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On Friday, President Donald Trump delivered an unusual speech at the Justice Department. Between fulminating against his political adversaries and long digressions about the late basketball coach Bob Knight, Trump declared, “We’re restoring fair, equal, and impartial justice under the constitutional rule of law.”

Then his administration spent the weekend proving otherwise.

People who believe the press is overhyping the danger to rule of law posed by the current administration have pointed out that although administration officials have repeatedly attacked the judicial system, the White House has not actually defied a judge.

But that may not be the case anymore, or for much longer. On Saturday in Washington, D.C., Judge James Boasberg issued a temporary restraining order barring the federal government from deporting Venezuelan immigrants to El Salvador, which it was seeking to do using a 1798 law that bypasses much due process by declaring an enemy invasion. Nonetheless, hundreds of Venezuelans alleged by the administration to be connected with the gang Tren de Aragua landed in El Salvador, where authoritarian President Nayib Bukele has agreed to take them. Separately, a federal judge in Massachusetts is demanding to know why Rasha Alawieh, a Lebanese doctor at Brown University’s medical school, was deported despite a valid visa and a court order temporarily blocking her removal.

The White House insists that it did not actually defy Boasberg’s judicial order, but its arguments are very hard to take at face value. “The Administration did not ‘refuse to comply’ with a court order,” White House Press Secretary Karoline Leavitt said in a statement. “The order, which had no lawful basis, was issued after terrorist [Tren de Aragua] aliens had already been removed from U.S. territory.” She’s trying to have it both ways—the order is unlawful, but also we didn’t ignore it. “The written order and the Administration’s actions do not conflict,” Leavitt said.

Although Boasberg’s written order did not specify, the judge told attorneys during the Saturday hearing that “any plane containing these folks that is going to take off or is in the air needs to be returned to the United States.” Politico reports that the plane left during a break in the hearing, as though the government was angling to get out just ahead of any mandate. During a briefing today, Leavitt also questioned whether the verbal order held the same weight as a written order, which is a matter of settled law. During a hearing early this evening, Boasberg seemed incredulous at the Justice Department’s arguments, calling one a “heck of a stretch.”

In the Boston case, a Customs and Border Protection official said in a sworn declaration that the agency had not received formal notification of the judge’s order when it deported Alawieh. CBP said in a statement yesterday that “arriving aliens bear the burden of establishing admissibility to the United States.”

The statements of Trump administration officials elsewhere make it even harder to take their actions as anything other than attempting to defy judges. Salvadoran President Bukele posted a screenshot of a New York Post story about the judge’s order on X with the commentary, “Oopsie … Too late” and a laughing-crying emoji. Chief Bureaucrat Elon Musk replied with the same emoji, and Secretary of State Marco Rubio shared Bukele’s post from his own account. “Border czar” Tom Homan appeared on Fox News this morning and said, “We’re not stopping. I don’t care what the judges think. I don’t care what the left thinks. We’re coming.”

These actions should be terrifying no matter who is involved. The fact that Tren de Aragua is indeed a vicious gang doesn’t nullify the law—the administration’s claim that the U.S. is contending with a wartime invasion is ridiculous on its face. Even more important is whether the White House decided to snub a ruling by a federal judge. Nor do customs officials’ claims in court filings that they found “sympathetic photos and videos” of Hezbollah leaders on Alawieh’s phone, or that she told them she had attended the Hezbollah leader Hassan Nasrallah’s funeral, mean the law doesn’t apply. For all we know, her actions may well justify her deportation. (Of course, we have little way of assessing any of these allegations clearly, because the administration has sidestepped the usual judicial proceedings in both cases. A lawyer for Alawieh’s family hasn’t commented on the allegations.) What matters is that the executive branch acted despite a judge’s order.

This is what we might call the Mahmoud Khalil test: No matter whether you think someone’s ideas or actions are deplorable, once the executive branch decides it doesn’t have to follow the law for one person, it has established that it doesn’t have to follow the law for anyone. After Khalil was arrested, Trump said that he was “the first arrest of many to come.” No one should have any illusion that the list will stop with alleged Tren de Aragua members. Throughout his career, Trump has tested boundaries and, if allowed to do so, pushed further. His actions at the start of this term show that he is more emboldened than ever, and traditionally institutionalist figures such as Rubio seem eager to abet him.

Watching Trump’s DOJ address, supposedly about law and order, offers some ideas of who else he might target while ignoring the law. So do his social-media accounts. This morning on Truth Social, Trump claimed that former President Joe Biden’s pardons of Liz Cheney and other members of the House January 6 Committee were not valid. “The ‘Pardons’ that Sleepy Joe Biden gave to the Unselect Committee of Political Thugs, and many others, are hereby declared VOID, VACANT, AND OF NO FURTHER FORCE OR EFFECT, because of the fact that they were done by Autopen,” Trump wrote. “In other words, Joe Biden did not sign them but, more importantly, he did not know anything about them!”

Trump wouldn’t bother with this if he didn’t hope to prosecute the people involved. Although Biden’s pardons were controversial because they were issued preemptively, the idea that an autopen, which allows the user to sign remotely, would invalidate them is concocted out of thin air. (Nor has Trump provided evidence that Biden did in fact use an autopen in these cases.) The Justice Department’s Office of Legal Counsel wrote a justification for the practice in 2005, and presidents have been using them to sign legislation since 2011, without serious incident. The Supreme Court could conceivably rule in favor of Trump’s view—the justices have adopted other long-shot Trump claims—but it is hard to imagine, and would be a real departure.

When Trump speaks about law and order, he means it very narrowly. He believes in swift justice for his adversaries, with or without due process of the law; meanwhile, he believes his actions should not be constrained by law, the Constitution, or anything else that might cause him problems, and he has used pardons prolifically to excuse the actions of his friends and allies, whether Paul Manafort and Roger Stone or January 6 rioters. Plenty of presidents have been frustrated by the limitations of the law. Richard Nixon even claimed, years after leaving office, that any action by the president, as head of the executive branch, is de facto legal. But no president until now has so aggressively or so frequently acted as though he didn’t need to follow the law’s most basic precepts.

Back in November, my colleague Tom Nichols invoked the Peruvian politician Óscar Benavides. Though he’s little known in the United States, here are a few striking facts about him: He served as president twice, first coming to power not through a popular election but through appointment by an elected assembly. Some years later, he returned to the presidency as an unabashed authoritarian. (Hmm.) “For my friends, everything; for my enemies, the law,” goes a quote sometimes attributed to Benavides. It could be the motto of the Trump administration over the past four days.

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The ultimate Trump story Mahmoud Khalil’s detention is a trial run.

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Franklin Foer on Columbia University’s anti-Semitism problem The lesson Trump is learning the hard way How Republicans learned to love high prices

Today’s News

At least 42 people died after a powerful storm system hit central and southern U.S. states over the weekend, according to officials. The Energy Department, EPA, and NOAA started hiring back probationary employees after federal judges recently ruled that their firings were illegally carried out and ordered their reinstatement. Donald Trump and Russian President Vladimir Putin are scheduled to speak on the phone tomorrow about a cease-fire with Ukraine. Trump said yesterday that he expects the conversation to include discussions about Ukraine’s power plants, and that there have already been talks about “dividing up” Ukrainian assets.

Dispatches

Work in Progress: “Buy, Borrow, Die”—this is how to be a billionaire and pay no taxes, Rogé Karma writes. The Wonder Reader: Finding love has never been easy, but this is a particularly tricky moment for romance, Isabel Fattal writes.

Explore all of our newsletters here.

Evening Read

Illustration by Jonelle Afurong / The Atlantic. Sources: Marsell Gorska Gautier / Getty; naumoid / Getty.

Sex Without Women

By Caitlin Flanagan

What a testament to man—how noble in reason, how infinite in faculties!—that he continued doing anything else after the advent of online porn. Plenty of women, of course, consume and enjoy or create and profit from porn—people of every sexual orientation and gender identity do. But the force that through the green fuse drives the flower (and the money) is heterosexual male desire for women. And here was porn so good, so varied, so ready to please, so instantly—insistently—available, that it led to a generation of men who think of porn not as a backup to having sex, but as an improvement on it. They prefer it.

Read the full article.

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Stephanie Bai contributed to this newsletter.

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America’s superrich have always found ways to avoid paying taxes, but in recent years, they’ve discovered what might be the mother of all loopholes. It’s a three-step process called “Buy, Borrow, Die,” and it allows people to amass a huge fortune, spend as much of it as they want, and pass the rest—untaxed—on to their heirs. The technique is so cleverly designed that the standard wish list of progressive tax reforms would leave it completely intact.

Step one: buy. The average American derives most of their disposable income from the wages they earn working a job, but the superrich are different. They amass their fortune by buying and owning assets that appreciate. Elon Musk hasn’t taken a traditional salary as CEO of Tesla since 2019; Warren Buffett, the chair of Berkshire Hathaway, has famously kept his salary at $100,000 for more than 40 years. Their wealth consists almost entirely of stock in the companies they’ve built or invested in. The tax-law scholars Edward Fox and Zachary Liscow found that even when you exclude the 400 wealthiest individuals in America, the remaining members of the top 1 percent hold $23 trillion in assets.

Unlike wages, which are taxed the moment they are earned, assets are taxed only at the moment they are sold—or, in tax terms, “realized.” The justification for this approach is that unrealized assets exist only on paper; you can’t pay for a private jet or buy a company with stocks, even if they have appreciated by billions of dollars. In theory, the rich will eventually need to sell their assets for cash, at which point they will pay taxes on their increase in wealth.

That theory would be much closer to reality if not for step two: borrow. Instead of selling their assets to make major purchases, the superrich can use them as collateral to secure loans, which, because they must eventually be repaid, are also not considered taxable income. Larry Ellison, a co-founder of Oracle and America’s fourth-richest person, has pledged more than $30 billion of his company’s stock as collateral in order to fund his lavish lifestyle, which includes building a $270 million yacht, buying a $300 million island, and purchasing an $80 million mansion. A Forbes analysis found that, as of April 2022, Musk had pledged Tesla shares worth more than $94 billion, which “serve as an evergreen credit facility, giving Musk access to cash when he needs it.”

This strategy isn’t as common among the merely very rich, who may not have the expensive tastes that Ellison and Musk do, but it isn’t rare either. Liscow and Fox calculated that the top 1 percent of wealth-holders, excluding the richest 400 Americans, borrowed more than $1 trillion in 2022. And the approach appears to be gaining momentum. Last year, The Economist reported that, at Morgan Stanley and Bank of America alone, the value of “securities-backed loans” increased from $80 billion in 2018 to almost $150 billion in 2022. “The real question is: Why would you not borrow hundreds of millions, even billions, to fund the lifestyle you want to live?” Tom Anderson, a wealth-management consultant and former banker who specializes in these loans, told me. “This is such an easy tool to use. And the tax benefits are massive.”

[Annie Lowrey: Trump says his tax plan won’t benefit the rich—he’s exactly wrong]

You might think this couldn’t possibly go on forever. Eventually, the rich will need to sell off some of their assets to pay back the loan. That brings us to step three: die. According to a provision of the tax code known as “stepped-up basis”—or, more evocatively, the “angel of death” loophole—when an individual dies, the value that their assets gained during their lifetime becomes immune to taxation. Those assets can then be sold by the billionaire’s heirs to pay off any outstanding loans without them having to worry about taxes.

The justification for the stepped-up-basis rule is that the United States already levies a 40 percent inheritance tax on fortunes larger than $14 million, and it would be unfair to tax assets twice. In practice, however, a seemingly infinite number of loopholes allow the rich to avoid paying this tax, many of which involve placing assets in byzantine legal trusts that enable them to be passed seamlessly from one generation to the next. “Only morons pay the estate tax,” Gary Cohn, a former Goldman Sachs executive and the then–chief economic adviser to Donald Trump, memorably remarked in 2017.

“All of this is completely, perfectly legal,” Edward McCaffery, the scholar who coined the term Buy, Borrow, Die, told me. But, he said, the strategy “has basically killed the entire concept of an income tax for the wealthiest individuals.” The tax economist Daniel Reck, who has spent his career documenting the various ways the rich evade taxation, told me that Buy, Borrow, Die is “the most important tax-avoidance strategy today.” The result is a two-tiered tax system: one for the many, who earn their income through wages and pay taxes, and another for the few, who accumulate wealth through paper assets and largely do not pay taxes.

Much of the debate around American tax policy focuses on the income-tax rate paid by the very wealthiest Americans. But the bulk of those people’s fortunes doesn’t qualify as income in the first place. A 2021 ProPublica investigation of the private tax records of America’s 25 richest individuals found that they collectively paid an effective tax rate of just 3.4 percent on their total wealth gain from 2014 to 2018. Musk paid 3.3 percent, Jeff Bezos 1 percent, and Buffett—who has famously argued for imposing higher income-tax rates on the superrich—just 0.1 percent.

The same dynamic exists, in slightly less egregious form, further down the wealth distribution. A 2021 White House study found that the 400 richest American households paid an effective tax rate of 8.2 percent on their total wealth gains from 2010 to 2018. Liscow and Fox found that, excluding the top 400, the rest of the 0.1 percent richest individuals paid an effective rate of 12 percent from 2004 to 2022. (Twelve percent is the income-tax rate paid by individuals who make $11,601 to $47,150 a year.)

One solution to this basic unfairness would be to tax unrealized assets. In 2022, the Biden administration proposed a “billionaire minimum tax” that would have placed a new annual levy of up to 20 percent on the appreciation of even unsold assets for households with more than $100 million in wealth. Experts have vehemently debated the substantive merits of such a policy; the real problem, however, is political. According to a survey conducted by Liscow and Fox, most Americans oppose a tax on unrealized gains even when applied only to the richest individuals. The Joe Biden proposal, perhaps unsurprisingly, went nowhere in Congress. Making matters more complicated, even if such a policy did pass, the Supreme Court would very likely rule it unconstitutional.

[James Kwak: The tax code for the ultra-rich vs. the one for everyone else]

A second idea would be to address the “borrow” step. Last year, Liscow and Fox published a proposal to tax the borrowing of households worth more than $100 million, which they estimated would raise about $10 billion a year. The limitation of that solution, as the authors acknowledge, is that it would not address the larger pool of rich Americans who don’t borrow heavily against their assets but do take advantage of stepped-up basis.

That leaves the “die” step. Tax experts from across the political spectrum generally support eliminating the “stepped-up basis” rule, allowing unrealized assets to be taxed at death. This would be far more politically palatable than the dead-on-arrival billionaire’s minimum tax: In the same survey in which respondents overwhelmingly opposed broad taxes on unrealized assets during life, Liscow and Fox also found that nearly two-thirds of them supported taxing unrealized assets at death.

Even a change this widely supported, however, would run up against the iron law of democratic politics: Policies with concentrated benefits and distributed costs are very hard to overturn. That’s especially true when the benefits just so happen to be concentrated among the richest, most powerful people in the country. In fact, the Biden administration did propose eliminating stepped-up basis as part of its Build Back Better legislation. The move prompted an intense backlash from special-interest groups and their allied politicians, with opponents portraying the provision as an assault on rural America that would destroy family farms and businesses. These claims were completely unfounded—the bill had specific exemptions for family businesses and applied only to assets greater than $2.5 million—but the effort succeeded at riling up enough Democratic opposition to kill the idea.

The one guarantee of any tax regime is that, eventually, the rich and powerful will learn how to game it. In theory, a democratic system, operating on behalf of the majority, should be able to respond by making adjustments that force the rich to pay their fair share. But in a world where money readily translates to political power, voice, and influence, the superrich have virtually endless resources at their disposal to make sure that doesn’t happen. To make society more equal, you need to tax the rich. But to tax the rich, it helps for society to be more equal.