying, we gotta get an estate tax here. Because they knew that the country was, was very concerned about these rich people.

[Felix Salmon]

And of course, so this was kind of like the nineteen teens version of triangulation, only instead of the left moving rightwards, as we saw with Clinton, it was the other way around. It was the rich moving leftwards in order to sort of diffuse the socialist threat.

[Ray Madoff]

And I wouldn't necessarily say the rich. I'd say there were some rich that were moving left. There were plenty rich. Andrew Mellon didn't want to bring about these taxes. So not. They weren't. I wouldn't say they moved as a group. But what I would say is that there was a larger societal concern about the risks of socialism and then later on of communism. These were real viable threats in this country. And the country had to prove that capitalism could do its job to deliver goods for everybody. And one of the ways of doing so was to have an estate tax. And so the estate tax was first enacted in 1916, and although it was briefly under Andrew Mellon, it was briefly removed in somewhere in the 1920s. Even Andrew Mellon suggested it should be brought back later on in the Depression when the country was suffering. And there was great concern about the stability of the country. And so in that period, straight up, for the next 40, 50 years, we had an estate tax. And the estate tax was quite a serious tax. So when I started teaching, which was in 1992, we had rates as high as 65% on the estate tax for people who had very, very large estates. And we had an exemption amount of like $600,000. So it was quite a serious tax.

[Emily Peck]

So meaning when you die, everything you own is all totaled up and the person who gets all of it has to pay 62% tax?

[Felix Salmon]

Well, no, the estate has to pay 62 tax.

[Emily Peck]

The estate has to tax, and then.

[Felix Salmon]

What'S left can be divvied up to however many people you like. And they don't pay tax.

[Ray Madoff]

Exactly, they don't pay tax. So we have this estate tax in place for this whole period. But the important thing about the estate tax was it wasn't just created as a one and done. It was created. And then as loopholes were created, Congress did its job and came in and closed the loopholes. So, for example, one of the long term problems was that people would create these long term trusts, right, that would go from grandparents to parents to children to grandchildren. And the way the tax rules worked, they were only subject to tax when the money went in, and they were never subject to tax as it passed from generation to generation. So these multi generational trusts were seen as a big problem. So what did Congress do in 1976 and then again in 1986, they enacted something called the generation skipping transfer tax. And that is a new layer of tax designed to stop people from avoiding the estate tax by creating these multi generational trusts. The generation skipping transfer tax is still on the books today, designed to prevent dynastic wealth, but you'll see how unsuccessful it has been. But the other thing that it did so shortly in this period, in 1990, another problem is people would do weird machinations to scrunch the value of their property just enough for it to pass from the decedent to their heirs, and then it would re blossom again. Right. So they'd pack it way down like one of those shrink wrap things, and then it would emerge on the other side and it would explode in its full value.

[Emily Peck]

What do you mean?

[Ray Madoff]

What I mean is that you might have something that was worth like 10 million, and then you would do all sorts of machinations and you'd get it down to be worth 1 million. And then as it appeared on the recipient's end, it would pop up back to be 10 million. These are the types of techniques that I teach my students in estate and gift tax class. You're welcome to come. So you had these techniques? Well, Congress again stepped in and in 1990, they enacted something called the special valuation rules. And those were designed to address people manipulating value in particular ways.

[Felix Salmon]

So the big picture here is that you have an estate tax society writ large and as represented by our elected representatives in Congress, it's like the estate tax is, broadly speaking, a good thing. It helps to reduce the monarchy of dynastic wealth. And more to the point, the people who can most afford to pay taxes are dead people. They can't do anything with the money. So why don't we tax the dead? It's much less painful than taxing the living. And people naturally try and avoid it. They want their heirs to get more money rather than less. And Congress over the years and over the decades, closes those loopholes as they are found. And people broadly are on board with the big picture here, which is estate taxes are a sensible thing to have, and let's just try and keep them. Something changes in 1990, 1990, where like, Congress, like, basically stops believing this and it stops closing loopholes. And in fact, in 2010, for one glorious year, there's no estate tax at all. And Congress is fine with that. So what changed?

[Ray Madoff]

So basically what happened was 18 of the country's richest families, MARS GALLO CO Waltons, got together and decided, we got to get rid of this estate tax. They formed a group and they tried to figure out how to do it. And they did a very smart thing. They hired this guy by the name of Frank Lutz. Frank Lutz was a genius marketer, and he figured out that if you call it the estate tax, everyone thinks it's fair, right? They think of the show Dynasty. They think of Paris Hilton, who was sort of a famous rich person back in the day. They think of rich people. They think of people who we shouldn't be worried about. But instead, what he said is, let's not call it the estate tax anymore. Let's call it the death tax. And by calling it the death tax, we are going to make everybody think that they are subject to it. That just as death comes for everyone, so too does the tax man at this time. And they had all these things, they had great slogans, you know, the family mourning family. And then there comes the tax tax man with their hand out.

[Emily Peck]

They hate farmers. They're always going to lose the farm.

[Ray Madoff]

Yes. And then they added that it's going to hurt the family farms and business. And actually, at one point early in my career, I was asked to testify in Congress that the Republicans were controlling and they had a hearing on the death tax and its impact on family farms and businesses. And needless to say, I was there for the Democrats.

[Emily Peck]

And you were like, no impact pass.

[Ray Madoff]

Exactly.

[Felix Salmon]

I do admire the cleverness of Frank Luntz, but he was pushing at an open door. On some level, I feel like the Republicans wouldn't have just been like, oh, public opinion has completely changed now that everyone's calling it the death tax. We're just going to have to stop closing the loopholes. Like, he gave them the rhetoric they needed to do what they wanted to do.

[Ray Madoff]

But then they got their candidate of choice, which was George W. Bush. And George W. Bush ran on a campaign to repeal the death tax. That was a key platform the Republicans then began to adopt as a key platform of their campaign. And they were very well financed for doing so. To kill the death tax because it's an immoral double tax that hurts family farms and businesses.

[Felix Salmon]

And Bush, of course, is the scion of an old money American family. So he's been a bit resentful about this estate tax for a while, probably.

[Ray Madoff]

No doubt. And so what's interesting is that the plan that George W. Bush put in place with the Republican Congress was to have a gradual increase of the exemption amount from a million to 2 million to 3.5 million, and then have one glorious year when there was no estate tax. We have a number of billionaires died that year, and lucky billionaires. Yes.

[Emily Peck]

We had a story at the Journal that was like, all the rich people are racing to die this year.

[Ray Madoff]

Exactly.

[Felix Salmon]

And crazily enough, like, statistically speaking, they did. The rate of death in 2010among the very rich was significantly higher than you would have expected from actual aerial tables alone.

[Emily Peck]

Makes no sense. If they stay alive, they don't have to pay that tax. Like, they'd rather die.

[Sponsor Voice (Charles Schwab / Apple Card)]

Like, that's crazy.

[Felix Salmon]

Well, a lot of them just, you know, clung On For Dear Life, someone came in and was just like, December 2009. And then the minute the clock ticks over to January 2010, they're like, okay, I can die now.

[Ray Madoff]

And also, there was. Estate planners are not really known for their sense of humor, but they really rose to the occasion at the time, and they often refer to it as the throw mama from the train year. Or, you know, there were jokes like things to serve your parents in this year, warm chicken salad, get them flying lessons. Anyway, there was a lot of macabre humor about it, and as you point out, a lot of people did die. But then the tax came back, right? And at this point, Barack Obama was president, and the tax was supposed to come back at its maximum tax rate, which I think by then was something like 55%, and with a $1 million exemption. But Obama knew which way the wind was blowing and knew how effective this repeal effort was. And so what he decided to do was, rather than letting it go back to a million, he raises it even further to $5 million, thinking, I've solved the family farm and business problem. It's done. Now, of course, it wasn't. And next, when Trump came into office, he doubled it to 10 million. Now he's increased it to 15 million. But the exemption, even though it's higher than it ever was, isn't really the crux of the story, because the tax is still there in place. We have this exemption, but honestly, a $15 million exemption is not going to do very much for somebody who has $100 billion. It's not going to make a difference. And we still have a flat 40% rate. So that's still quite a significant tax. But the thing that happened is the thing that you can't see, which is that since 1990, Congress, whether it was controlled by Democrats or Republicans, engaged in quiet quitting on keeping up the estate tax. And the effect of it was that on its own, the estate tax crumbled as estate planners did their jobs, finding more and more loopholes, marketing them, developing them, Right? So the estate planners are hard at work doing their thing, but Congress isn't doing its job, which is normally to come in and close loopholes so that we keep a system restored. So now we have a system that is just, you know, riddled with loopholes and raises nothing. It raised, in 2024, it raised 1/2 of 1% of federal revenue.

[Felix Salmon]

So this is the thing which I'm struggling with here is, you know, when Barack Obama increases the exemption, when Congress is totally otos, I Feel like it's giving Frank Clunz way too much credit to just blame him for this. There's obviously some kind of. What's the word? The path of least resistance for Congress is to just be, eh, whatever. We'll let them find their loopholes. We're not going to bother closing it. And this is something you don't see the Democrats caring very much about either, right? There's a broad feeling in society, I think, that estates are just not things that should be taxed. You shouldn't care about it that way.

[Emily Peck]

I was talking to a few people because I spoke to you a few months ago, I think, and I was gonna write about estate tax changes in the bill, the reconciliation bill that just passed. And I was speaking to a few people, friends, coworkers, who were like, I agree there shouldn't be this death tax. I pay taxes on my money, and when I hand it to my kids, why should it be taxed again? I've already paid my tax. And I was like, well, that sounds like a reasonable argument. But then before you. You came here today to the office, Felix and I were talking about it, and it was like, if you actually, if that's your argument, then no one should ever pay taxes for anything. Like, if I buy jeans at the store and I give my tax money to the jeans guy, then the jeans guy shouldn't. Shouldn't pay any tax. And it doesn't.

[Felix Salmon]

Well, my employer has already paid tax on their profits, so my pay should not be taxed.

[Emily Peck]

Why should my pay be taxed?

[Ray Madoff]

Absolutely. You're absolutely right. So, first of all, there is no such concept of double tax, right? And particularly not double tax amongst different taxpayers. I think the reason this double tax argument was so effective was because in the estate tax realm, if you think about it, the tax is nominally imposed on the decedent. And for some decedents, like, let's say somebody earned compensation, they only had compensation their whole life, and then they pay taxes on all that compensation. And then we think of, well, now that person's dead. Now we're going to impose an additional tax on that person. That feels unfair, even to me, in the structure of the tax, right? Because we no longer live in the world of the Gilded Age era believing that rich people are bad. Back in that era, people understood that rich people were a problem for society. But we don't live in a world. We live in a world where some people think every billionaire is a failure, other people think billionaires are saving the world. In 2010, there was this Book written called how the Rich Can Save the World and why We Should Let Them. There was a book called Philanthro Capitalism. Right.

[Felix Salmon]

There was a period, bless him.

[Ray Madoff]

Yeah, there was a period where we really loved our rich people. And so we don't want to punish rich people. We're in a very different era and we no longer have threats of communism or socialism. Right. Because capitalism now reigns supreme. And so there is no alternate system that we're worrying like, oh, the people are going to rise up in pitchforks and abandon capitalism. So there's a lot of reasons why taxes that are seen as sort of punishing the rich are not as welcome in society as they were when the tax was enacted.

[Felix Salmon]

And it's basically impossible these days to find latter day Andrew Carnegie's or Teddy Roosevelt to come out and say, yeah, the rich have too much money and we should tax it. The closest thing that I can think of is Warren Buffett and he has decided that he's giving all of his money to his kids, which is something he said he would never do.

[Ray Madoff]

Yes, well. And of course. And also Bill Gates. Bill Gates, if you notice, he was on a tour lately with his book and I was very interested to hear what he had to say about taxes. And he said the same thing in every single interview. And what he said was, if I had my way, I'd be paying a lot more in taxes. And I'm thinking, okay, well, what are you proposing? And of course he's not proposing anything. He just wants to say that he wants to pay more in taxes. He knows how to fix the system. He's not dumb. But he doesn't actually wanna put forth anything.

[Emily Peck]

He's not structured his wealth or estate in such a way that when he dies, his estate will be subject to the wealth tax. I assume it's all gonna be his foundation.

[Ray Madoff]

Right. But the whether he should be able to. So, I mean, we have very differing treatment of people with respect to charitable giving. Right. So if the two of you were to decide that you were gonna give all of your salary, annual salary, to charity, Right. You would not pay zero taxes. You would actually still pay significant taxes. Because our tax rules are set up that people are not allowed to eliminate their tax liability simply because they're giving to charity. Because we have this view that, well, society needs money too. Charity's good, but not the same. You still have to pay something in taxes. Nonetheless, our rule for the richest Americans, for people like Gates and Buffett, is they get to entirely direct their funds however they want. In their charitable spending. Even if their charitable spending is simply a private foundation controlled by their kids with no obligation for the money to ever come out. That counts too, and they don't have to pay any taxes. But that only comes about because we have unlimited tax benefits for capital gains and estate taxes, but we have limited benefits for income taxes, so we don't need to have we could have limited benefits for estate taxes and capital gains taxes the same we do for income taxes.

[Felix Salmon]

We have a quick ad break coming up, but after this, Ray will tell us what the solution to this problem might be.

[Ray Madoff]

Foreign.

[Sponsor Voice (Charles Schwab / Apple Card)]

This podcast is brought to you by Progressive Insurance. Fiscally responsible financial geniuses, Monetary magicians. These are things people say about drivers who switch their car insurance to Progressive and save hundreds because Progressive offers discounts for paying in full, owning a home and more. Plus, you can count on their great customer service to help you when you need it. So your dollar goes a long way. Visit progressive.com to see if you could save on car insurance, Progressive Casualty Insurance Company and affiliates. Potential savings will vary. Not available in all states or situations.

[Sponsor Voice (Saks Fifth Avenue)]

Slate Money is sponsored this week by Saks Fifth Avenue. Saks Fifth Avenue makes it easy to holiday your way. Whether it's finding the right gift or the right outfit, Saks is where you can find everything from the perfect Chloe bag for your hard to shop for sister to a Prada jacket for a fancy holiday dinner. If you visit saks.com, you'll be astonished at how easy it is to find new arrivals and gift inspiration from. I don't know, theres Van Norton, wonderful Belgian designer, lots of floral prints. Just the kind of thing you need to lighten up and brighten up what the darker days that are coming. If you don't want Dries Van Noten, I can tell you Sachs has holiday looks for everything. You can get Dolce Gabbana instead. I would recommend flowers. That's my top tip for this season as the nights get longer, but if you don't know where to start, Saks.com is customized to your personal style so you can save time shopping and spend more time just enjoying the holidays. Whether it's an office holiday party, a cozy night in, or a vacation getaway, Saks has everything you need to holiday your way. So make shopping fun and easy this season and find gifts and inspiration to suit your holiday style at Sex fifth Avenue.

[Sponsor Voice (Charles Schwab / Apple Card)]

This message is brought to you by Apple Card It's a great time to apply for an Apple card you'll love earning up to 3% unlimited daily cash back on every purchase and no fees period through this special referral offer. When you get a new Apple Card, you can earn bonus Daily Cash. To qualify, you must apply at Apple Co Get Get Daily Cash Apple Card issued by Goldman Sachs Bank USA, Salt Lake City Branch. Variable APRs for Apple Card range from 17.99% to 28.24% based on creditworthiness rates as of October 1, 2025. Offer may not be available elsewhere. Terms and limitations apply.

[Emily Peck]

Slate Money is brought to you by.

[Sponsor Voice (Charles Schwab / Apple Card)]

Charles Schwab Decisions made in Washington can affect your portfolio every day, but what policy changes should investors be watching? Listen to Washington Wise, an original podcast for investors from Charles Schwab to hear the stories making news in Washington right now. Host Mike Townsend, Charles Schwab's managing director for legislative and Regulatory affairs, takes a nonpartisan look at the stories that matter most to investors, including policy initiatives for retirement savings, taxes and trade, inflation concerns, the Federal Reserve, and how regulatory developments.

[Emily Peck]

Can affect companies, sectors and even the entire market. Mike and his guests offer their perspective on how policy changes could affect what.

[Sponsor Voice (Charles Schwab / Apple Card)]

You do with your portfolio. Download the latest episode and [e-mail] WashingtonWise.

[Emily Peck]

Or wherever you listen.

[Sponsor Voice (Progressive Insurance)]

This podcast is brought to you by Progressive Insurance. Do you ever find yourself playing the budgeting game? Shifting a little money here, a little there, just hoping it all works out well? With the name your price tool from Progressive, you can be a better budgeter and potentially lower your insurance bill too. You tell Progressive what you want to pay for car insurance and they'll help you find options within your budget. Try it [e-mail] Progressive Casualty Insurance Company and affiliates Price and coverage match limited by state law not available in all.

[Emily Peck]

States States.

[Felix Salmon]

I do want to ask you because the one billionaire we just had, David Gallis on this show talking about Yvonne Chouinard, who is this billionaire who would drive around with a car that had a bumper sticker saying every billionaire is a policy failure? And I asked David when he came on this show in this very studio, I said, so Chouinard became a billionaire by owning a privately held company, Patagonia, which got bigger and bigger over the years and was eventually worth billions of dollars and he owned it and that was how he was so rich, what policy would have stopped him from becoming a billionaire that should be adopted because there was a policy failure that this happened? And David said, well, he doesn't really think that way. He's not a policy person. But you're a policy person. So I'm asking you Is there a policy that could be enacted that Congress could pass that would prevent someone like Yvonne Chouinard from ever becoming a billionaire?

[Ray Madoff]

I don't think that is the right question. I'm also gonna defer on that. I think that now with respect to Chouinard, I have another view about which is, was that his ability to not pay any taxes when he gave that money to a 501, which is an organization that can engage in politics and political spending. Right now people on the left think that, well, he's doing good political spending, so it's okay with us, but they feel a little bit differently with that. The person who gave all of his money to Leonard Leo setting up the Marble Trust. And that too was tax free. But why should we be allowing these tax free transfers of power when if any of us here around the table want to give the our money, we're limited in our tax benefits. Why do we give unlimited tax benefits that's not even for charitable giving? And Barack Obama, I hate to say it, was actually partially responsible for that change in rule because it would have been subject to gift taxes but for a rule change that he put in place.

[Felix Salmon]

And we don't need to go into Paul Newman. But yeah, there's been a lot of various changes in the law which have made it easy or easier for people like Yvonne Joouinad or my own employer, Mike Bloomberg, to basically ensure that their empires remain intact after death so long as they have they sort of incant the right incantations about, well, the family members aren't on the board and there's a dual class voting style in the world.

[Emily Peck]

I understand, actually. So if I donate all my salary to charity, I have already paid on my salary.

[Ray Madoff]

No, no, no. The question is, what are your charitable tax benefits? Right? So let's say one year you earn, for sake of easy numbers, $100,000. Okay. And you say, you know what? I'm giving my $100,000 to my favorite charity. Okay. You will still pay significant taxes on that $100,000 that you owe.

[Emily Peck]

Because I pay income tax.

[Ray Madoff]

Because there's a limit on your charitable deduction. You can't take a $100,000 charitable deduction because they only let you offset it by. It varies, but let's say 50% and.

[Felix Salmon]

You still have to make payroll and.

[Ray Madoff]

You have to pay payroll taxes and payroll taxes has nothing to you can't offset for charitable gains. Right?

[Emily Peck]

I've already paid, but so if I'm a rich person and I donate.

[Ray Madoff]

So the thing is we have to start with is that our rich people are not paying taxes along the way, and that's because they are not taking taxable income. So start with salaries. Right. Salaries are the most heavily taxed of all.

[Emily Peck]

That made me mad just reading the book.

[Ray Madoff]

Right.

[Emily Peck]

And it doesn't have to be the case tax. Right. That you think is just.

[Ray Madoff]

Oh, well, there's two separate aspects of it. Right. So one aspect of it is the income tax, which we tax at a maximum rate currently of 37%. Right. But capital gains are taxed at a maximum rate of 20%. What's interesting is Andrew Mellon, who was no particular fan of the working man, thought that it should be the other way around. People should pay higher taxes on investments than on their salary income.

[Felix Salmon]

Because it's unearned income.

[Ray Madoff]

Because it's unearned income. Right. Their salary income. Somebody who depends on salary income. It's so much more precarious. It depends on constantly. So he thought we should flip the rate. So this question about which rate should be higher has been something that people have had different views on. But I leave the issue aside of capital gains rates because there is a more pernicious problem that comes about when we're talking about the very rich, and that is the fact that. That what I call the tax avoidance playbook. So there's three steps of the tax avoidance playbook. Right. How is it that the rich are not paying taxes and the first thing that they do is not take any salary? So Warren Buffett is like, what takes one of the biggest salaries of rich people? A full $100,000 in salary and bonus. But that is mighty modest for the greatest stock picker of all time. Right. Jeff Bezos, he's. For the past decades, he's taken $80,000 enough to make him eligible for the child tax credit, which he has taken. And Mark Zuckerberg and a host of others all take a dollar a year. And they're not doing this because they're just great guys that want to like, really help out their companies. They're doing it because that way they avoid the heavy taxes that would be imposed on salary income. And instead what they count on is the growing value of their stock. So they all have no taxable income.

[Felix Salmon]

They also have the ability to start paying themselves salary anytime that their stock stops rising.

[Emily Peck]

So if you're super rich guy, you don't take a salary, you take a nominal salary. You make all your money in stocks.

[Sponsor Voice (Charles Schwab / Apple Card)]

The next step.

[Emily Peck]

Let's see if I can get this right, is that you don't sell the stock.

[Ray Madoff]

That's the key.

[Emily Peck]

You borrow against the stock.

[Ray Madoff]

Yes.

[Emily Peck]

And you don't. This is what really took me too long to understand feel because like so obvious, you hold the stock, you borrow against the stock, you spend the money you borrowed. You don't pay back the money you borrowed. You just keep borrowing. You just keep rolling over. They just keep giving you the money.

[Ray Madoff]

Yes. Because if you had $100 billion, they'd keep giving you money to. They do.

[Emily Peck]

They just give you money. They literally don't pay it ever. I have to pay my mortgage. But you just can just keep rolling.

[Felix Salmon]

Imagine you had like an interest only mortgage. Mortgage. It's like that. You capitalize the interest. Like the bank is getting an asset which is getting bigger and bigger. And they're sitting on the bank's balance sheet and they are like we have ballooning assets because their asset is their loan to you. And you do own that.

[Emily Peck]

So do I make interest payments on.

[Felix Salmon]

You either make the interest payments or you capitalize the interest payments. But either way the bank can show that interest as income.

[Emily Peck]

Okay, so that's the value to the bank is that it's charging you interest. That it's.

[Ray Madoff]

It will eventually get it at some point.

[Felix Salmon]

How?

[Ray Madoff]

Well, because you might borrow more.

[Felix Salmon]

No, eventually you die. And then when you die, everything resets to zero. Your heirs get everything.

[Ray Madoff]

Yeah.

[Felix Salmon]

So, well, step up in basis and all of that.

[Emily Peck]

But when I die, then the bank gets the money at that point?

[Ray Madoff]

No, it all depends. Well, these are two separate things. And I want to talk about the step up in basis issue, but the point is, is that actually nobody has to ever pay. It doesn't have to be paid back. Any of these people can pass the property onto their kids. And yes, like maybe the bank is gonna collect, but chances are the bank is gonna be just as happy to continue to give loans to the kids who have now inherited hundreds of billions of dollars of stock. So nobody has to ever pay tax as long as you have enough wealth to borrow money against it. And that's why our wealthiest Americans don't pay taxes. There is this issue of step up in basis of death. That is a. I will agree. It is a real frosting on the cake, which is that some property that passes through your estate at death, we give an added bonus to the heirs, which is all the gains get washed away and we never pay tax on them.

[Emily Peck]

I can't believe that. So like if I buy a stock for $10 a share, whatever, it goes up to $100. I die. I've gained $90 per share on all those stocks. I give them to my kids, they can sell them and pay no tax.

[Ray Madoff]

That's right.

[Felix Salmon]

No income tax, no capital gains tax, nothing.

[Ray Madoff]

We call that the angel of death loophole.

[Emily Peck]

That is some wild stuff right there. And so you live your whole life. You're living your life. The bank is just giving you money. This is what I'm understanding. This is. It was confusing how you both explained it to me. I'm not gonna lie. But you borrow money against yourself.

[Ray Madoff]

You're not giving me an A.

[Emily Peck]

You don't. No. You don't make payments on the borrowing. You're just given money literally by the bank and you just sit on the stock and you die. And the stock, you move it on to the next generation. They pay nothing for it. No one ever gets taxed. There is no double tax, even though that's. We established. Not even a thing. It's not even even a thing.

[Felix Salmon]

But let's say that over the years, as your stock went up from $10 to $100, you borrowed $20 for income for you to spend on paintings and private yachts and all of that kind of stuff.

[Ray Madoff]

Right?

[Felix Salmon]

Then if you wanted to repay that loan while you were alive, then you would need to sell $30 of stock because that stock would be subject to capital gains tax in order to have that $20 of post tax money that you could use to repay the bank once you're dead. Your heirs only need to sell $20 of stock to repay the bank because they are not subject to those capital gains. So that's the trick. In terms of not paying taxes, you do still need to repay the loan. You just don't need to repay the loan with post tax money, you know, which has already paid a bunch of capital gains.

[Ray Madoff]

You can repay the loan with more borrowed money. There's nothing that heirs can borrow money. They can.

[Felix Salmon]

So they have two choices. They can either just sell the appreciated stock and not pay capital gains and pay off the loan, or they can roll over the loan. It's up to them. But there's no real tax benefit to them to rolling over the loan.

[Ray Madoff]

Because tax benefit. Right. For the shares that they receive. Yes, I do want.

[Emily Peck]

I don't think they're like paying ATM fees. Do you know what I mean? Like what? I can't believe it. It's really wild.

[Ray Madoff]

I do want to note one thing about this. Step up in basis of death. Step up in basis at death is completely egregious. And there is no justification for it at all. But I don't want anybody to be fooled into thinking that if we get rid of step up and basis at death, then we have a fair system. Because that's just the ultimate sprinkles on the frosting on the cake. It's the tiniest portion. It gets a lot of attention because it's so egregious. So then you'll sometimes hear people say, well, to fix the system we should just have everybody take carryover basis. And I just want to make clear that carryover basis, meaning the heirs would take the same low basis so they would pay tax if they sold. Carryover basis does not solve the problem because the heirs can also continue to borrow. In order to solve the problem, we should adopt a rule that was proposed by this unlikely pair of Richard Nixon and Barack Obama who both proposed the same thing to address this problem.

[Felix Salmon]

I think they were both in the Senate, but not at the same time.

[Ray Madoff]

And that proposal is that you tax gains not just when you sell property, but whenever you transfer the property. So if you transfer it by gift or into a trust, or you transfer it at death, then you should tally the gains and tax them to the person who owned the property when it went up in value.

[Emily Peck]

But if you haven't sold it, how do you.

[Felix Salmon]

Well, so you don't need to sell it. So for instance, I am on my co op board in New York City for my sins. And we have this rule. People in the building, for whatever reason, sometimes decide that they want to transfer their shares into a trust. You know, they're doing estate planning, something, something. And that for our purposes is considered to be a sale. And if it's a sale, then there's like a flip tab that is payable and they have to pay that flip tax. Even if there's no buyer who is paying lots of money for the apartment.

[Ray Madoff]

Absolutely. And they can borrow to do so you have an asset that's worth it, or you could allow payment over time.

[Emily Peck]

Now I'm thinking personally, if I had some stock and I wanted to put it away for my kids one day, I don't wanna pay taxes on it, cause I don't have the money for it.

[Ray Madoff]

Well, you know, people don't wanna pay taxes on a lot of things. Somebody who earns $60,000 driving an Uber doesn't wanna have to pay $14,000 of it in taxes, but they do. So the question is, how do we allocate?

[Emily Peck]

But it's not, it's not like when I get my salary, it's liquid and they take the money out. I've never touched the money, but, like, if it's stuck, it's not like I can take some out.

[Felix Salmon]

I think you have really put your finger on something important here, which is the sheer power of.

[Emily Peck]

Yeah, once you have it, you don't want to give it back.

[Felix Salmon]

Because almost everyone who's a W2 employee in this country has taxes withheld before they get their paycheck. They don't feel it nearly as much as if you have a bunch of untaxed wealth. And at some point in the future, a bunch of that is going to have to go in. Tax people just are much less happy about the prospect of paying tax on money that they have rather than having paid tax on money that they have.

[Emily Peck]

Yeah, of course.

[Felix Salmon]

Even though the tax that they have paid on their income is much larger. And a rational person would prefer to pay a lower tax rate in the future than a higher tax rate in the past.

[Emily Peck]

It's just also a lot of work. I remember I had a job. I always was a W2 paycheck person. And then I was laid off in journalism. And then I got a job, and it was freelance, but it felt like full time. It was full time freelance. So they paid me the whole thing every week. And I was like, thank you. And I spent the money. It never occurred to me that I was gonna have to pay taxes. And then at the. You know, it's in April and the account's like, oh, you owe whatever. It was like $8,000. Well, I don't have $8,000. You know, like, what am I supposed to do?

[Ray Madoff]

And you even owed more than you would have expected.

[Emily Peck]

Yeah. Double taxes. Because the Social Security. Because the employer doesn't pay the Social Security tax.

[Ray Madoff]

You have to pay both halves of it.

[Emily Peck]

It was pretty devastating. It's way better if the government just gets in there and you never have to do it yourself and do that.

[Ray Madoff]

If we take the two versions of you, Emily, the version of you that. That made the money and then had to pay the taxes. Right. Or the version of you have stock that's gone way up in value and now you wanna give it away to your kids, but you don't wanna pay tax on the gain. Which, Emily, do you feel more sympathy for?

[Emily Peck]

But I haven't gotten the gain. Like, I would have to sell it to pay the tax. You know what I mean? That's what I'm saying. I wouldn't be able to just pass the stock along. I'm not that rich.

[Ray Madoff]

Right.

[Emily Peck]

That's the thing I was, like, having trouble with.

[Ray Madoff]

So you could have an exemption for people who are not that rich. Right. You could easily say.

[Emily Peck]

I would advocate.

[Ray Madoff]

We could. And we have that for things like houses. Right. People don't have to. Because we wanna try to encourage people to sell houses. But we could have rules that address that situation. The problem is, and I think you're illustrating the problem really well, we look at our situation, right? Like maybe we have a house that's gone up in value or stock that's gone up in value, and we think, wow, this would be really burdensome for me to have to pay taxes. Therefore, we should have a rule. I'm happy with the rule that we don't have to pay taxes. Now move over to Mark Zuckerberg. Right?

[Sponsor Voice (Charles Schwab / Apple Card)]

Right.

[Ray Madoff]

He's got, I don't know, $200 billion, something like that. Do we wanna say now he never has to pay taxes on it?

[Emily Peck]

He doesn't have the same constraints as I do. Like if someone asks him to pay the capital gains tax when he's trying to pass the stock on, he can afford to do that. He's not cash poor.

[Ray Madoff]

He can get. And he can borrow money or his kids can borrow money. There's ways to address it. So I think that's why we have to be careful when we think about problems with the tax system. Some things can be addressed by addressing and making exceptions for certain people. And some things need to be addressed because they're fundamentally unfair. But to say that somebody like Mark Zuckerberg should be able to acquire so much wealth tax free, never pay taxes on it in his life, his kids might never pay taxes on it on their lives and forever and ever, no one ever pays taxes on it. They just borrow money and live off the borrowings. And that feels deeply inappropriate to me in a country that has such a large debt that we are paying more in interest than we are for our national defense.

[Felix Salmon]

So, Ray, the big picture that I want to ask you about is so long as R is greater than G, and so long as Congress has zero appetite for redistributing wealth, that just means that the rich are going to get richer and the main store of that wealth is the stock market. And therefore the stock market is likely to continue to rise.

[Ray Madoff]

I think one problem with this is that the main store is no longer the stock market. And this is why wealth taxes, I think, would be a dangerous thing. A significant amount of money is held not in publicly traded stocks, but in privately held interest. That's why we have this sort of all of the unicorns that never go public. It's why we have these partnerships that are worth many, many billions of dollars. Highly complex private ownership interests of businesses that is not on the publicly traded market. And there's a big outflow of money to those things. And if we were to adopt a wealth tax, there would be an even greater outflow from the stock market to these privately held interests that are quite difficult to value. Which is, is one of the reasons why I think that a wealth tax would be a very troubling way for us to go in terms of taxes.

[Felix Salmon]

Like an annual wealth tax as opposed to in the state tax.

[Ray Madoff]

Annual wealth tax, yes.

[Emily Peck]

Just go back to the estate tax. Seems like it was fine.

[Ray Madoff]

No, the estate tax had that Achilles heel. We should not have the estate tax. We have an estate tax, but just fix it.

[Emily Peck]

Close up all the grats and the grots and the whatever.

[Ray Madoff]

But why hasn't it been fixed? It hasn't been fixed because how rich.

[Emily Peck]

People run the government.

[Ray Madoff]

That hasn't been fixed because. Because even Democrats don't like the estate tax. The estate tax feels unfair because it's imposed on the donor's estate. For some people it feels like a double tax problem. What I think the problem is, and again, when you use the word redistribution of wealth, right, this is all about redistribution of wealth. I don't describe the problem that way. I see the problem as one that we have given a glide path to the rich of non taxation. And what we need to do is to pull them into the system so we don't need special added taxes for them. What we need is for them to actually be taxed on their investment and inheritances. And I think the best way to do it is to get rid of the estate tax.

[Felix Salmon]

Oh my God.

[Ray Madoff]

And to have people pay taxes on the gains of their property at death with subject to a limit that keeps Emily out. And then after that, when people inherit money that should be subject to income taxes. Now we could say everybody can inherit even $2 million tax free, right? And then after that pay income taxes the same as they would on lottery winnings or money found on the street or any of the other broad groups that is taxed to income, we should bring it all into the income tax system because this division of taxes over these multiple systems, it makes people confused. A lot of people think the estate tax is a double tax because they don't know that inherited wealth is not subject to tax.

[Felix Salmon]

Ray Madoff, thank you so much for coming on this show. It's been illuminating.

[Ray Madoff]

Thank you so much for having me. It's so fun to be here in the room with you guys.

[Felix Salmon]

We're in the room. And one last time, what is the title of your book?

[Ray Madoff]

The Second Estate, how the Tax Code Made an American Aristocracy.

[Felix Salmon]

Ray, thank you. Thanks also to Ben Richmond and Jasmine Molly for producing and Shayna Roth, the whole crew. And we'll be back on Saturday with normal Slate Money.

[Sponsor Voice (Saks Fifth Avenue)]

Slate Money is sponsored this week by Saks Fifth Avenue. Saks Fifth Avenue makes it easy to holiday your way. Whether it's finding the right gift or the right great outfit, Saks is where you can find everything from the perfect Chloe bag for your hard to shop for sister to a Prada jacket for a fancy holiday dinner. If you visit saks.com, you'll be astonished at how easy it is to find new arrivals and gift inspiration from.

[Ray Madoff]

I don't know.

[Sponsor Voice (Saks Fifth Avenue)]

Theres Van Norton, wonderful Belgian designer. Lots of floral prints. Just the kind of thing you need to lighten up and brighten up what the darker days that are coming. If you don't want Dries Van Noten, I can tell you Sachs has holiday looks for everything. You can get Dolce Gabbana instead. I would recommend flowers. That's my top tip for this season as the nights get longer. But if you don't know where to start, Saks.com is customized to your personal style so you can save time shopping and spend more time just enjoying the holidays. Whether it's an office holiday party, a cosy night in or a vacation getaway, Saks has everything you need to holiday your way. So make shopping fun and easy this season and find gifts and inspiration to suit your holiday style at Saks Fifth Avenue.

[Felix Salmon]

Limu, Gay, Mo and Doug.

[Ray Madoff]

Here we have the Limu Emu in its natural habitat, helping people customize their car insurance and save hundreds with Liberty Mutual. Fascinating. It's accompanied by his natural ally, Doug.

[Emily Peck]

Uh, Limu is that guy with the binoculars watching us?

[Ray Madoff]

Cut the camera. They see us.

[Felix Salmon]

Only pay for what you [e-mail] Liberty Liberty Liberty. Liberty Savings Fairy underwritten by Liberty Mutual Insurance Company Affiliates excludes Massachusetts.