If you open your paycheck, you will notice a rather tragic recurring character named “Tax Deductions.” Before you even get a chance to squander your earnings on overpriced oat milk or electricity, the government takes its slice right off the top. Forty percent, thirty percent, twenty percent, whatever bracket you land in, the tax collector behaves like an eager bouncer checking bags at the door. You earned a salary, so you pay up. Non-negotiable.
Now, let us imagine a tech tycoon who just bought a superyacht equipped with a smaller, emotional support yacht inside it. How much income tax did they pay on their ten-billion-dollar fortune this year?
Often, a figure approaching zero.
It is not illegal, and they haven’t fled to a tropical island with a suitcase of cash. Instead, they have figured out the central punchline of modern public finance: we tax the money people work for, but we barely touch the wealth that works for people.
The Salary Trap vs. The Asset Game
The whole architecture of the modern tax system rests on a 19th-century premise: that people make their living through a salary. If you work sixty hours a week stocking shelves, operating machinery, or wrangling spreadsheets, 100 percent of your economic survival is classified as taxable ordinary income.
The ultra-wealthy, meanwhile, look at a standard salary with the same mild pity you might reserve for someone using dial-up internet. Why take an income when income is the most heavily taxed substance on Earth?
Instead, they accumulate assets:
Paper Fortunes: When a founder’s company explodes in value, their net worth spikes by billions. But because that wealth lives in unrealized stock, the tax system considers them broke until they sell.
Capital Gains Discounts: When an asset is eventually liquidated, it often gets hit with capital gains tax, a rate historically kept far lower than the peak tax brackets for wage earners.
The “Buy, Borrow, Die” Cheat Code: Rather than selling stock and triggering a tax event, the mega-rich simply borrow against it. Banks eagerly hand out massive loans backed by those shares at rock-bottom interest rates. You can buy a private jet with borrowed cash, and in the eyes of the taxman, you have not realized a dime of profit. In fact, debt is not income, it is a liability.
While the nurse pays a fixed percentage on every hour of overtime, the billionaire lives comfortably off tax-free credit lines, using stock that grows faster than the interest rate.
Shrinking the Safety Net from the Bottom Up
For the working and middle classes, primary wealth comes from wages and paychecks, which are automatically deducted at high ordinary income rates. For the billionaire class, wealth comes from equities, debt, and real estate, which are deferred indefinitely, discounted as capital gains, or bypassed altogether via loans.
When the tax burden shifts from the balance sheets of asset owners directly onto paychecks, the entire social compact begins to buckle. Public coffers come up short, and the standard political solution is never to close the structural loopholes of high finance; it is to quietly trim public services.
Buses run less often, clinic wait times double, state pensions get squeezed, and public libraries reduce their hours to half-days on alternating Tuesdays. The very institutions designed to keep working people from slipping into destitution are starved of cash, not because the economy lacks wealth, but because that wealth is hovering at 35,000 feet, safely wrapped in collateralized debt obligations.
Taxing labor while leaving capital to roam free turns the tax code into an obstacle course for the people least equipped to run it. If public services are meant to benefit everyone, the tax system should not penalize those whose only crime is showing up to work for a living.
Centre for Nigeria Progress 