# Gabriel Zucman —wrong about how much CA taxes ultra wealthy pay (Part 1 of 2) Date: 2026-04-01 Next Part: https://disrael.github.io/blogs/raw/gabriel-zucman-wrong-about-how-much-ca-taxes-ultra-wealthy-pay.part2.md --- --- ### Gabriel Zucman —wrong about how much CA taxes ultra wealthy pay To get to the bottom of Zucman’s analysis of the billionaire’s tax rate you must see that this [paper](https://gabriel-zucman.eu/files/BSYZ2025NBER.pdf) references this [paper](https://www.irs.gov/pub/irs-soi/24rpestimatingtaxburdens.pdf) which references this [paper](https://ntanet.org/wp-content/uploads/proceedings/2010/020-raub-a-comparison-wealth-2010-nta-proceedings.pdf): > An exact match, based on name, between estate tax returns filed for 1982–2008 and the 1,378 individuals who have appeared in the publicly available listings of the Forbes 400 covering the same period yielded 376 individuals who had been listed in the Forbes 400 and for whom an estate tax return was available in SOI’s database. In [SOI data](https://www.irs.gov/statistics/soi-tax-stats-estate-tax-filing-year-tables) for 2023, we divide the size of gross estate $50 million or more column by the net estate tax column and you get 22.28%. But of course that 22.28% is ***NOT*** what billionaires dying in 2023 actually paid — Zucman claims it’s around 10%. Take Charlie Munger, the famous Berkshire Hathaway partner, who died in November of 2023: > Munger was survived by three children from his first marriage (Wendy, Molly, and the late Teddy Munger) and four from his second marriage (Charles Jr., Emilie, Barry, and Philip), along with two stepchildren. He had already given his children and stepchildren **half of his fortune before his death**. The problem is how much transfer tax did Munger’s children actually pay? > Borrowing against stock, often called the “buy, borrow, die” strategy, is a tax-avoidance method used by the wealthy to access cash without selling appreciated assets and triggering capital gains taxes. So Munger’s children would have had access to all kinds of loans and opportunities for creating wealth without being taxed. Plus there are **irrevocable (**meaning you don’t control the money anymore so the IRS doesn’t consider it yours) [trusts](https://www.propublica.org/article/more-than-half-of-americas-100-richest-people-exploit-special-trusts-to-avoid-estate-taxes) that would similarly make SOI data too optimistic: > More than half of the 100 richest Americans have used these special trusts to avoid taxes, saving them billions of dollars in total. These trusts, such as those used by the Walton family or Lauren Powell Jobs, help maintain family control over businesses Beyond the few famous stock sale events that must be reported to the SEC, it’s really difficult to say how much tax was collected in the past and especially difficult to project billionaire taxation into the future. More about all of the reasons American ultra rich have stopped paying taxes, including “step up in basis” for inheriting stocks is here: However that doesn’t stop Zucman from presenting speculative billionaire tax rate slides like [this one](https://gabriel-zucman.eu/files/report-g20-slides.pdf) to the G20 ![Image](https://disrael.github.io/blogs/assets/gabriel-zucman-wrong-about-how-much-ca-taxes-ultra-wealthy-pay-0f0362e598.png) Supposedly you are arguing that the ultra wealthy need to pay more taxes but at the same time you are claiming that US billionaires pay close to 10% on average. And “buy, borrow, die” and trust strategies are just some of the many that can be used: > Tech mogul [Peter Thiel](https://www.google.com/search?q=Peter+Thiel&oq=billionaire+that+avoided+capital+gains+taxes+using+ira&gs_lcrp=EgZjaHJvbWUyBggAEEUYOTIJCAEQIRgKGKABMgkIAhAhGAoYoAEyCQgDECEYChigATIHCAQQIRiPAjIHCAUQIRiPAtIBCTEzNjQ0ajBqNKgCAbACAfEFxMeAob8uYN_xBcTHgKG_LmDf&sourceid=chrome&ie=UTF-8&mstk=AUtExfBjcbvzsVhlB4HOCh16Xf5b4tj6x1cGQB4ZB6I_C5oB8biQFElGW_fgu9FCeVCiuSO4p810WRjwg2AhdoYKH7Lvn7myclcQlgLVmLYMcr1lrycA8VzhObubOLgn2unJn7yDYsXWX2U36GG7IclXwEkfXmBUqmJjqYSExQnnPR01JzXSqhQWoGA0nOy1mx5TTVWYttftG_JgFr-a2v4A-0pv61-ek_pukhM3xaQUu471rGY5yUgz9XKQl7ereG69HdUNBzXQ3SXMqsOA_Q-nRL9d_cNvfWDMsasF-m6BvNBayA&csui=3&ved=2ahUKEwjogp-WssSTAxXaJ0QIHa9xJNEQgK4QegQIARAB) is the most prominent example, using a [Roth IRA](https://www.google.com/search?q=Roth+IRA&oq=billionaire+that+avoided+capital+gains+taxes+using+ira&gs_lcrp=EgZjaHJvbWUyBggAEEUYOTIJCAEQIRgKGKABMgkIAhAhGAoYoAEyCQgDECEYChigATIHCAQQIRiPAjIHCAUQIRiPAtIBCTEzNjQ0ajBqNKgCAbACAfEFxMeAob8uYN_xBcTHgKG_LmDf&sourceid=chrome&ie=UTF-8&mstk=AUtExfBjcbvzsVhlB4HOCh16Xf5b4tj6x1cGQB4ZB6I_C5oB8biQFElGW_fgu9FCeVCiuSO4p810WRjwg2AhdoYKH7Lvn7myclcQlgLVmLYMcr1lrycA8VzhObubOLgn2unJn7yDYsXWX2U36GG7IclXwEkfXmBUqmJjqYSExQnnPR01JzXSqhQWoGA0nOy1mx5TTVWYttftG_JgFr-a2v4A-0pv61-ek_pukhM3xaQUu471rGY5yUgz9XKQl7ereG69HdUNBzXQ3SXMqsOA_Q-nRL9d_cNvfWDMsasF-m6BvNBayA&csui=3&ved=2ahUKEwjogp-WssSTAxXaJ0QIHa9xJNEQgK4QegQIARAC) to grow a small investment into an estimated $5 billion tax-free. By placing undervalued shares of PayPal into a Self-Directed Roth IRA in 1999, he avoided all capital gains and income taxes on the growth. But the SOI data method becomes completely ridiculous if you try to apply it to state taxes as [Zucman shameless does](https://eml.berkeley.edu/~saez/galle-gamage-saez-shanskeCAbillionairetaxDec25.pdf) to come up with the insane billionaires pay 2.5% of California income tax idea: > Billionaires do not generally earn much ordinary income nor do they generally sell their assets and thus their income is a relatively small portion (about 2.5%) of total California income tax receipts. > This is based on US statistics for billionaires reported in Balkir, Akcan, Emmanuel Saez, Danny Yagan, and Gabriel Zucman. “How Much Tax do US Billionaires Pay? Evidence from Administrative Data”, NBER Working Paper, №34170, August 2025, and assuming that California billionaires represent 28% of the US billionaire total (as their wealth is 28% of total US billionaire wealth). There are 33 states with no state estate tax — **including California. So SOI data tells you nothing about how much *state* taxes a billionaire in California pays.** ![How can a face like that be lying?](https://disrael.github.io/blogs/assets/gabriel-zucman-wrong-about-how-much-ca-taxes-ultra-wealthy-pay-23b8c0076d.jpg) *How can a face like that be lying?* Plus Zucman says great sounding things like [this](https://paulkrugman.substack.com/p/talking-with-gabriel-zucman): > So what it means, essentially, is that if the 19 wealthiest people in the US spent all their wealth, they could buy the equivalent of 10% of the value of all the goods and services that are produced in a given year in the US. And of course, they don’t do that, right? They’re not spending down their wealth like that. But it’s just an illustration of the overwhelming economic power that they have and the power that they have to buy elections, to buy media, to buy influence, to buy competitors. And so that’s really quite striking. > And then what you can do with this type of time series is you can compare today’s situation to the Gilded Age. And in the Gilded Age, the number was 4%, meaning the very top [bracket] owned in wealth the equivalent of 4% of US national income. And so by that metric, this new Gilded Age is characterized by much stronger concentration at the top than the original Gilded Age, with a very fast pace of increase since 2010, and particularly fast over the last couple of years. And so I think it’s a good illustration of just the overwhelming economic and also political power that this tiny elite has acquired in America, which is truly unprecedented. But even that quote assumes the previous Gilded Age ended. Taken together with the sketchy inheritance numbers you would get the idea that Gilded Ages are temporary things. [However](https://www.zmescience.com/other/economics/britain-70-percent-william-conqueror-rep/#:~:text=Here%27s%20a%20fun%20fact%20about,greatly%20affects%20the%20UK%20now.) --- **[Continue reading Part 2 of 2](https://disrael.github.io/blogs/raw/gabriel-zucman-wrong-about-how-much-ca-taxes-ultra-wealthy-pay.part2.md)**