Professor Ray Madoff on How to Tax the Rich

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“Somebody who is self-employed and earned sixty thousand dollars will pay about thirteen thousand dollars in income taxes and payroll taxes.”

— Professor Ray Madoff

Why do billionaires often pay lower tax rates than working Americans? In this episode of the Sunlight Tax Podcast, I sit down with tax policy expert and professor, Ray Madoff, to explore how income, wealth, and inheritance are taxed in the United States, and why the current system often favors the ultra-wealthy.

We discuss wealth inequality, estate taxes, billionaire tax strategies, and the most promising proposals for tax reform. If you've ever wondered how the tax code shapes who builds wealth in America, this conversation offers a clear and accessible look at what a fairer tax system could look like.

“Let’s say that you’re Mark Zuckerberg. What he has is a growth in value of his stock. And even though that growth in value of his stock has made him very, very rich, it is not treated as taxable income.”

— Professor Ray Madoff

Also mentioned in today’s episode:

02:30 Background on Professor Ray Madoff and her work

05:40 How the tax system favors the wealthy

07:19 The impact of growth in stock value and tax treatment

09:02 Living off wealth, not income

10:04 Inheritance, gifts, and the lack of taxation

12:15 The estate tax and loopholes

16:20 Public perception and fairness in the tax system

17:21 How the wealthy avoid taxes: borrowing against assets

23:02 Political feasibility of tax reforms

25:46 Wealth taxes and their challenges

29:56 Legal and constitutional issues with wealth taxes

31:46 Potential benefits of well-designed tax policies

If you enjoyed this episode, please rate, review and share it! Every review makes a difference by telling Apple or Spotify to show the Sunlight Tax podcast to new audiences.

About Professor Ray D. Madoff:

Ray D. Madoff is a professor at Boston College Law School and the cofounder and director of the Boston College Forum on Philanthropy and the Public Good. She is the author of Immortality and the Law: The Rising Power of the American Dead and lead author of The Practical Guide to Estate Planning. Her writing has appeared in The New York Times, The Wall Street Journal,  The Washington Post, and The New York Review of Books, among other outlets.

Episode Links:

Professor Ray Madoff’s Book: The Second Estate: How the Tax Code Made an American Aristocracy

My FAQ page on how to Tax the Rich

Get my Tax Help on Substack

Get your FREE visual guide to tax deductions

Order my book: Taxes for Humans: Simplify Your Taxes and Change the World When You’re Self-Employed

Watch YouTube video version

Transcript:

Hannah Cole (00:07)

Hello, beautiful. I am so excited to bring you a guest I have really wanted to get on to the Sunlight Tax podcast ever since I read her incredibly readable, incredibly educational book, The Second Estate: How the Tax Code Made an American Aristocracy. So today on the podcast, I am here with Dr. Ray Madoff. She's a professor at Boston College Law School, where she teaches and writes in tax law and policy.

Wills and Trusts Law and Estate Planning. She is co-founder and director of the Boston College Law School Forum on Philanthropy and the Public Good, a nonpartisan think tank that convenes scholars and practitioners to explore questions regarding whether the rules governing the charitable sector best serve the public good.

Hannah Cole (00:55)

Professor Madoff, thank you so much for joining me on the Sunlight Tax podcast.

Ray Madoff (00:59)

Thank you for having me. It's very fun to be here.

Hannah Cole (01:02)

so I'm a tax educator, but I come at it from the practitioner side, kind of boots on the ground with really most of my expertise developed around my clients who are decidedly not the 1%. And so when it comes to higher level things and policy and where, you know, our taxes as self-employed people primarily kind of

Ray Madoff (01:23)

Rosal.

Hannah Cole (01:24)

in to the larger system, I need help. And that's why I was so excited to talk to you.

Your book is outstanding. I hope everyone listening gets a copy of The Second Estate. It is fantastic.

Ray Madoff (01:38)

Thank you so much.

Hannah Cole (01:40)

my gosh. So can you start us off by just giving us a little background on a big question that I think is confusing for people is income versus wealth.

Ray Madoff (01:51)

Sure. so the question is it's sort of it's interesting. Income is the thing that you know, we get from our jobs and we get it from a lot of different places, but it's basically about the flow of money that somebody acquires. And wealth is more of a static number. It's how much how much do you own? So

Hannah Cole (02:14)

Mm-hmm.

Ray Madoff (02:14)

income is what are you taking in and how much do you own?

The reason it's little bit complicated in the tax world is that the word income in income taxes, the definition of income,

Hannah Cole (02:27)

Mm-hmm.

Ray Madoff (02:27)

excludes lots of income that ends up being the income of the wealthiest Americans.

Hannah Cole (02:33)

So you just touched something that really unlocked, think, for me, what I think is going to be the core of.

the learning from your book for people, which is what counts as income is a key to who we actually tax and who pays the most tax. And I think when I'm giving workshops about how self-employed people's taxes work, I'll write the rates on the board, 0 to 37%. And 37%, that looks kind of high. And then you add self-employment tax to that.

it looks even

Ray Madoff (03:07)

Yeah.

Hannah Cole (03:08)

higher. And so people are thinking, well, I guess the wealthy really actually pay quite a high tax rate. So could you kind of share with us, Professor Madoff, like why that is not quite how it works?

Ray Madoff (03:21)

Exactly. So first of all, your clients are right. They are the ones that are self-employed people are hit the heaviest with taxes. So they have income taxes, as you said, up to 37%. And on top of that, they have payroll taxes that are at about 15.3%. And those payroll taxes start right away at the first dollar earned. Unlike income taxes, which have pretty large exemptions.

In addition, payroll taxes can't be offset by things like charitable giving or other deductions. It's a so we call those the hidden taxes because people don't really they haven't really been educated about them. They're very surprised that they have them. They're kind of hidden. And even for employees of somebody else, people who aren't self employed, they are in some ways doubly hidden because they show up not as taxes on your

pay stub, but as these sort of funny FICA and FUTA and they're called contributions. They make it seem like people are saving for their own retirement, but this is actually money that is currently being used to pay for the Social Security and health care of current retirees. And so it is a tax just like any other tax, but it it's kind of hidden from the public. So

so people so somebody who is self employed and earned sixty thousand dollars will pay about thirteen thousand dollars in income taxes and payroll taxes. That's just to the federal government. That's a lot of money for somebody who's trying to get by on sixty thousand and then they pay state taxes on top of that. So

Hannah Cole (05:01)

for sure.

Ray Madoff (05:02)

now to answer your question, let's move over to other Americans, not people who work either for themselves or for others, but people who have

wealth and they've acquired it either through their investments, their investments have gone up in value, or through their inheritances. And here the tax system is very, very different. so for people who have, let's say that you're Mark Zuckerberg, right, who was many times over now centi billionaire, right? He's got the probably more than two hundred billion dollars.

But all of his wealth has not come from salaries, right? He's just a dollar a year guy, so he doesn't pay very much in income taxes or payroll taxes. What he has is a growth in value of his stock. And even though that growth in value of his stock has made him very, very rich, it is not treated as taxable income because we have a rule that gains.

are only subject to tax when they are sold. You have to sell the property and somebody like Mark Zuckerberg doesn't have to sell the property. He can simply borrow against his property and not sell it and therefore not have any taxable income.

Hannah Cole (06:23)

Amazing. Yeah, I think just to underline in case someone was listening and kind of missed the quick hit of that, he isn't paying based on earning, right? We who listening, you, me, everybody listening, we earn the money that we live on. Mark Zuckerberg is doing this other thing and living off the growth of his wealth, right? Yeah.

Ray Madoff (06:43)

Yes. And arguably

it is an earnings, right? But we don't in the tax code we treat it as a nothing until it's actually sold. As if

Hannah Cole (06:51)

Mm-hmm. Yeah.

Ray Madoff (06:54)

as if his life is the exact same as somebody who has nothing because financially, right? Because

Hannah Cole (07:01)

this.

Ray Madoff (07:02)

he because he hasn't sold it. And that's

Hannah Cole (07:04)

Yeah.

Ray Madoff (07:04)

a kind of a weird thing. It gets even weirder when we look at the income tax of inheritance or

Hannah Cole (07:11)

Yeah.

Ray Madoff (07:11)

somebody who

gets money from either a gift or an inheritance or a life insurance policy. If you were given ten million dollars

Hannah Cole (07:21)

...

Ray Madoff (07:22)

you're treated as if you have nothing. You don't have to tell anybody, you don't have to report it. it's just yours. It's your own private thing that somebody gave you ten million dollars. On the other hand, if you and I were to enter into a barter exchange, right? You were to make you know many fantastic silkscreen bags for me and I was to make sourdough bread for you

We would

Hannah Cole (07:48)

Okay.

Ray Madoff (07:48)

each be required to pay income taxes on the value of what we had received for our services.

Hannah Cole (07:57)

Yes.

Ray Madoff (07:57)

We'd have to we'd have to tally and report it to the government. But yet if we're handed ten million, that's just for you to know, private.

Hannah Cole (08:05)

Just unbelievable to me. I have to teach people this and sometimes

Ray Madoff (08:09)

Yeah.

Hannah Cole (08:10)

the example that I give, and it's frankly kind of ridiculous and I feel bad saying that this is how it works, but like a musician, and I've known many who basically like play session music in an Irish pub, like there's one in Boston that I used to go to all the time, the Burren in Somerville.

Ray Madoff (08:26)

Yeah, of course.

Hannah Cole (08:27)

And I was friends with a lot of the musicians there who would basically just pay for pints, right? So

Ray Madoff (08:32)

Right. Yeah.

Hannah Cole (08:33)

those...

Heinz, that beer that they're drinking all night, that's their only pay. That is a pretty meager living for very accomplished

Ray Madoff (08:40)

Yeah.

Hannah Cole (08:40)

musicians. And yet it is taxable income, the value.

Ray Madoff (08:44)

It was taxable, even the beers were taxable.

Hannah Cole (08:46)

Well, what I'm saying is that is a barter exchange. So technically, the tax code, that is barter. Yeah.

Ray Madoff (08:49)

Yeah. Right. Of course. Yeah. That's what it's all taxable to them. That's right. Yeah.

Hannah Cole (08:55)

So yeah, to

a point of ridiculousness, when you compare that to your example, if that's shocking. if somebody gives you $10

Ray Madoff (08:59)

Yes. Yeah. You find ten

you find a hundred bucks on the street, you're supposed to report it to the IRS, but somebody hands you ten million. Well that's your business. Now for the the non-taxation of gifts and inheritances and things like that, the theory

The reason that that exclusion was originally provided was on the assumption that we have an estate tax. An estate tax is a whole separate tax system that was supposed to apply to the richest 1% of Americans. Right now it imposes a tax at a flat 40% rate on all transfers in excess of a pretty big exemption, $15 million. So our $10 million gift wouldn't be captured by it.

Here's the thing about the estate tax. The estate tax so it looks like we have a system that's gonna do some pretty serious damage, right? If all of our rich people paid a 40% tax on everything that they owned when they died or that they gave away, that'd be a lot of money. But the problem

Hannah Cole (10:04)

Agreed.

Ray Madoff (10:05)

is that it has been 36 years since Congress has closed a single loophole in the estate tax. 1990 was the last time. And that's because

The estate tax was really essentially killed through a campaign that was funded by eighteen of the country's richest families. And many of your listeners might know the phrase death tax and a double tax that hurts family farms and businesses, right? There was this very powerful campaign that really turned the public against the estate tax, making them think it was unfair.

Because of course people didn't know about the lack of income tax. They just know, like, maybe this is a second tax on top of it all. And and because it loopholes haven't been closed, the estate tax raise is essentially nothing. And it's really just more something that people have to plan around rather than something people have to pay. And the evidence of it is in the fact that the

the estate tax, so estate tax supposed to apply to the richest one percent. Right now that group owns fifty-five trillion dollars. Fifty-five trillion dollars. This is a time when the total revenue the government takes in in 2025 was five trillion. And the wealth of the richest one percent was fifty-five trillion. Okay. How much estate and gift taxes did that one percent pay? Twenty-eight billion dollars.

nothing. Absolutely. Or point

Hannah Cole (11:37)

So that's moving that.

Ray Madoff (11:40)

zero six percent. Sorry, point zero six percent, yeah.

Hannah Cole (11:43)

Moving that decimal point from 40 % way, way down to under way under 1%. That's

Ray Madoff (11:47)

Yes, exactly. Yeah.

Hannah Cole (11:50)

shocking.

Ray Madoff (11:51)

Yeah. And so in and the reason that we know that the estate tax doesn't impose any harm on people, is that if in case you need any further inf reason than that number, but is the fact that when Trump had it in his full command to enact whatever tax rules he could, right, in the his most recent tax bill,

The Republicans had consistently been running on that we have to repeal the death tax because it's so immoral. He had the chance to do it and he didn't bother. And it's

Hannah Cole (12:20)

That's it.

Ray Madoff (12:21)

because he they know that it provides more cover for the rich because it allows for this very unfair income tax system that otherwise wouldn't withstand scrutiny. People would be like, Well, that's crazy. Why can you receive ten million dollars tax free but we have to tax the Burron guy on the on his pints?

Hannah Cole (12:40)

Yep.

Ray Madoff (12:40)

Doesn't make sense.

so I think that's how we kind of have gotten into that situation of not taxing inheritances.

Hannah Cole (12:47)

Man, it's just shocking that inheritances are not taxed. And I was just rereading the early chapters of your book this morning and reminded myself that a third of Americans on the list of 400 richest families are there simply because they inherited the money. That's not even them working ever.

Ray Madoff (13:05)

That's right. That's right.

Hannah Cole (13:08)

Unbelievable. So I think the arc of this conversation that I would really love, because I think

I'm seeing culturally so much of a sense of unfairness that people actually begin to check out and nihilistic, which I actually think is the enemy of progress.

Ray Madoff (13:24)

Yeah, yeah. I totally agree. I think that there is reason for hope.

Hannah Cole (13:30)

Yeah, I do too. So I do want to touch on how the wealthy actually avoid tax because I do think, you know, my company is called Sunlight On Purpose. Let's shine some sunlight on that one.

Then I, and I do have some questions for you because there is a midterm election coming up. A lot of people are proposing wealth taxes. There are

Ray Madoff (13:50)

Mm-hmm.

Hannah Cole (13:50)

some out there that may be better than others. And I would love to kind of land the plane near what you think we should do. So if you wouldn't mind just doing the sketch first. So I just want to warn the listener. not going to go down a black hole of how terrible things are and stay there. We're going to come out.

Ray Madoff (14:09)

No. Yes.

Hannah Cole (14:10)

But could you sketch

Ray Madoff (14:10)

Right.

Hannah Cole (14:11)

for us how the wealthy are avoiding paying taxes?

Ray Madoff (14:14)

Yeah. So basically there's just two main things. It's the so when you think about how most people listening to this podcast probably get their money, is they probably work for it, right? That's how most Americans get their money and they're subject to heavy taxes. People who already have wealth, either they were given it or they have been given stock and they you know they or they have stock in their companies. so they don't pay tax as their property goes up in value.

And if they need to access that property, they can borrow against it instead of selling it. So they can you know, many people are in the business of lending money and they are happy to lend money to very rich people who can provide a lot of security for their borrowing. Right? These things are f these loans are fully secured, nobody's worrying about not getting paid back. And so they

Hannah Cole (15:04)

Right, I'm the banker

and I'm looking at all of Mark Zuckerberg's

Ray Madoff (15:07)

Yeah.

Hannah Cole (15:07)

money. I'm not worried about him defaulting, really.

Ray Madoff (15:09)

Exactly.

And you're you're and you're thrilled to lend the money because you get interest and you know you have to offer them very favorable rates, but still the the loan is very strong. So that's that's your business model. So

Hannah Cole (15:20)

Sounds like easy money. Yeah.

Ray Madoff (15:22)

you want to be lending money and these are the perfect people to lend the money to. And so they don't pay any taxes. we call this buy, borrow, die, right? You you have an asset, it goes up in value, you borrow against it, and then you die.

It for those people who pass the property at debt there's like a little added benefit, which is that all the gains get wiped away.

Hannah Cole (15:45)

Yes, can we talk about that? I want to name it. It's called the step up in basis. But

we hide it behind this accounting term that most people don't know. So yes, will you explain that giveaway, step up in

Ray Madoff (15:55)

Yeah. So let's take our ten

million dollar person. Let's say that what I gave you, you got the ten I gave you ten million dollars of stock. I bought NVIDIA stock, Apple stock, something for very low. Now it's worth ten million dollars. And if I die and give it to you, you are treated as if you had purchased it for ten million dollars. So that ten million dollars of gain, I'm never subject to tax on it.

and you're never subject to tax on it. We sometimes call that the angel of death loophole, the step up and basis. But it it's a very, it's a rule that is, you know not really very fair given the numbers of our system, given the amount that can pass tax free, right? but people shouldn't think that fixing step up and basis will solve the problem.

Because that's just the frosting on the cake. The bigger problem is the fact that people have massive amounts of wealth that they've never paid taxes on and they never have to pay taxes on it. So I think a better rule would be the rule that they have in Canada, which says that whenever you transfer the property, whether by gift or at death, you just tally those gains. That's when you pay the gains. So that the person who had the run-up in value.

is the one who pays the gains, the same as the rest of us pay taxes on our other forms of income. Because so that would be that's one proposal for addressing that particular problem.

Hannah Cole (17:30)

Would that be called

a transfer tax?

Ray Madoff (17:33)

No, it would be called a it would basically be saying that it's a realization event.

Hannah Cole (17:39)

Okay.

Ray Madoff (17:40)

and so it's just saying that you realize gains not just when you sell, but also when you give the property away. Whenever you no longer own the property, that's when you tally those gains. Yeah. Yeah.

Hannah Cole (17:52)

Got it. Okay. Yeah, that sounds really fair. And they do it.

I love hearing that they already have this rule in Canada. It's hard to make

Ray Madoff (18:00)

Yeah. And

Hannah Cole (18:01)

it, but it's impossible.

Ray Madoff (18:02)

and there's also something kind of fun about this rule, which is that it was proposed both by President Obama and by President Richard Nixon. Yeah. It's

Hannah Cole (18:15)

Interesting. Huh.

Ray Madoff (18:16)

a it's really something that's kind of like a basic fairness thing, like why should we never tax those gains when we're taxing the barter exchanges? We're taxing found money on the street.

Right. So we should tax it to that person, we should tax it upon transfer. The other issue is about people who inherit money or receive it by gifts or because lots of this money is some of it is received at death of somebody, but a lot of it is that money is put into trusts. These trusts are huge. The trusts make distributions and basically much of those distributions are received entirely tax free. And why should that be the case?

Why should we say that somebody that is given five million dollars a year from their trust, why should they be treated as the same as somebody who has nothing? It doesn't make sense. So so

Hannah Cole (19:07)

Agreed. Agreed.

Ray Madoff (19:09)

that's what we should do and we and and we should get rid of the estate tax because it's not doing anything. And

Hannah Cole (19:15)

Hm.

Ray Madoff (19:16)

yeah.

Hannah Cole (19:17)

I have a question for you about that. So I agree with you. It is providing cover to the more educated person who even is aware that it is there for tax fairness, or in theory is there for tax fairness. It provides some cover for an unfairness elsewhere in the system. But do you think politically that it would be possible fix the estate tax?

Or is it an easier fight

Ray Madoff (19:43)

No.

Hannah Cole (19:43)

to get rid of it?

Ray Madoff (19:44)

The reason I don't think it's possible to fix the estate tax is that

Hannah Cole (19:48)

Mm-hmm.

Ray Madoff (19:48)

there is a little bit of incoherence built into the estate tax. For somebody who has worked their whole life and has had a lot of taxable income, right? Let's say Paul McCartney, right? He's probably he's very, very rich, right? But he's probably paid a lot of taxes on that money because

It's from, you know, things that are all taxable, I assume, mostly. and the way the estate tax is structured, the way it it is, and so the way it looks to the American public is now you're dead and now we're slapping on an additional tax. It just doesn't it feels weird in that situation, right? To be taxing that person. Now, of course what people don't focus on is who really is.

Getting the economic benefit of it, and that's whoever is receiving this property. But the tax is imposed based on the amount of wealth that the person has, right? As opposed to the amount of wealth that of the people who receive it. An income tax system is a much more coherent system and one that people can understand because now we're not talking about double tax. We're talking about the fact that an entirely different person has been handed.

you know, couple of million dollars. And

Hannah Cole (21:09)

Mm-hmm.

Ray Madoff (21:10)

we should decide how much people should be able to inherit entirely tax free. If we want to have a preference for inheritances, that's fine. I understand that we want people people want to have, you know, they people want to be able to provide for their families. And so it makes sense

Hannah Cole (21:27)

Of course.

Ray Madoff (21:27)

that we can say, fine, we'll have a preference for a certain amount of inherited income, but we should recognize that it's a preference. And then when we say

How much should inherited income be preferenced over income from work? Then we we'll get a different type of number rather than this other discussion about well how much should the second tax be on somebody who's already paid a lot of taxes? Does that make sense?

Hannah Cole (21:51)

Yeah. Yeah, I

feel like in the tax code, you see this a lot. Look over here, not over here. And it kind of falls in that category.

Ray Madoff (21:57)

Yes, exactly. Exactly.

And that's why I think that by simplifying the system, right, and bringing it all into the income tax, then everybody can understand a little better how the system works.

Hannah Cole (22:11)

Yeah, I like it. I like it. And it makes it simple, and it makes it feel fair. So there's a lot of buzz. California has a wealth tax proposal. Everybody's talking wealth taxes. And

Ray Madoff (22:23)

Yeah.

Hannah Cole (22:24)

I think that's the easy kind of go-to phrase that makes you understand what the project is. But there's some issues with the wealth tax. Can you kind of talk about what the issues are, and maybe talk about if you are able?

What do you think of the California wealth tax? What do you think of Mamdani's Pied-a-Terre tax in New York City? And what would work better?

Ray Madoff (22:47)

Right. Okay. So the wealth taxes, we first heard about them from Elizabeth Warren and Bernie Sanders, right? We should have wealth taxes. A wealth tax is a tax on the amount of wealth that a person has. So it in some ways makes a lot of sense, right? Because we have a lot of very, very rich people. Many of them have not have been able to avoid taxes on them. Some people have paid taxes on it, right? But most of them

haven't. So the idea is, well, let's just tax the wealth if that's the problem, that they're able to acquire the wealth tax-free. And the problem is that when you it it's sort of like a lot of answers that like, well this makes sense, like I call these kind of round one answers, you know, it's the one that makes the most sense and let's just do it. They often

When you push them a little further, they often are a little less satisfying. And so the wealth tax has some pretty significant problems. on the state level, the problem is that very it's very, very easy for people to leave states. And so I live in Massachusetts, you know, Massachusetts, New York, California, we've all lost population to Texas, Florida, you know, tax free states. There's competition among the states. So it's very hard.

for states to impose these sort of taxes that are disproportionate to their sister states. It's just a fact that people can easily move out of a state. Not

Hannah Cole (24:19)

Yeah.

Ray Madoff (24:19)

everyone's gonna move, but I think it could still have an effect on decisions of others whether to set up shop there or in another state. You know, we have to I live in Massachusetts, I love Massachusetts, I'm happy to pay Massachusetts taxes. But

I appreciate that not everybody's gonna feel that way. And so we probably lose business to New Hampshire, you know, and so

Hannah Cole (24:42)

Yeah, for sure.

Ray Madoff (24:43)

and so that's a problem for states. Yeah.

Hannah Cole (24:46)

Yeah. You're speaking

to someone who is the product of the Massachusetts public school system, for which I'm very grateful. It's actually who I dedicated my book to, is the taxpayer But I do,

Ray Madoff (24:55)

Wow, that's great. That's wonderful. Yeah.

Hannah Cole (25:00)

as an accountant, someone who's very aware of how my industry profits off of people's lack of education about how their taxes work, I picture such a ballooning mega industry of wealth calculation.

wealth valuation from accountants,

Ray Madoff (25:16)

Well there's another yes.

Hannah Cole (25:18)

know, valuing the amount of wealth you have is quite a heavy burdensome task. That's kind of a lot to ask much harder than meets the eye.

Ray Madoff (25:27)

I totally agree. It's also, I think, going to feel even to the people who aren't subject to it, it's going to feel invasive. Because

Hannah Cole (25:36)

Mm-hmm.

Ray Madoff (25:37)

we are h as a country, we have not been used to doing annual assessments of people's wealth. We do certain things, we assess the value of their homes and their cars, but that's very different than tell us the value of everything that you own. And so it has a type of an intrusive aspect of it. I think

I'm not sure the public is there yet in supporting it. one other thing to note is that on the federal level, we have an even bigger problem, which is that the federal are the constitution has a provision against direct taxes and there's some question about whether wealth taxes would violate this provision. And the Supreme Court had a case in a couple of years ago where they basically said, Yeah, we might very well find this unconstitutional.

They didn't say it in so many words. So I think given the makeup of the current Supreme Court, if we spent all of our political capital to get a wealth tax, it could be a very sad end if a year later the Supreme Court found it unconstitutional and then we had not solved the problem through other means.

Hannah Cole (26:43)

Bingo. I couldn't agree more. And I love your solution, which feels inherently fair to bring income into the income tax system that is currently just given a pass as though it's not income. Yeah.

Ray Madoff (26:55)

Yeah. Right. Exactly.

Hannah Cole (27:00)

I love it. So in a little lightning round, do you have any kind of pros or cons about the California wealth tax, the New York City tax?

Ray Madoff (27:09)

Yeah, so

I mean the Califor you know, look, I'm there's certain things about the California Wealth Tax that I love, which is that I feel that it's educated the public about this issue.

Hannah Cole (27:16)

Mmm.

Ray Madoff (27:17)

And so, you know, I'm I'm a fan of that. And I think that one thing I learned from my book is how good tax reform proposals came about when there was fear by others that worse proposals would take place. So in the time it was like really so when

When socialism was a very big threat in this country in the early part of the twentieth century, and when communism was a very big threat in the nineteen thirties, right? That's what enabled us to get the modern day income tax, estate tax, and then the whole system of Social Security. So, you know, so in some ways I'm all in favor of more aggressive proposals being out there because I think that they increase the likelihood of having more sensible.

practical proposals actually being adopted. So

Hannah Cole (28:08)

Agreed, agreed. I

love it. Any thoughts on the New York City tax?

Ray Madoff (28:13)

the Pied Terre tax?

Hannah Cole (28:15)

Yeah.

Ray Madoff (28:15)

Yeah. Not I mean that's you know, people like to live in New York and so it's a little and it of course it's and it's just housing. Housing is already subject to tax. So you know Right.

Hannah Cole (28:24)

And it's only second houses. It's not primary residences, which.

Ray Madoff (28:28)

Right. So it seems like it's it's fairly well targeted for the thing they're trying to get at, which is people who don't live in the state, so they're generally not paying taxes in the state, but they want to enjoy the benefits of New York City. So

you know, I don't I don't have really strong feelings about it, but it certainly seems like something that's less likely of course it's not gonna raise the revenue of the California wealth tax. So it's a little bit of a s it's a kind of a a small a small bore item, but you know, but it seems like it's could work for something.

Hannah Cole (29:01)

Yeah, I hear you. Yeah, and I like, you said well targeted. And I do want to kind of double click on that term because I do think there's this idea out there that, we're going to do some ham-fisted, really unintelligent tax proposal. And actually, you can make a well-tailored tax law that hits the right people.

Ray Madoff (29:19)

Absolutely. Absolutely.

Hannah Cole (29:21)

We have a capital gains exclusion when you sell your primary residence on purpose because people have to do that. But if you sell a

second home, third home, fourth home, that's when bigger taxes kick in. So you can tailor things. Yeah.

Ray Madoff (29:35)

Right. Absolutely. Yeah.

Hannah Cole (29:38)

I love it so much. So first, I just want to thank you so much, one, for taking the time, Professor Madoff, being with us today. And also just this book, The Second Estate, How the Tax Code Made an American Aerosocracy. You know, I don't have the visual. But I read it twice.

Ray Madoff (29:50)

You have a do you have the book there or you or you're looking at a piece

Hannah Cole (29:56)

I read it twice. It's only five hours And it's so enjoyable.

Ray Madoff (29:56)

He thought wonderful. Yes. It's very short, yeah.

Hannah Cole (30:00)

I think a lot of people are scared of a tax book. So let me just say

Ray Madoff (30:04)

Yeah.

Hannah Cole (30:04)

to the listeners, it's so pleasant, enjoyable, accessible. It explains things. And so it's a great way to get educated. I could not believe in that more. So thank you for your effort on that. I feel like you've really put some great ideas out there into the ether. And now I want people to eat them up.

Ray Madoff (30:23)

Thank you

so much. It's wonderful meeting you and thanks for all the great

Hannah Cole (30:26)

Awesome.

Ray Madoff (30:26)

work you're doing.

Hannah Cole (30:27)

Thank you so much. I really appreciate And keep in touch. Maybe we'll see each other in Boston sometime. All right. Thank you so much. Take care.

Ray Madoff (30:31)

Yes. Wonderful. Okay. Bye bye. Okay.

Yeah.

Hannah Cole (30:37)

I hope you enjoyed that conversation with Professor Madoff as much as I did. I really highly recommend her book, The Second Estate. I read it twice. It's only five hours on audio format and super readable. So highly recommend. And I also want to just point you once again to my Tax the Rich Quick Facts website. So if you want to

Push the needle forward, build a movement with me, with Professor Madoff. go to sunlighttax.com/taxtherich. And I have a bunch of quick facts in case you want to pull out nuggets from today's conversation to talk to your friends about, just to have at the ready some some stats, some knowledge, some quick facts, and some next steps. I have put that all together for you on a website, sunlighttax.com/

taxtherich. Also, while you're there, if you want to sport the message to your friends, as you know, I live in Asheville, North Carolina, and my studio was completely destroyed in all 20 years of work that was inside it during Hurricane Helene. And I am running a small fundraiser selling tote bags that say tax the rich. You can buy one.

For $25, or you can buy five for a hundred dollars and be mega super studio supporter, and that will help me buy the supplies that I lost and get started making art again. I've had a lot of friends buy the five tote bags, and I have seen people on Instagram tagging me as they give the totes away to people on the school board, people at the arcade as a prize for game night.

so it's really exciting to me to start seeing those tote bags out in the world. They're really fun. And I printed them by hand right here in my office at Sunlight Tax. So if you want one of those and you want those tax facts to share with your friends, please share this website with anyone and buy a tote bag if you feel moved to support me rebuilding my studio at sunlighttax.com/taxtherich. Thanks.

Get Free Money By Using Your Retirement Accounts

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“If there is one single habit you can have in your life to build financial security for yourself, and frankly, to get free money that’s on the table, it is to max out your tax-advantaged accounts every single year.”

— Hannah Cole

In this episode of the Sunlight Tax Podcast, I revisit why tax-advantaged accounts are one of the most powerful tools for self-employed individuals. I break down how these accounts can help you save more money, lower your tax bill, and build long-term financial security. I also share practical examples, real numbers, and details about my upcoming class so you can make the most of the tax benefits available to you as a freelancer or business owner.

Also mentioned in today’s episode:

00:10 Embracing Summer and Financial Reflection

02:50 Understanding Tax-Advantaged Accounts

06:05 Maximizing Retirement Savings with SEP IRAs

08:50 The Power of Productive Friction in Learning

11:58 The Power Triangle for Financial Growth

15:10 Strategies for Effective Tax-Advantaged Saving

17:55 Upcoming Class: Save Like A Millionaire

If you enjoyed this episode, please rate, review and share it! Every review makes a difference by telling Apple or Spotify to show the Sunlight Tax podcast to new audiences.

Episode Links:

Join the Workshop:Save Like a Millionaire: Using Tax-Smart Accounts

Get my Tax Help on Substack

Get your FREE visual guide to tax deductions

Order my book: Taxes for Humans: Simplify Your Taxes and Change the World When You’re Self-Employed

Watch YouTube video version

Transcript:

Hannah Cole (00:07)

Hello, beautiful. Happy summer. So I have been taking a little time. I hope you have too. I hope you're enjoying the summer wherever you are. but today I want come to you with something that I like to revisit every summer because the summer is sort of a non urgent time when it comes to taxes, and you can

Put some thought into the things you want in life, the things you want to do. And ultimately, the point of saving money, the point of investing, is to be able to enjoy your life, to be able to spend time doing the things that you value and want to do. And that's all to the good, right? So I don't think enough of us, especially in creative fields, think about the power that our money gives us and our ability to show up.

Fully in our values when we have money and it being important for that reason. But it is, and your work is important. And so that's why I want to talk to you today about the incredible power of tax advantaged accounts. So let's get into it.

So, what are tax advantaged accounts? what I'm talking about here is things like a 401k, a SEP IRA, a traditional IRA, Roth IRA.

But there are also tax advantaged accounts for healthcare, childcare. and HSA is a secretly incredibly powerful health savings account, which gives you a tax benefit. And the point of tax advantaged accounts really is to give you a big boost of tax savings to literally and actually put dollars in your pocket that you can then put into those savings. So these are not some corrupt.

Bad tax scammy thing. They are, in fact, a deliberate incentive put into the U.S. tax code to encourage taxpayers like you and me to invest in ourselves, to save for retirement, to save for health care, to save for education. All right. So they're really good. You are doing something positive civically when you use tax-advantaged accounts. and

Not only that, but you get this tremendous financial benefit when you do. So it really helps to know what the rules are. But here's the problem when you work for yourself, when you are self employed, you get busy, right? It becomes a thing so often that just falls to the bottom of your to do list. And I know what an awful problem that is. It's happened to me. And so I really want to come to you today with some good information that's going to help you and also tell you about a class I'm teaching.

Actually, today at noon, if you want to sign up, there's a link in my show notes, or you can go to sunlighttax.com/workshops You want to get in on it before noon Eastern today, the day the podcast drops, June 23rd, or you can get the class after it's happened in recorded on-demand format. and that's fine too. So I want to take a minute to help you understand these accounts and how much benefit they give you because

If you're not using them, you are really leaving money on the table and missing out on a lot of money that you could have for free. A lot of money you could be squeezing out of every dollar you have without working harder, right? Just by taking an hour this summer to set some stuff up. Okay? So let's get into it. The problem is when you're self-employed, you get really busy. You have too much on your plate. So it's a little hard to know.

Where to go for good information and you don't want to wade through so much technical detail. Am I right? Also, there's no employer setting these accounts up for you, which is another, you know, that's a big deal. That's a real problem. it's really nice when this is just given to you, handed to you by your workplace. And it's not when you're self-employed.

I think it's also hard when you have really uneven income, like I do. Good years, bad years, you know, income goes up, income goes down. That can also make it feel difficult to maintain a habit of putting as much money as you can into these accounts because it can feel like, well, this year's very different from last year. You can't just set it and forget it in the same way you could if you were working off of

the same salary coming in every two weeks. Okay. So I'm here to help. Okay. do you handle that, right? So tax advantage accounts give you a bunch of extra money in the form of tax savings, which you can literally take directly from that tax savings and put into investments. Or you can, you know, use it to pay off debt, use it to pay for other things. Doesn't matter, but it's money in your pocket.

Deliberately when you save. Okay. When you save through tax advantaged accounts. Mostly I want to talk today about retirement accounts because those are kind of the big guns. The other kinds of tax advantaged accounts exist. They're great. I want you to use them, but the biggest one, the most money on the table is from retirement accounts. So let's focus there. right. So I just want to give you a little bit of a sense of the numbers, like how much you can actually save.

With these accounts. I know it's really helpful to me to see real numbers to make you feel concrete. Okay. So I want to give you an example. This is very rough and simplified, right? To keep you away from tons of tiny tax details, but a very simplified example of someone who's self-employed and has a profit of $100,000. I'm using a nice, even, round number on purpose. Okay. So if you had.

If you were single without any other types of income and your income is $100,000 in profit from your self-employment, what would the tax savings be of putting the maximum into a SEP IRA? I'm using a SEP IRA here because it's frankly one of my very favorite retirement accounts for self-employed people.

It has a maximum amount of flexibility. You can contribute the max one year and contribute nothing the next year. And that kind of lack of paperwork and maximum flexibility, that is the reason I love it so much for freelancers. So quick little takeaway for you today is a SEP IRA is like gold. Okay. It's my favorite one. If you have self-employment income over about $40,000.

Why do I say that? Because below that threshold, you've got a bigger allowance, contribution allowance in a Roth or traditional IRA than in a SEP IRA. And so there is sort of an income limit breakdown where one is better than the other. Okay. But if you're making $100,000, your contribution limit in a SEP IRA is higher than a traditional or Roth IRA. All right.

So if I have $100,000 in self-employment income, I'm single, nothing else happening in my tax return. And I put the maximum into my SEP for 2026, it's about 20% of your freelance income. There's a little bit of details, noodly details that make it not exactly 20%. So the actual amount I can put in, according to the math I did, is about $18,587. Okay.

We can call it 20%. It's a little less than that. Okay. So putting in that max, I would pay $19,474 in taxes. Now, without a SEP IRA, just the taxes I would owe on $100,000 in freelance income would be $22,365 in taxes. So in other words, for putting the max close to $20,000, actually.

$18,500 into a SEP IRA in 2026, my tax savings, just federal tax savings, is $2,891. Okay? So almost $3,000 that I just get as free money for maxing out my SEP IRA. The other important thing to note here is that the SEP IRA, when I max out that money, I put the $18,000 in, I'm putting it in for myself. It stays mine.

The the deal is I'm just putting it on a high shelf and saying this is money I will use for financial security, right? You can call it retirement, let's call it financial security. We all know we need that. So it's still my money. I'm not giving it to the government. I am keeping it for myself. So that is the benefit. And I get $3,000 bonus money for doing that. This is a pretty great deal. Now if you add in your state.

States vary. Not all states give you a tax benefit for retirement savings, but some do. I live in North Carolina, which does give me a benefit. And I would get about $750 extra dollars for that contribution on top of the $2,800 I would get in a federal tax benefit. So that would give me about $3,600 of tax savings of money I'd get directly back from taxes. So it's a really

Really big deal, right? I really want you to kind of clock what a big savings that is. So there's this term I heard recently called productive friction. it's apparently a term they use in education to describe the kind of struggle that makes information stick.

This is something I'm thinking a lot about in the age of AI because I think you know, when AI makes everything easy for you, then no information is gonna really lodge in your brain when you always know you can go look up the answer. And to me, as someone who has struggled, I mean really struggled for 25 years as a working person, I have set up and had almost every kind of retirement account that exists.

You know, I had a day job, my first job out of college, there was I had a 403B, which is like a 401k, but for a nonprofit institution. And after that, when I went freelance, I had a traditional IRA, I had a Roth IRA, I had a SEP IRA, and now years later, I have a solo 401k. So I've had just about every kind of account you can have. and yeah, that productive friction that like

Difficulty of having to figure each one of those out and experiencing some mistakes and trips along the way. This has really taught me. So I feel like I know this like the back of my hand, frankly, because I've struggled with every piece of it. So I got some opinions and I also, from working with a lot of clients through tax season,

This was maybe the number one thing that I would slow everyone down on and force every client to have a conversation about retirement savings. I would sit there and do the math and say, Did you know that if you max out your IRA this year, you'll save this amount of money? And doing that actually got a lot of my clients who would not have put money into savings for themselves and investment for themselves. It got a lot of them to do it. So I'm really proud of how pushy I've been.

Frankly, in getting people to save money for their financial security and invest it. It's something that I love teaching and talking about. It's something I don't think is common enough. And so this is kind of my passion.

So in my program Money Bootcamp, I have this thing that I call the power triangle. And what the power triangle is, is three skills that when you use them together, grow your money, grow every single spare cent you can out of money that you're already earning, right? So in other words, the power triangle is the way to squeeze more out of every dollar you have. So the power triangle

The three parts of it are one investing, two year-end tax planning. So finding all the tax-advantaged accounts you could be using and making sure every dollar that can be in them is in them. And number three is saving like a millionaire, using and knowing the rules of tax-advantaged accounts. All right. So I really

care that you know what those rules are of tax-advantaged accounts and how much benefit they give you. I hope that that little example I gave you saving close to $3,000 when you put the maximum in to a SEP IRA for 2026, I hope that kind of crystallizes like the kinds of dollar amounts we're talking about here. Okay. Those are going to vary of course depending on what your level of income is, what your level of contribution is. But

When you do nothing, you're gonna have anxiety, you're gonna have fear, and you're not gonna be building savings, right? So it is really important to use these accounts just to build that financial security. And if there is one single habit you can have in your life to build financial security for yourself, and frankly, to get free money that's on the table, it is to max out your tax-advantaged accounts.

every single year. Okay. That is the one rule that will just get you free money and grow your savings, grow your investments faster than anything else. Okay. So if that is the big takeaway for today. if you take only one thing.

The second thing that I want to say as a takeaway is that when you put the maximum amount of money or any money into a tax-advantaged account, you're putting that money in it into an account that is yours. In other words, you're not paying it to some other entity. You're not paying it in taxes. It's not leaving you. It stays with you. It grows. It becomes wealth, right? And so I think.

What people see is, I'm putting $18,000 into a SEP IRA. I can't access that now. Well, that's true. You are agreeing with the government that you're gonna let it sit in that account and grow for a while, right? For a long while potentially. But it is your money ultimately that you have control of, you have access to, you make all the investment decisions on. And it's growing so that it is there for you, right? you're just moving it from the

money owed to the government column into the money going to me column. Okay. So that is the second takeaway I want you to have. Yes, it does mean cash you're not accessing today, but what it means is this is cash that's going to build and grow for you tomorrow.

If you're curious, when you take that money that's in your SEP IRA, traditional IRA, you also need to make sure that you have that money, you have to make some investment decisions. The second step here is investing. And that's really an important element of this equation. But when you invest that money, and let's just say at 8% annual compounded interest rate, which is kind of a generally accepted.

rate of return when you have money invested in, you know, stocks, right? diversified stocks. When you have money returning compound annual interest of 8%, $18,500 from the sample scenario that I gave you before becomes $1 million in 20 years. That's pretty amazing. And in 40 years becomes five million dollars. That's enough money to feel secure.

In your life to be fully retired, to not have to work anymore, right? This really is the path to building wealth, to building security. So it's exciting, I hope. To me, it's exciting. I hope it's exciting to you. And I want to give you just a couple of tidbits that I think are kind of interesting strategies that have been things that I've advised clients through the year and just things I want you to know. So, did you know you can have both

A Roth IRA and a traditional IRA? you don't have to make a decision one or the other, and that's it. You can actually split your contribution between two accounts in a single year, right? Or you can toggle back and forth between using a Roth this year and a traditional IRA next year, right? So there's a lot of flexibility that you can use and have.

which is really helpful to know about when you're self-employed and your income goes up and goes down, and you need to make pivots year to year, depending on what your income situation looks like that year, right? So there is actually quite a bit of flexibility that you are allowed within this system, but you have to know the rules. That's the key. Another thing I want you to know is that a SEP IRA.

Is a fantastic option for people who are self-employed and can potentially have a higher contribution limit for you than a traditional or Roth IRA, depending on how much income you make. If you make more income, a SEP IRA starts to become a better option. Okay. So I totally understand the overwhelm of feeling like you don't have the help of an employer who's gonna set all this stuff up for you.

And that is why you need some guidance. Here's what's out there. Here's what's good for a freelancer. Here's how those rules work. Here's what it does. Here's to what what to watch out for. And guess what? I'm teaching a class on that. All right. So if you're catching this podcast right when it drops, on Tuesday, June 23rd, today at noon Eastern, I'm teaching a class on saving like a millionaire, which is all about these tax advantaged accounts, how they work.

what the savings are, what the best options are for you. And I'm going to be answering questions, plus giving you a really awesome outline and a bunch of resources that will be helpful so that you walk away with next steps. Okay. So that class is today. If you are listening to this and it's afternoon on the 23rd, you can go to that same link and you can buy the class and just watch it on demand. It will not it'll be the recording in that case.

And of course, you can't ask me questions live, but you'll still get all the resources, you'll get the recording, you get it on demand. This is a one-hour class, it's a $97 investment. So yes, it's a paid class. That also means it's a really small class. There are only a handful of people who are registered currently. So I do think there will be some ability for some real one-on-one attention. and you'll be able to ask your questions. So I do encourage you to come to the class if you can.

Or get the recording because I don't know about you. Sometimes I feel a little more leisure in the summer. These tax decisions feel a little more distant, but I encourage you to use this time to learn a skill that will get you free money that's sitting on the table and make sure it's going in your pocket and into your investments and building wealth while you sleep rather than just going out the door in the tax bill you pay every year.

Okay, so let me help you save a ton of money if you're interested in this class. You can go to sunlighttax.com/workshops to join the class or click in the show notes. I have a little quick like link to the checkout if you want to just have a one-click option. All right. So I hope this episode has given you some tidbits about the tax savings you get from tax advantaged accounts. And if you want the deep dive, then come to the class today or get the class recording.

I cannot wait to help you get more money.

Anna Burgess Yang: Why Self-Employment May Be More Secure Than a Traditional Job

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“It's stressful to work for an employer and it's stressful to work for yourself. It's just like choose your stress.” – Anna Burgess Yang 

In this episode of the Sunlight Tax Podcast, I sit down with Anna Burgess Yang to discuss her journey from corporate banking to solopreneurship. We explore the skills that helped her make the leap, how she approaches business decisions and financial management, and what it really means to navigate risk as a self-employed business owner. Anna also shares practical insights on freelancing and building a sustainable solo business while having effective financial planning. 

Also mentioned in today’s episode:

00:10 Introduction to Solopreneurship

06:01 Transitioning from Corporate to Freelance

10:25 Common Mistakes Solopreneurs Make

12:26 The Risks of Employment vs. Self-Employment

17:10 Current Economic Landscape for Freelancers

22:20 Navigating Career Pivots

28:04 Financial Management for Solopreneurs

If you enjoyed this episode, please rate, review and share it! Every review makes a difference by telling Apple or Spotify to show the Sunlight Tax podcast to new audiences.

About Anna Burgess Yang:

Anna Burgess Yang is a freelance content marketer and journalist specializing in B2B SaaS and fintech. She is also a solopreneur educator focused on back-end business operations. A former corporate executive, she now writes long-form content for clients. She also maintains her own blog, newsletter, and a tutorials site. Within her content, she teaches other solopreneurs and marketers how to use AI and automation to work more efficiently.

Check Out Anna’s Work:

FREE RESOURCE: Budget Health Check

Anna’s Instagram

Anna’s LinkedIn 

Anna’s YouTube Channel

Episode Links:

Join the Workshop:Save Like a Millionaire: Using Tax-Smart Accounts

Get my Tax Help on Substack

Get your FREE visual guide to tax deductions

Order my book: Taxes for Humans: Simplify Your Taxes and Change the World When You’re Self-Employed

Watch YouTube video version

Transcript:

Hannah Cole (00:00)

Anna Burgess Yang, thank you so much for being on the Sunlight Tax Podcast. Welcome.

Anna Burgess Yang (00:05)

Thank you so much for having me.

Hannah Cole (00:07)

I'm super excited to talk to you. I feel like we have a lot in common, but I really wanted to start by just asking you to give the listeners of the Sunlight Tax podcast a little bit of your story. Will you tell us kind of what the journey is that brought you into solopreneurship?

Anna Burgess Yang (00:25)

Sure. and it's not a traditional path or or the place

Hannah Cole (00:28)

Yeah.

Anna Burgess Yang (00:30)

or the place that I really thought I would end up. so

Hannah Cole (00:32)

Yeah.

Anna Burgess Yang (00:33)

I started my career in banking. I actually worked at a bank for six years. and then

right out of college went to work at a financial technology company that worked with banks. So I was still in the space, but working as a technology provider and helping banks and credit unions across the US implement enterprise software. And I stayed at that company for 15 years. So long time.

Hannah Cole (00:59)

Wow.

Anna Burgess Yang (00:59)

Right around or during the pandemic, like many people, I was kind of thinking, what else could I do with my life? and it really wasn't something I had considered up until that point because the company, it was small, it was very had very flexible work. that was it was just a great fit for me that way. But during the pandemic, I really started to just rethink like what do I want to do? Is this is this what I want to be doing? Is this the company I want?

to be at. The answers to all those things were no. I didn't want to do that anymore. And so I started thinking what else can I do? Because I that was my first job out of college. I hadn't done anything else. So I don't know how exactly, but I somehow landed on content marketing that people would actually pay me to write for companies. So I got a job at a marketing agency and quit my tech job.

And so I was writing mostly for other technology companies in kind of a variety of spaces through this agency. I was only at the agency for about eight months. The agency just was not a good fit, and I got a job at a different agency, but in more of an account manager role. So doing different type of work and not writing. And I was at that company for about a year and got laid off. And

At that point, I had been considering going out on my own. Something I'd really never thought about at any point in my life, because with a banking background, I'd always been told that self-employment was risky. But

Hannah Cole (02:33)

Mm.

Anna Burgess Yang (02:34)

at the time that I got laid off, it seemed like full-time employment was risky. in the tech industry in particular, people were getting laid off right and left. And so

I thought I'd I'd started thinking, like, what would this look like if I went out on my own and and did that? And so when I got laid off, I'm like, well, here's the chance. The

Hannah Cole (02:56)

Yeah.

Anna Burgess Yang (02:57)

opportunity has presented itself. The timing wasn't my decision, but I think it was a direction I was headed anyway. So I started

Hannah Cole (03:03)

Mm-hmm.

Anna Burgess Yang (03:04)

my own freelance writing business, writing for technology companies. And on the side, I

Create resources for fellow solopreneurs

because that is something that I'm just very passionate about. I feel like my background coming from company they came from and the the banking experience and things like that give me a really unique perspective on starting a business. I didn't I didn't make some of the same mistakes I think some solopreneurs make just because I had that background. And so I really wanted to kind of

provide education, talk a lot about tools and technology and things to make work easier. So I create resources and host webinars and workshops and things like that for fellow solopreneurs.

Hannah Cole (03:51)

I love it. I really love the way that it does feel like you are helping to kind of lead people through the terrain of solopreneurship. Like this article, gosh, there's so many that I want to ask you about. But I was just reading this article you wrote about skills that you got from working in a corporate environment and how helpful they were in being a solopreneur. And you just reference like the mistakes that you see people make. So

Can you just outline some of those mistakes that you see solopreneurs make or just struggles that people have when they strike out on their own? because I think your kind of experience is really has a lot to bring to

Anna Burgess Yang (04:27)

Yeah. and yeah, and one one thing

one thing in particular that I'll that I'll add to my corporate experience was when I left, I was an executive. So not I wasn't an individual contributor anymore. I was part of the team that was making decisions about the finances of the company, about the strategy of the company. And so one of the things I see solopreneurs struggle with is decision making. Like suddenly you are in charge.

And everything falls on you, which has benefits. You can change direction. You can try something new. You're not stuck in like red tape that often comes with corporate decision making, but also you're assuming all of the risk. And so some things I see solopreneurs struggle with is they're just not comfortable making decisions, so they don't act quickly, or they just take too long, or they don't make it at all because they're afraid. or that they make decisions like kind of

too quickly and then they're constantly shifting and they're not letting like a decision settle and really decide is that the right thing and getting data. They're just they're constantly bouncing between decisions. So that's something I think solopreneurs struggle with a lot. Another one

Hannah Cole (05:39)

Yeah.

Anna Burgess Yang (05:40)

is like investing in your business. And that it's but I what I mean by that is I pay for a lot of tools

that make my work more efficient because I recognize trade-off is more time for me to do higher value work or spend time with my family or take a nap or whatever you know, but but I think a lot of times solopreneurs they're so they they want to keep their money, right? You know, they and so paying for tools seems like they something that seems like a risk or they just don't want to, they want but they don't recognize that that lets them do other things that could bring more money into the business.

and a third thing, which I know you talk a lot about is just being uncomfortable with money.

Hannah Cole (06:19)

Mm-hmm.

Anna Burgess Yang (06:20)

and not knowing how to budget around unpredictable income or not even sure like how to keep track of like income and expenses and some things. If you've never done it before, there's not a good foundation for it. So those are some of

Hannah Cole (06:34)

Yeah.

Anna Burgess Yang (06:34)

the big things that I kind of talk about a lot is, you know, kind of those executive skills, kind of those

operations skills and then financial skills.

Hannah Cole (06:45)

Yeah, I appreciate that a lot. I think both you and I have served some time as a project manager and I feel like

Anna Burgess Yang (06:51)

Yes.

Hannah Cole (06:52)

that's a really useful I've never been an executive, but I I mean except of my own company, but that project management was so difficult and so valuable. Like I really appreciated managing other people timeline and budget and that being so clearly something that I needed to keep careful control of. because man, is it helpful.

When you work for yourself.

Anna Burgess Yang (07:16)

Yes. And I was a a

product manager, which is a lot of project management as part of my job. And so I knew when I started my own business, like the day I had two clients, I'm like, I need to figure out how to project manage more than I need to build a system that can handle more than one thing. And it has to be able to continue

Hannah Cole (07:36)

Wow.

Anna Burgess Yang (07:36)

to grow with me. You know, I can't just wing it anymore with making sure that things are done on time and, you know, keeping track of

multiple client preferences and ways of delivery and all of that. So for sure, project management is a whole big thing that a lot of people, if you've never done it before, it's it's a very kind of foreign concept.

Hannah Cole (07:58)

For sure, for sure. I was just also reading another one of your articles. By the way, I haven't mentioned your sub stack. It's called Work Better. and it's great and anybody who's listening should definitely subscribe to it. but one of the articles like a headline that really grabbed me was the that people don't talk enough about the risks of employment.

Anna Burgess Yang (08:19)

Yes.

Hannah Cole (08:19)

and I just

I found that so interesting. I I mean, I am an artist and I'm not just an artist by training, but also like in my heart and soul. And I think like the strictures of a corporate environment have always graded on me. But it seemed like to me personally, like when studio time was this thing I really preserved fiercely that the timelines of corporate environment, like just a day job,

And it especially as a woman, things like maternity leave and the complete lack of it. w it seemed like the only way I would ever get the kind of leave that I really thought was, you know, fair and good was to have my own company. So would you be willing to just sort of talk a little bit about those the risks as you see them in having a job?

Anna Burgess Yang (09:10)

Yeah, so because

I worked in banking for a long time and I was a mortgage un I was a mortgage underwriter really early and so I was part of

assessing risk in borrowers in banking it is drilled into you that self-employment is inherently risky. And to a bank it is because you can't, you know, you want W-2 income because then you know how much the borrower is earning. And it's hard to tell with self-employment. So that that had always just been part of the framework that I grew up with or that I learned as a young adult was that self-employment is risky because the income is unpredictable.

But when the but the day I got laid off, I lost a hundred percent of my income. I went from salary to zero.

And you know, unemployment in this country is a joke. it was I had it was a a painstaking process to file for unemployment in my state. it was a fraction of what I had been earning. And and as soon as I

got a freelance role that paid me one week, they kicked me off of unemployment. Even though the next week I was back to having zero again. So it was just

Hannah Cole (10:23)

So awesome.

Anna Burgess Yang (10:24)

it was a real you know, it's not built for that type of thing. It's built for you get another job and now you're done with unemployment. So any but that aside, the risk of employment is that you're at the mercy of the employer.

there we have you know at will employment in the almost every part of this country where they can get rid of you for any reason. And so when I lose a client, it's a fraction of my income. It's it still stinks. You know, my clients their budgets change, their needs change, all kinds of things change. And sometimes without a lot of warning

you know, I I may they may just be like that, you know, we're indeed the eng engagement at the end of this month. it's just a f it's just a portion of my income. It's not my whole income. And so that's part of the reason why I prompted that article is because, you know, from my former banking perspective, I was like, well that's the more stable income

is when you only lose maybe twenty percent or some something like that rather than all of it. and you know, with with getting laid off for most people, I mean it it's immediate. There's no notice period. In a vast majority of cases, there's no notice period. And so even providing a two weeks notice, the employer doesn't have to honor that. You I've told people before you have to be prepared that your employer may say, Well we're just gonna be done today.

And that's the it and that's it. You have no recourse and you have no protection. so self-employment to me puts me in more control.

I have to save, you know, to plan for things like f lower client months, but I can choose to do that. And that's just part of how

Hannah Cole (12:04)

Yeah.

Anna Burgess Yang (12:04)

I run my business.

Hannah Cole (12:06)

Yeah, for sure. Whew, yeah. I'm we my husband has worked for startups for his whole career and he just just this year was at a company that closed overnight. Like in the morning everybody had a job and at five PM nobody had a job anymore. The company ended and there was no notice and no severance. I was like, that was scary. we're okay, nobody needs to cry for us, but

Still, it was it was terrifying and I felt really bad for everyone at the company.

so I am curious, like, just because I think that your I don't have a great sense of like what part of the f of the world your clients are operating in, kind of like what their concerns are and stuff, but I I have been just speaking of that like risk of self employment versus employment, is like the job landscape really feels like it is in a lot of flux right now.

and I think that is true if you are an employee and you're just looking at these LinkedIn posts of like massive amounts of layoffs at larger companies. Or if you're self-employed and you're just like your clients are all kind of suffering from work that's drying up from AI replacement as as mine are. so I'm just kind of curious from you, Anna, like

Do you have a sense of like the lay of the land? Like what does it look like from where you stand right now? What are you seeing in the economy based on who you serve?

Anna Burgess Yang (13:30)

so I work mostly with tech companies.

and

Hannah Cole (13:33)

Uh-huh.

Anna Burgess Yang (13:34)

you know, their their work

What they do for their customers, I think, is changing. It hasn't really impacted me and the type of the type of work that I do for them, because I do a lot of like interview-based work. So I talk to people and like write, you know, write up a journalist style article about it and things like that. So there's still, I think, a need for that type of writing. but I I I do kind of wonder, you know, at what point some of the things that are I'm seeing from other people are going to

Trickle down and hit me in some shape or form. A lot of my friends are in similar writing type of roles, but maybe internal at a company. Many of them have been laid off, or their roles have changed substantially as the company itself has pushed employees to use more AI. So they're like, this isn't what I signed up for. And I

a little bit feel like I'm waiting for the other shoe to drop and maybe it's going something's gonna hit me at some point, but so far it hasn't. and which is great. But I

Hannah Cole (14:42)

Yeah.

Anna Burgess Yang (14:43)

it's it's hitting so many people I know in so many ways that are heartbreaking because again if you're working for an employer

it's just you know, the impact is kind of immediate if if something happens to your job and then, you know, some some freelancers I know are struggling to find the type of work that they were doing before.

Hannah Cole (15:05)

Mm-hmm.

Yeah. Yeah, it's interesting. what I have been noticing is it's so individual. Like there are people who are doing fine and the maybe they're in an industry that's relatively untouched and they kind of aren't noticing all of this stuff. And then there's people like me, like my income dropped very dramatically this year, and I have just been like, What's happening? What's going on?

And it's hard to even get the data about it, you know. My brother works in Washington DC at a he worked at a large nongovernmental organization funded by the State Department and you can you can imagine what happened to him six months ago. He he lost his job because of Doge. he was actually personally doxxed by Elon Musk.

Anna Burgess Yang (15:47)

Out more.

Hannah Cole (15:49)

His name and salary tweeted, by Elon Musk. So that that was a little voyage for him. So like yeah, I mean there's like people in government, people in the creative economy, it's just tech workers. It's it's interesting how it's spotty,

Anna Burgess Yang (16:03)

And it puts everyone on edge, I think, because you

Hannah Cole (16:06)

Yes.

Anna Burgess Yang (16:07)

wonder, I one one of my siblings works for a very large tech company that kind of has rolling layoffs and every single time I have to send a text message like, are you okay?

Hannah Cole (16:19)

Wow.

Anna Burgess Yang (16:19)

Because it just kinda and it just kind of keeps everybody scared all the time, wondering if they're gonna be in the next round of cuts, maybe if they made it through this round. And so we're all operating I I actually wrote about this recently too. We're all kind of operating in a culture of fear and like

Hannah Cole (16:39)

Yeah.

Anna Burgess Yang (16:39)

that we can't quite settle, or it's hard to make plans like even in your personal life, because you're worried about what your professional like is your professional.

Hannah Cole (16:54)

Yeah, yeah, I agree. and yet, you know, I do find as especially as a as a business owner, I want to approach the world and my work with a sense of optimism. it's getting harder. It's like actually kind of hard to be optimistic. I think it's not unreasonable and it's absolutely possible, but I'm just noticing that in myself. There is a gloom like around us and a fear. yeah.

Anna Burgess Yang (17:18)

And I I talk to people quite a bit who are maybe considering starting, you know, going out on their own. Maybe they lost their job or they just can't take it anymore. And you know, I'm very upfront about you know, the ups and downs of running a business by yourself. but also try to say like your your current employer is

causing you a lot of stress. It's just a different type of stress. Like it's it's stressful. It's stressful either way. It's stressful to work for an employer and it's stressful to work for yourself. It's just like choose your stress.

Hannah Cole (17:51)

For sure. Yeah. Choose what you want to have control over. Yeah. Yeah, for sure. So I know you have like a download that you offer that's about career pivots, helping to coach people through that. You have certainly been through s a pretty major one yourself. I'm curious if you just have some wisdom to share about pivoting.

Anna Burgess Yang (18:13)

Yeah, the the resource you're referring

to, I kind of break out what are different ways that people end up pivoting. 'Cause I consider that I had several pivots. You know, I pivoted from the industry, you know, there's a cold like I'm gonna just do something completely different and got out of a direct tech job and started writing. there's kind of the boredom, like you feel like you've reached

the top of maybe what you can do at a company. And I think that partially led to me leaving the company that I was at for 15 years was just I there wasn't anywhere else for me to go.

Hannah Cole (18:46)

Yeah.

Anna Burgess Yang (18:48)

you know, there's kind of curi curiosity, like I I just really want to grow and change and just see what I can do. And that's maybe what leads people to self-employment.

and then there's there is a fear based pivot. Like I'm not sure that this job or this type of work is going to be there anymore. And maybe I need to upskill or get into a different field or something

Hannah Cole (19:17)

Mm-hmm.

Anna Burgess Yang (19:18)

before it hits me. And I don't know that we can all predict that and certainly not everybody's in a position to do any of those things and I recognize that as well. Like I had to take

pretty large cut in salary moving from an executive at a tech company to basically the lowest level writer at a content agency.

Hannah Cole (19:37)

Huh.

Anna Burgess Yang (19:37)

and had to plan for that. Like can't is that even feasible? What do I need to earn

Hannah Cole (19:43)

Mm-hmm.

Anna Burgess Yang (19:44)

versus what can I earn in like a year or two, which is much different.

Hannah Cole (19:49)

What an interesting decision making process to go through. Cause I think a lot of people would just take those two data points. What am I earning right now? What will I be earning tomorrow when I start this venture? But you're wise to think it through a year, two years down the line. How did that look different from day one?

Anna Burgess Yang (20:07)

And I told my husband when we when I made that, you know, 'cause we knew what the offer was and what I was going to be making. and then when I went self employed, I said, Give me six months.

Like if I can't not not to replace my salary, but to have enough momentum that this seems possible. But if

Hannah Cole (20:25)

Yeah.

Anna Burgess Yang (20:26)

I hadn't been able to get clients or like that seemed like that it this wasn't gonna work, I would have gone out and found another job. Like, you know, we have a mortgage and we have kids and things like we have things to pay for.

Hannah Cole (20:36)

Yeah.

Anna Burgess Yang (20:36)

but I knew that what I was going I had to I we had enough cushion or we kinda planned enough to kind of float the difference until

Until my earnings got back up to what they were previously. So but you have to think about that math, right? Like w what can you f if you can of if you can afford to take less, how mu how long can you afford to take less?

Hannah Cole (20:58)

Yeah.

Yeah, and I think planning those timelines is really I've been thinking a lot about predicting the future. Partly 'cause the whole world is trying to do it right now with AI and nobody can. And yeah, just like

Okay, well realistically in three months will I have figured out this problem that I'm currently working on. And like, you know, I think the first year you try something, that's really hard math. But once you've kind of been in it, like I have had my company for ten years now, I kind of have a good sense of like how long a project might take me. that's getting easier, I guess, is my point. Yeah.

Anna Burgess Yang (21:35)

Yeah. And I always tell

people also when I talk to them about that math of of changing from corporate to solopreneur is like

Hannah Cole (21:44)

Mm-hmm.

Anna Burgess Yang (21:45)

what you need is not the same as what you're earning today. Like what are your what are the non essential things that you can cut for

a period of time and still be okay to kind of get you

Hannah Cole (21:58)

Yeah.

Anna Burgess Yang (21:58)

through that initial six months period or or however long it might be. And it's not saying cut these things forever. It's saying what could how how much could you scale back? And

Hannah Cole (22:10)

Uh-huh.

Anna Burgess Yang (22:10)

what do you absolutely need to pay for until

Hannah Cole (22:14)

Yeah.

Anna Burgess Yang (22:15)

your business kind of picks up and you find your rhythm and your clients and things like that.

Hannah Cole (22:19)

For sure. Yeah, that is really it's a good exercise to do. I mean, we we have done it as a family in these last few months, just like cut things as much as we can. and it's not at a place where we absolutely need to be doing it, but it actually feels really good to do anyway. to just be like because we've both been having this conversation of

What what is happiness? You know, like we we can't not earn money. That's off the table for us. But we don't have to

Anna Burgess Yang (22:46)

Right. Shoot capitalism.

Hannah Cole (22:50)

Yeah, right. It would be nice. But I feel and I I love I love my work, really, truly I do. Sometimes I just need like a little rest. But, you know, it's to me like it's a dosing problem, you know. I don't wanna have to work so hard that I don't get to sleep or enjoy weekends. But you know, if I

work a reasonable number of hours. I love what I do. So I think it's a really interesting question of like, well, what is actually I find that digging into your budget can actually be a real question, a real discussion about what brings you joy. And that is a really good conversation to have, whether it's, you know, alone

Anna Burgess Yang (23:28)

Yeah.

Hannah Cole (23:29)

w with yourself or with a partner. because man, it's

Funny how much you can kind of autopilot

on your spending and then not really think about, well, is this actually bringing joy and value to my life? Or is like, I don't know, grinding my coffee beans and having a really wonderful coffee at home every day rather than out co totally pleasant.

Anna Burgess Yang (23:52)

Yeah. And I because I've come from, you know, banking background and I worked in that space for so long, both

Hannah Cole (24:00)

Mm-hmm.

Anna Burgess Yang (24:00)

like for my business and for my home life, I basically have three budgets, like a worst case scenario. And then kinda

Hannah Cole (24:06)

Wood. Uh-huh.

Anna Burgess Yang (24:09)

like here we operate all the time and then like well what happens if

I have a really good month in my business. Like what w what might we do with extra money? Do I do something in my business? Do I do we do something as a family? but that way I'm not making decisions

out of like snap decision or an emotional reaction. I'm like, okay,

Hannah Cole (24:28)

Yeah. For sure.

Anna Burgess Yang (24:30)

if I lose a big client and I can't get one I right away, I just move down to the bare minimum, you know, budget and operate on that for a while, but that's already planned out for me. so that it's

Hannah Cole (24:40)

That's really smart.

Anna Burgess Yang (24:42)

yeah, so they just I have this spreadsheet of like low, medium, high, operating on medium all the time, and then could easily move to low or high and just know exactly

Exactly what I need to cut or what I need to change if I'm in that s situation.

Hannah Cole (24:56)

Mm-hmm. That's

great. That's great. I love it. I actually wanna you know, it's it strikes me as I was reading through some of your posts on Substack that you really do feel

comfort in the financial realm. Like you were talking about one of the skills you had in your corporate job was reading a profit and loss statement. And a lot of people that I work with don't know, maybe don't even know what a profit and loss statement is. It's one of the three financial statements that you get from accounting software. the one that tells you how much profit you made.

in a given period. So I'm just curious, where you learned how to do that?

Anna Burgess Yang (25:40)

So some of it came from working at

a bank, even though I was on mortgage, which is on the consumer side, but I often

Hannah Cole (25:48)

Mm-hmm.

Anna Burgess Yang (25:48)

had to look at a borrower's tax return. And so if they were self employed, I was looking at the part of their tax return that was base, you know, income and versus expenses. So I had

Hannah Cole (25:58)

Yeah.

Anna Burgess Yang (25:59)

kind of a baseline understanding of what a self employed person reported on their taxes. And then when I started working for the financial technology company, part of the software was entering a profit and loss

statement. So was the bank taking the tax return from their borrower, plugging the numbers into the product that I was teaching them how to use, and then getting

Hannah Cole (26:22)

Mm-hmm.

Anna Burgess Yang (26:23)

all the numbers. So they were analyzing commercial borrowers, so all business. And so I was I was teaching bankers how to they knew how to analyze. I was teaching them the data entry part to get it into the product so that they could you know look at ratios and things like that. So through that I kind of backwards learned it. Like I knew

how the software worked. The bankers

Hannah Cole (26:45)

Yeah.

Anna Burgess Yang (26:45)

knew how the bankers knew how to teach the profit and loss. And just in conversation with them and in having to teach the product, I learned about balance sheet, profit and loss, different cash flow statements and things like that. and so by the time I went out of my own, you know, I knew I managed my own finances for several years before I finally hired a bookkeeper, but I was comfortable doing it because I'd seen it

hundreds and hundreds of times before.

Hannah Cole (27:14)

Wow. Yeah, that's awesome. It's so good. I mean, it's really powerful. It's like a really great knowledge base to have. so mentioned or you've you've come close to mentioning a few times mortgages and self employment being risky to the bank.

And I just from the opposite side of that equation fits me, somebody who, you know, used to do taxes. I now I teach taxes exclusively, but I used to also do the taxes for self employed people. And there's this really interesting conversation that would really shift the way that people orient towards their taxes and their deductions when they were interested in getting a mortgage.

And it was because of how yes, conservative banks are and that you they're, you know, maybe you just started your business this year, you are not getting a mortgage with only one year of

Anna Burgess Yang (28:06)

Two years.

Hannah Cole (28:07)

Yeah. And it's like much more conservative timelines that you need to show the bank when you're self employed. Like I s I've seen banks that required three years of profit and loss statements. and of

Anna Burgess Yang (28:18)

'cause us usually

they'll want two full years. So nobody starts their business on January first. So you

Hannah Cole (28:24)

There you go. Mm-hmm.

Anna Burgess Yang (28:26)

that's why it ends up usually trickling into three years, because you don't have two full years of returns. So

Hannah Cole (28:33)

Yeah.

There's a real temptation when you're self-employed to more or less get your income reportable, taxable income as low as humanly possible. And of course, we all understand why that temptation is there. You want to pay lower taxes. Life is risky when you're self-employed and you want to, you know, report as little income and pay as little tax as you can. But there is another side there. When you want a mortgage

When you want to draw on your social security and Medicare, you need to have been paying into the system at a higher rate, at a higher level. You need to have been reporting a higher amount of income in order to get a mortgage or a bank loan. And so it is not always the right answer. Sometimes it feels like the right answer is only report maximum expenses, put everything on that Schedule C that you possibly can. And that isn't always the right answer. This is the time where you want to be really cautious and sometimes be like,

you know, you have some leeway in how many expenses you actually report. You don't have to put every expense you had on your tax return. You can report a higher

Anna Burgess Yang (29:40)

Yeah. And I was very

Hannah Cole (29:41)

Thousand.

Anna Burgess Yang (29:42)

lucky. My husband and I had just refinanced our house like a couple of months before I got laid off. So at the time I

Hannah Cole (29:50)

wow.

Anna Burgess Yang (29:51)

was a W two employee and

Hannah Cole (29:53)

Whoa.

Anna Burgess Yang (29:55)

because that was when interest rates were really low. They're not so much anymore, but we really got lucky in that regard 'cause it would have been probably a non starter.

for to put our house on just my husband's income without any real support from me because I we would have had to wait years to be able to show that.

Hannah Cole (30:14)

Yeah.

Man. It's so it's so good to know and it's really like it's not that many people who know three years in advance that they're going to in three years be applying for a mortgage. But it is just good. If we can if Anna and I right now, dear listener, can put that tickle in your brain. It's good to be aware of it.

Anna Burgess Yang (30:35)

Yeah, or if you're thinking about leaving your job and also thinking about refinancing or buying a house, maybe do that before you become self-employed. Because the bank can't do anything once the loan is closed. Like you can do whatever you want, they'll never they don't follow up. you don't have to reprove your income at all ever again until you refinance. So you're fine. You could literally lose your job the next day and the bank won't know.

Hannah Cole (30:59)

Wow, that's kind of incredible, isn't it?

Anna Burgess Yang (31:02)

And it's so different for consumer versus business because part of the reason I saw so many tax returns is businesses have to reprovide income or their profit and loss and all that every year to the bank.

Hannah Cole (31:13)

Mm-hmm.

Anna Burgess Yang (31:14)

it's part of their loan agreement, it's not for consumer for more personal mortgages. You you whatever it is on the day of close, that's it. So unless unless you're financed to

Hannah Cole (31:25)

Wow. That's so interesting.

Anna Burgess Yang (31:27)

buy a different house, you don't have to do it again.

Hannah Cole (31:29)

Wow, that is kind of incredible. Wow, this has been so interesting to me. I I really think there are some juicy things, especially about the financial side of managing your self-employment. And I encourage everyone to go check out Anna's Substack, which really has some great pieces about the journey of self employment and some real skills that you can obtain. Anna, can you tell people where they can find you?

Anna Burgess Yang (31:55)

Yeah, so my Substack, as you mentioned, I'm sure you'll link in the show notes, but that's work better not media. I'm on LinkedIn, Anna Burgess Yang. There's only one of me. So I'm easy to find there. and my website, Annabyang.com, has links to everything. I've got a blog on top of I write kind of an obsessive amount. And so I have a blog, I have a newsletter, I have a Substack, I have a tutorials website, I have a YouTube, like there's a lot.

I produce a lot of content.

Hannah Cole (32:24)

It's amazing. It is really amazing. Wonderful. Well, thank you so much for sharing your wisdom with us here on the Sunlight Tax Podcast. It's a pleasure to have you.

Anna Burgess Yang (32:32)

Yeah. Great to chat with you.

Hannah Cole (32:34)

Bye.

Most Americans Have Been Deceived About Taxing the Wealthy (Even My Mom and Partner)

Listen and Subscribe Here

“People are wanting, very rightfully, to feel like they’re paying into a system that feels fair for everyone, including hundred millionaires and billionaires.”

— Hannah Cole

In this episode of the Sunlight Tax Podcast, I break down some of the biggest misconceptions about wealth taxes, estate taxes, and tax fairness in the United States. We’ll explore how the tax system works for the wealthiest Americans, why so many myths persist around taxing wealth, and what these policies mean for everyday people, small business owners, and future generations.

I also share the story behind my grassroots campaign to raise awareness about tax justice through art, advocacy, and community action. My goal is to make complex tax issues easier to understand and help more people engage in conversations about economic fairness and social change.

Also mentioned in today’s episode:

00:10 My Art Campaign

00:29 The State of Wealth Inequality in the US

00:57 Tax Fairness and the Wealthy

01:50 Problems with Wealth Tax and Historical Context

02:45 Inheritances and the Income Tax System

03:41 Hannah's Grassroots Campaign and Art Fundraiser

04:41 Understanding the Sunlight Tax Website

05:09 Funding the IRS and Tax Enforcement

06:34 Myths and Misinformation about Tax Laws

07:32 Upcoming Expert Interview with Professor Madoff

09:00 Misconceptions about Inheritance and Gift Taxes

12:17 The Truth About Estate Taxes and Public Perception

16:35 Tax Benefits for Primary Residence Sales

If you enjoyed this episode, please rate, review and share it! Every review makes a difference by telling Apple or Spotify to show the Sunlight Tax podcast to new audiences.

Episode Links:

Support me in rebuilding my studio

Ray Madoff, author ofThe Second Estate: How the Tax Code Made an American Aristocracy.

Get my Tax Help onSubstack.

Get your FREE visual guide to tax deductions
Order my book: Taxes for Humans: Simplify Your Taxes and Change the World When You’re Self-Employed

Watch YouTube video version

How to Tax the Rich and Studio Fundraiser

Listen and Subscribe Here

“Everyone should feel that their taxes are fair.”

— Hannah Cole

This week on the Sunlight Tax podcast, I share why tax fairness matters and how current tax policies disproportionately benefit the wealthiest Americans while placing a greater burden on working people and small business owners. I break down the growing gap between wealth and taxation, explain how these policies affect everyday life, and discuss why a more equitable tax system is essential for a stronger economy and society.

I also share the story behind my latest art project – a fundraiser to rebuild my Helene-destroyed studio that doubles as what I do best: Helping you understand & spread the word about a key issue that’s complex, fact-based, and offering real solutions. With a touch of handmade vibes. And spread the word (before the midterms), and buy a hand-printed tote that helps me rebuild.

Also mentioned in today’s episode:

00:10 Introduction and Personal Reflections

02:49 The Taxation Debate: Fairness and Advocacy

08:30 Understanding Wealth Inequality

10:09 Misdirection in Taxation

20:02 Strategies of the Wealthy

22:25 Systemic Failures in Taxation

25:27 Proposed Solutions for Tax Fairness

If you enjoyed this episode, please rate, review and share it! Every review makes a difference by telling Apple or Spotify to show the Sunlight Tax podcast to new audiences.

Episode Links:

Support me in rebuilding my studio

Ray Madoff, author ofThe Second Estate: How the Tax Code Made an American Aristocracy.

Katherine Anne Edwards, economist, and co-host of the podcast The Optimist Economy

Get my Tax Help onSubstack.

Get your FREE visual guide to tax deductions
Order my book: Taxes for Humans: Simplify Your Taxes and Change the World When You’re Self-Employed

Watch YouTube video version