Tax Billionaires

The United States has created more billionaires than any country in history while allowing them to pay lower effective tax rates than teachers, nurses, and firefighters. This is not an accident of economics—it is a policy choice. For decades, Congress has slashed top marginal rates, created loopholes for investment income, and starved the IRS of enforcement resources. The result is a system where working families fund the government while billionaires accumulate dynastic wealth largely untouched by taxation.

The numbers are staggering. According to economists Emmanuel Saez and Gabriel Zucman at UC Berkeley, the richest 0.1 percent of Americans have seen their share of national wealth triple from 7 percent in the late 1970s to over 20 percent today.¹² Meanwhile, the bottom 90 percent has seen its share plummet from 35 percent to just 25 percent over the same period. This concentration of wealth at the top has reshaped American society, distorting our politics, hollowing out the middle class, and undermining the basic promise that hard work leads to prosperity.

The wealthiest Americans do not accumulate this wealth through income that gets taxed like a paycheck. They build fortunes through stock appreciation, real estate holdings, and business ownership—assets that are never taxed until sold, and often never sold at all. When they need cash, they simply borrow against their assets, accessing billions in spending money without triggering a single dollar in capital gains taxes. As Representative Dan Goldman has documented, billionaires live tax-free by borrowing against their stock portfolios, real estate holdings, and art collections without paying a dime in taxes on that money.

A History of Higher Rates

The argument that taxing the wealthy at higher rates would destroy the economy is contradicted by American history. During the Eisenhower administration—a period many conservatives remember fondly for its economic prosperity—the top marginal income tax rate exceeded 90 percent.³ This was not an aberration. From the mid-1940s through the mid-1960s, top marginal rates remained above 90 percent, and the economy boomed. The middle class expanded dramatically, wages rose steadily, and massive infrastructure investments transformed the nation.

The 91 percent rate during the Eisenhower years applied only to income above approximately $200,000—equivalent to roughly $2 million in today’s dollars. Most wealthy Americans did not pay this full rate due to deductions and other provisions, but the high marginal rate served a crucial function: it discouraged the extreme accumulation of personal wealth and encouraged corporations to reinvest profits into their businesses and employees rather than extracting massive executive payouts.

Since the Reagan administration began slashing top rates in 1981, we have witnessed a dramatic transfer of wealth from working families to the very top.⁴ The top marginal rate fell from 70 percent to just 28 percent by 1988. It has fluctuated since then but remains at 37 percent today—less than half what it was during the post-war economic boom. This collapse in top rates coincides precisely with the explosion in wealth inequality documented by economists.

Federal Proposals to Tax the Wealthy

Members of Congress have introduced several proposals to address the undertaxation of extreme wealth. Senator Elizabeth Warren and Representatives Pramila Jayapal and Brendan Boyle have introduced the Ultra-Millionaire Tax Act, which would impose a 2 percent annual tax on wealth above $50 million and a 6 percent tax on wealth above $1 billion.⁵ This tax would apply to approximately 75,000 households—the wealthiest 0.05 percent of Americans—and raise an estimated $3 trillion over ten years.⁶

Representatives Steve Cohen and Don Beyer have introduced the Billionaire Minimum Income Tax Act, which would require households worth more than $100 million to pay at least 25 percent in taxes annually on their full income, including unrealized gains.⁷ This addresses the fundamental inequity where billionaires can accumulate vast fortunes without ever recognizing taxable income. Over 75 organizations have endorsed this measure, including the AFL-CIO and Americans for Tax Fairness.

Representative Dan Goldman has introduced the ROBINHOOD Act, which targets the “buy, borrow, die” strategy that allows billionaires to access their wealth tax-free by borrowing against assets.⁸ The bill would impose a 20 percent excise tax on loans backed by capital assets for high earners, generating an estimated $276 billion over ten years. This revenue could fund universal pre-K for all four-year-olds or restore pandemic-era childcare investments.

Representative Alexandria Ocasio-Cortez has proposed raising the top marginal income tax rate to 70 percent on income above $10 million.⁹ Polling found that 59 percent of registered voters supported this proposal, including 45 percent of Republicans.¹⁰ This rate would still be lower than what existed throughout the Eisenhower, Kennedy, Johnson, and Nixon administrations.

Understanding Marginal Tax Rates

A common misconception—often exploited by opponents of progressive taxation—is that a 70 or 90 percent marginal rate means the government takes 70 or 90 percent of someone’s entire income. This is false. Marginal rates apply only to income above specific thresholds, with lower rates applying to income in lower brackets.

Consider a hypothetical 70 percent marginal rate on income above $10 million, as proposed by Representative Ocasio-Cortez. A person earning $15 million would pay the standard rates on their first $10 million—the same rates as everyone else at those income levels—and only pay 70 percent on the $5 million above the threshold. Their effective tax rate would be far below 70 percent.

This progressive structure ensures that taxes increase with ability to pay. A nurse earning $80,000 and a hedge fund manager earning $30 million both pay the same rate on their first $80,000 in income. The higher rates apply only to income that most Americans will never earn—income that represents not hard work but the compounding returns of existing wealth.

Why This Matters for Working Families

When billionaires pay lower effective tax rates than working families, the burden of funding government services falls disproportionately on everyone else. Roads, schools, national defense, Medicare, and Social Security must be paid for somehow. Every dollar that billionaires avoid in taxes is a dollar that must be made up through higher taxes on the middle class, reduced public services, or increased national debt.

The undertaxation of extreme wealth also distorts our democracy. Billionaires use their untaxed fortunes to fund political campaigns, lobby Congress, and shape public policy in their favor. They purchase media outlets that amplify their preferred narratives. They fund think tanks that produce research supporting lower taxes on the wealthy. The concentration of wealth becomes self-reinforcing: the rich use their riches to ensure policies that make them richer still.

Higher marginal rates would not eliminate billionaires, but they would reduce the incentive to accumulate personal wealth beyond any reasonable measure. When top rates were 91 percent, corporations reinvested profits into wages, research, and expansion rather than extracting maximum payouts for executives and shareholders. A return to higher rates could help rebuild the broad-based prosperity that defined the mid-twentieth century American economy.

We Must Tax Billionaires

I support the Ultra-Millionaire Tax Act, the Billionaire Minimum Income Tax Act, and the ROBINHOOD Act. I support raising the top marginal income tax rate to at least 70 percent on income above $10 million, returning to the rates that prevailed during America’s greatest period of middle-class expansion. I will fight to close the loopholes that allow billionaires to live tax-free while working families pay their fair share.

Wealth inequality at current levels is incompatible with democracy. When 0.1 percent of households control 20 percent of national wealth—and use that wealth to purchase political influence—we no longer have government of, by, and for the people. We have government of, by, and for the billionaires. Progressive taxation is not class warfare; it is the restoration of the basic principle that those who benefit most from American society should contribute most to its maintenance.

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