Taxing the Billionaire Roys of Succession
The Roys, the billionaire family everyone loves to hate on HBO’s Succession, probably pay a lower tax rate than you. Logan Roy, founder and CEO of multi-media empire WayStar Royco, and his four back-stabbing, power-hungry children, are firmly in the top 1%. Their preferred method of transportation is a fleet of helicopters; they routinely abandon beautiful seafood spreads uneaten; and like most billionaires, they probably got even richer during the pandemic. And yet, the Roys most likely only pay an effective federal income tax rate of around 8%—or even less.
How do obscenely wealthy families like the Roys avoid taxation and grow even wealthier, while everyone else—especially women and people of color—are left behind?
The Roys’ Wealth Is Taxed Less than Your Work
The Roy children have spent most of Succession’s runtime jockeying for the coveted Waystar CEO spot. But though they crave the power, prestige, and sibling bragging rights that come with the position, none of them seem to care about the salary. That’s because—like Jeff Bezos who only took a roughly $80,000 salary in 2020, and Elon Musk who took no salary—the Roys make the vast majority of their money not from working, but from wealth. One estimate is that the family owns $14.4 billion in stock alone.
Why does this matter? Even though the Roys live a decadent lifestyle from their investment profits, they are taxed less than if they worked for their billions. Unlike ordinary people, who pay taxes on their wages and salaries every pay period, the Roys won’t pay taxes on their stock and other investments until—and if—they sell them, and even then, it will be at a lower tax rate.
The Roy Children Are in for a Big Inheritance
Right now, all bets are off on whether Kendall, Roman, Shiv, or possibly even Connor will take over the Waystar empire when Logan dies. But one thing is certain: all four children will benefit handsomely from their father’s death––unless Logan has vindictively cut them out of the will. That’s because Logan will be able to pass on the profits on his unsold stock and investments to his children tax-free. Thanks to a loophole called “stepped-up basis,” not only will Logan not have to pay taxes the lifetime increase in his unsold Waystar stock, but neither will his children. Combined with a weakened estate tax and other loopholes, this tax policy allows wealthy—usually white—families like the Roys to accumulate massive amounts of wealth across generations.
The Roys Have Tax “Arrangements”
When Connor publicly announced he wouldn’t pay his federal income taxes, Logan furiously responded with, “You don’t go shouting about tax. We have arrangements!” What sort of tax arrangements did Logan mean? And why does he not want his son shining a light on the family’s tax situation? Although the show doesn’t confirm it—there are more scintillating non-tax crimes to focus on, like vehicular manslaughter—we can assume that the Roys don’t pay all the taxes they owe. It is estimated that there could be up to $1 trillion per year in uncollected taxes, much of it from wealthy families who—like the Roys—can afford an army of lawyers and accountants to handle their finances and resist audits. The severely underfunded IRS simply can’t afford to go after families like the Roys.
How Can We Tax Obscenely Wealthy People Like the Roys?
If we want to make sure the wealthy pay their fair share, we need to tax income from wealth the same as income from work—and we need to make sure the IRS has the funding to enforce those taxes. Proposals like the Billionaire’s Income Tax and eliminating stepped-up basis would ensure that wealthy people like the Roys can’t avoid paying taxes on their investment profits. And the House version of the Build Back Better Act includes $44 billion in IRS enforcement spending over the next decade.
And so, the next time you watch Logan use his direct line to the President to hush up a scandal or watch Roman bribe an employee to do something horrible, remember: Taxing the rich means taxing the Roys.