How?

They use a tax strategy known as buy, borrow, die.

It's like the ultra-wealthy are living on another planet.

Average people need income to pay for basics like housing and food.

But the ultra-wealthy don't.

They can just live on borrowed cash.

Step 1, buy.

The ultra-wealthy buy an asset or build a company or inherit a fortune.

As long as they don't sell, they own no taxes.

They keep their income as low as possible since every dollar they earn can be taxed.

Step 2, borrow.

They borrow against their holdings and the bank gives them a really good deal.

I'll loan you $10 million with only 3% interest.

But if you take a $10 million salary from your company, you'll owe almost 37% to the IRS.

So the ultra-wealthy use loan money to fund their lifestyles.

That's how a billionaire can live the most luxurious life imaginable while reporting little to no taxable income.

Step 3, die.

When they die, these lucky few often use complicated trusts and philanthropic foundations to avoid the estate tax.

And their heirs can inherit stocks and other assets tax-free.

A new generation is ultra-wealthy and the cycle starts all over again.