Here's a trick the ultra-wealthy have perfected: if you own billions in stock, don't sell it. Just borrow against it. That way, you never pay capital gains taxes, and you get to live like a billionaire on what's technically debt. It's called "buy, borrow, die," and it's perfectly legal.

Rep. Dan Goldman wants to change that. The New York Democrat introduced legislation Thursday targeting this exact loophole, pointing to some eye-popping examples of how well it works.

The 1% Tax Rate Club

Goldman highlighted that Tesla Inc. (TSLA) CEO Elon Musk paid an effective tax rate of just 3.3%, while Amazon.com Inc. (AMZN) founder Jeff Bezos clocked in at a mere 1%. How? They take out tax-free loans backed by their stock holdings instead of selling shares and paying capital gains taxes.

It's a brilliant strategy from a tax-minimization perspective. Borrowed money isn't considered income under current law, so there's nothing to tax. Meanwhile, your stock keeps appreciating, and you get cash to buy yachts or whatever billionaires buy these days.

The ROBINHOOD Act Explained

Goldman's proposed legislation would impose a 20% excise tax on loans and lines of credit backed by capital assets like stocks. The bill targets individuals earning more than $400,000 annually or joint filers making over $450,000, though it carves out exemptions for home mortgages and certain other loan types.

The goal? Generate at least $276 billion in new revenue to fund universal childcare and other social programs. That's not pocket change.

A Wealthy Lawmaker Taking Aim at Wealth

There's an interesting twist here: Goldman himself is a Levi Strauss & Co. (LEVI) heir and one of the wealthiest Democrats in the House. He's not exactly unfamiliar with the strategies his bill would curtail.

"This bill would raise taxes on me personally," Goldman told Bloomberg Government. He argued it's "exactly the type of policy that we need to be creatively thinking about how to make sure that we're tackling wealth inequality."

It's rare to see a lawmaker explicitly acknowledge that proposed legislation would hit their own bank account. Whether that candor helps or hurts the bill's prospects remains to be seen.

What Happens Next

Progressive groups including Americans for Tax Fairness and Social Security Works have endorsed the legislation. But Bloomberg Government reports the bill faces long odds in the GOP-controlled House.

Still, its introduction signals that Democrats are gearing up to make taxing billionaires a central theme heading into the 2026 midterm elections. Whether attacking asset-backed loans gains traction as a campaign issue could depend on how well voters understand the "buy, borrow, die" strategy—and whether they think it's a problem worth solving.