Chuck Oliver of The Hidden Wealth Solution Shares How Billionaires Pay So Little in Taxes

Taxes are widely expected to rise over time, and for many households, the pressure is already building. Economic uncertainty, persistent deficits, and shifting legislation all feed the same concern: If you’ve worked hard, saved diligently, and built real wealth, the tax bill can become one of the largest “silent” expenses you’ll ever face, especially in retirement.

But according to Chuck Oliver, Founder of The Hidden Wealth Solution, the good news is that most of what people call “billionaire tax strategies” isn’t secret, illegal, or offshore. In many cases, it’s simply the result of understanding how the U.S. tax system is designed: It taxes income far more aggressively than it taxes wealth. Once you see the difference, the playbook becomes easier to understand, and you can adapt the underlying principles to your own situation.

Most Americans earn money the traditional way: through wages, bonuses, commissions, or self-employment income. That income is taxed immediately, often with withholding, and it is clearly reflected on a return.

“Billionaires generally build wealth differently,” says Chuck Oliver. “Their net worth rises because their assets rise—companies, stocks, real estate, equity stakes, and intellectual property. As those assets appreciate, their wealth increases. But they don’t owe income tax simply because an asset became more valuable. Taxes show up only when gains are realized through a sale.”

This difference is the foundation for why it can look like the ultra-wealthy pay little relative to their growing net worth. Their “wealth” grows quietly through appreciation while their “income,” at least on paper, remains relatively low.

A widely discussed wealth framework is often summarized as “buy, borrow, die.” The concept is straightforward.

First, one buys assets that have the potential to appreciate over time. Second, instead of selling those assets (which may trigger capital gains taxes), they borrow against them. (Loans generally aren’t treated as taxable income.) Third, upon this person’s death, certain assets may receive a “step-up” in tax basis, meaning heirs can inherit property at its current value rather than the original purchase price, potentially reducing or eliminating capital gains taxes on decades of appreciation when assets are eventually sold.

This illustrates a practical truth: people who can fund their lifestyle through borrowing or other tax-efficient structures can dramatically reduce their taxable income.

Most people will never implement this on a billionaire scale. But you can borrow the principle, and you can build toward a plan that relies less on fully taxable withdrawals and more on tax-efficient sources of cash flow.

One of the most common retirement surprises isn’t market volatility—it’s taxation. Many retirees discover too late that their future tax rate isn’t automatically lower. In fact, taxes can rise in retirement for several reasons.

A large portion of retirement savings sits in traditional IRAs and 401(k)s, meaning taxes were deferred—not eliminated. Withdrawals are taxed as ordinary income. Later, required minimum distributions (RMDs) can force additional taxable income even when the retiree doesn’t actually need the money. That extra income can trigger a chain reaction: higher brackets, more Social Security taxation, and higher Medicare premiums through IRMAA surcharges.

This is where Chuck Oliver’s approach at The Hidden Wealth Solution often focuses attention: not just on growing assets, but on reducing the long-term “compounding tax exposure” that can quietly build for decades.

As Chuck Oliver notes, one of the most powerful tax concepts used by wealthy investors is depreciation. Depreciation can allow certain assets, especially real estate and business property, to generate deductions that reduce taxable income, sometimes even when cash flow is positive.

In simple terms, the IRS may allow an owner to deduct part of an asset’s value over time as an expense. This can create a “paper loss” that offsets other income. When used correctly and legally, depreciation can be one of the clearest examples of why taxable income and real financial performance don’t always match.

For everyday taxpayers, the takeaway isn’t that everyone should become a real estate magnate—it’s that the tax system often rewards ownership, investment structure, and eligible business activity more than it rewards wage earning.

Another major reason the wealthy often pay lower effective rates is the type of tax applied.

Wages are taxed at ordinary income rates, which can be significantly higher than long-term capital gains rates. If you earn your living through a salary, you feel that immediately. If your wealth grows through asset appreciation and you sell selectively, long-term capital gains treatment may apply, and the difference can be substantial.

Even if you never become a “capital gains household,” you can still plan like one by building more tax diversification, so you aren’t forced to fund your entire retirement from the most heavily taxed bucket.

According to Chuck Oliver, a major mistake many investors make is focusing exclusively on rate of return without considering the tax environment that return will live in.

A strong return inside a tax-deferred account can also mean a larger future tax liability. And if tax rates rise in the future, the “real” return after taxes can shrink faster than most people expect.

A more durable strategy is to build tax diversification across account types. This way, you can choose where retirement income comes from and manage taxable income year by year. This can include balancing taxable brokerage assets, tax-deferred retirement accounts, and Roth-style tax-free assets. It can also include planning for charitable giving strategies that reduce taxable income while fulfilling philanthropic goals.

For retirees who are charitably inclined, qualified charitable distributions (QCDs) from an IRA can be an efficient tool. When eligible, a QCD can direct IRA funds to a qualified charity and potentially count toward RMD requirements—without increasing adjusted gross income in the same way as a normal withdrawal.

According to Chuck Oliver and The Hidden Wealth Solution, that matters. Why? Because lowering reported income can help reduce the domino effect of taxation on other benefits and thresholds. It’s one more example of how the “headline” tax rate is often less important than how much income gets pulled into the taxable column.

The strongest tax outcomes usually come from planning before income is recognized or decisions are locked in.

That’s the central mindset behind Chuck Oliver’s approach at The Hidden Wealth Solution. He asserts that you treat tax planning as an ongoing strategy, not a once-a-year filing exercise. Tax preparation reports what happened. Tax planning helps shape what happens next.

Ask Chuck, and he’ll tell you that you don’t need billionaire complexity to make meaningful progress. Most households can benefit from clarifying three things.

First, identify where your future retirement income will come from and how much of it will be fully taxable. Second, understand which triggers could push you into higher taxes, such as RMDs, Social Security taxation thresholds, IRMAA Medicare surcharges, and large one-time income events. Third, build a tax-diversified plan that gives you flexibility—so taxes don’t dictate your lifestyle, your retirement timing, or what your heirs inherit.

The ultra-wealthy aren’t necessarily smarter. They’re often simply structured differently. The real opportunity is to apply the underlying principles—legally and responsibly—so you can keep more of what you’ve worked so hard to build.

Chuck Oliver is the founder and CEO of The Hidden Wealth Solution, a nationally recognized wealth strategist firm specializing in tax-efficient retirement and legacy planning. A two-time best-selling author, national radio host, and lifelong entrepreneur, Chuck helps clients across the U.S. reduce taxes, minimize market risk, and create lasting financial confidence. His passion for empowering others to overcome financial uncertainty drives his belief that true wealth is built through clarity, confidence, and capability.