Why I Support a Global Wealth Tax
If it functions like income, it should be taxed as income – everywhere it lives, at what it's actually worth
A Declaration of Bias
This is an advocacy piece. I have a position, I am arguing for it, and I am not pretending otherwise. What I am doing — which is less common in advocacy writing — is showing you the analytical machinery underneath the argument. Every claim in this piece is flagged using the ULCR framework developed in the companion article, Why We Never Agree on Economics. The flags identify the unit of measurement, the level of analysis, the type of claim, and any cross-level moves being made.
You can disagree with the conclusion. That is what the argument is for. But you will know exactly what you are disagreeing with — what kind of claim, at what level, measured against what evidence. If you have not read the companion piece, the flags will still make sense in context. If you have, they will feel like a tool you already know how to use.
One more thing before we start: I am aware that advocacy for a wealth tax activates a specific fear in the American nervous system. That fear is not irrational. It has been earned. I will address it directly. But first, the buffet.
The Setup
The Buffet
Nearly fifty years ago, Americans were sold an idea about how the economy worked. The idea went something like this: the economy is a buffet. If we let the wealthy and the corporations go first — lower their taxes, reduce regulation, free up capital — the food would multiply. There would be more than enough for everyone. Prosperity would trickle down from the front of the line to the back. Be patient. It works.
So we tried it. We cut the top marginal income tax rate from 70 percent to 28 percent in less than a decade. We treated capital gains as a privileged category of income deserving lower rates than wages. We reduced the tax obligations of inherited wealth. We told ourselves this was the engine of growth, and we waited for the trickle.
Nearly fifty years later, here is what we know: the wealthy went first. They ate well. They are still eating. And the trickle — the great promised abundance that was going to flow back to the rest of us — turned out to be mostly a metaphor.
We are still at the table. The food is largely gone. The bill has arrived. And as we reach for our wallets to pay it — the national debt, the crumbling infrastructure, the underfunded schools, the health system that works beautifully if you can afford it — we are discovering something that should have been obvious from the beginning: while we were waiting for our turn at the buffet, the people at the front of the line were also going through our pockets.
Not maliciously, necessarily. Systematically. Which is worse, because systems don't stop when you ask them nicely.
This is not a conspiracy theory. It is an accounting. The mechanisms are documented, legal, and in most cases explicitly designed. What follows is the case — across three levels of analysis, with every claim flagged so you can see exactly what kind of argument is being made — for why a global wealth tax is not a radical idea. It is the minimum correction a functional society owes itself.
The Framework
Three Principles Before the Argument
Before the evidence, three governing principles. Everything else in this article follows from them. If you disagree with the principles, we are having a values debate — which is honest and important. If you accept the principles and disagree with the conclusions, we are having an empirical debate — which is also honest and important. Either way, you will know which one.
PRINCIPLE 1 If it functions like income, it is taxed as income.
Every person who earns a wage understands this principle viscerally. You work, you earn, you pay taxes on what you earned. The amount you owe is assessed on the income you actually received. This is so fundamental to the American tax experience that it feels like a law of nature.
It stopped being a law of nature at a certain level of wealth. Above that level, the dominant form of economic gain is not income in the wage sense — it is appreciation. Assets grow in value. That growth generates purchasing power, borrowing power, political power, and generational continuity — all the things income is supposed to provide — without ever triggering the tax obligation that income triggers. The principle that says you pay taxes on what you earn has been quietly suspended for the people whose earnings are largest. That suspension is the subject of this article.
FLAG (S, Me, E) Society · Meso · Empirical — the tax system is architecturally designed to treat appreciation differently from wages
PRINCIPLE 2 If you can borrow against it, insure it, or use it as collateral, the realization requirement is a legal fiction.
The primary technical objection to taxing unrealized gains is the liquidity argument: you cannot tax someone on money they have not received. This argument would be more compelling if it described the actual situation of ultra-high-net-worth individuals.
It does not. An asset used as collateral for a $500 million loan is not an illiquid theoretical abstraction. It is functioning as wealth in every economically meaningful sense. The bank assessed its value. The loan was extended against that value. The borrower received hundreds of millions of dollars in purchasing power — tax free, because it is technically a loan, not income — against an asset they have not sold and will not sell, because selling would trigger a tax bill that borrowing does not.
You don't get to be worth twenty billion dollars when you're talking to your banker and two billion dollars when you're talking to the IRS. Pick a number. It applies to both conversations.
The realization requirement was designed for a world where most assets were genuinely illiquid and where borrowing against them was limited. That world does not describe the financial reality of a person with $100 million in publicly traded securities. The legal fiction has become a mechanism — one of the primary mechanisms — by which the largest accumulations of wealth in human history have been built while generating minimal tax liability.
FLAG (I, Me, E, I-Me) Individual · Meso · Empirical · Cross-level: individual borrowing behavior enabled by institutional architecture
PRINCIPLE 3 Tax is paid where wealth is used economically, not where it is nominally registered.
A holding company registered in the Cayman Islands that owns assets generating returns through American financial markets, collateralized through American banks, insured through American institutions, and protected by American legal infrastructure — that is an American economic asset. The mailbox address in the Caribbean is a legal fiction layered on top of an economic reality.
This principle already exists in international tax law. The OECD's global minimum corporate tax, adopted by 136 countries, is built on exactly this logic: economic substance determines tax jurisdiction, not nominal registration. We applied it to corporations. The extension to individual wealth above $100 million is not a new principle. It is an existing principle applied consistently.
FLAG (S, Ma, E, Me-Ma) Society · Macro · Empirical · Cross-level: global institutional architecture enabling systematic jurisdiction arbitrage
These three principles together constitute the policy: annual assessment of tangible wealth above $100 million — stocks, bonds, real estate held as investment, private equity, assets used as collateral — at its actual economic value, paid proportionally to the jurisdictions where that wealth is economically active, with valuation required to be consistent across its uses. You cannot claim a different value for your tax bill than you claimed for your loan application in the same fiscal year.
The Case
Why a Wealth Tax Is a Good Idea
Start with the simplest version of the argument: the current system violates the principle that people pay taxes on what they earn, and it does so specifically and disproportionately for the people with the most.
The Two Tax Systems
FLAG (S, Me, E) Society · Meso · Empirical — structural description of how the system is actually built
The United States effectively operates two parallel tax systems. In the first system, you earn wages or a salary. Your employer withholds taxes before you receive the money. Your effective tax rate is visible, documented, and largely unavoidable. You do not have the option to defer your income into a future year where you might pay a lower rate. You do not have the option to convert your wages into a more favorably taxed category. You pay ordinary income tax on ordinary income, and the system is designed to make non-payment difficult.
In the second system, you own assets that appreciate. Your wealth grows — sometimes enormously, sometimes by billions of dollars in a single year — and you owe nothing on that growth until you choose to sell. If you never sell, you owe nothing, ever, because at death your heirs receive the assets at their current market value with the embedded gain permanently forgiven through the stepped-up basis provision. The second system does not withhold anything. It does not require payment on a schedule. It defers indefinitely and, in the most common scenario for inherited wealth, forgives entirely.
These are not two versions of the same tax system with different rates. They are two different systems operating on two different principles — one built around the idea that income is taxed when received, and one built around the idea that appreciation is taxed when convenient, which frequently means never.
FLAG (I, Me, N, Me-Ma) Individual · Meso · Normative · Cross-level: the institutional design embeds a judgment about whose economic gain deserves protection
The IRA Is Not the Same Thing
Here the CNS of the middle class is likely activating. You have a 401k or an IRA. The money in it grows tax-deferred. When you withdraw it in retirement, you pay ordinary income tax. Isn't that the same deferral?
It is not, for three reasons that matter.
First, the deferral in a retirement account is capped — in 2024, you can contribute $23,000 per year to a 401k. The deferral available to someone with $10 billion in appreciated equity has no ceiling. Second, you will pay ordinary income tax on every dollar you withdraw from a traditional retirement account. The stepped-up basis provision that forgives embedded gains at death does not apply to IRAs or 401ks — your heirs pay income tax on inherited retirement accounts. Third, you cannot borrow against your IRA to fund a lifestyle while the account grows untaxed and the loan goes unpaid indefinitely. The financial architecture available to the ultra-wealthy is categorically different from the tax-advantaged savings available to the middle class. Describing them as equivalent is the category error that forecloses the conversation.
FLAG (F, Mi, N) Family · Micro · Normative — the middle-class retirement account is a real asset; it is not the same instrument as a $20 billion equity position
Why a Wealth Tax Is Needed
A good idea does not automatically become a needed one. The case for need requires demonstrating that the current system is producing outcomes that are not accidental, not self-correcting, and not addressable through less structural interventions.
The Numbers
FLAG (S, Ma, E) Society · Macro · Empirical — aggregate distributional data
The wealthiest one percent of Americans hold more wealth than the bottom ninety percent combined. The wealthiest four hundred individuals — four hundred people — hold more wealth than the bottom sixty percent of the country. These are not figures from a tendentious progressive think tank. They are drawn from Federal Reserve distributional financial accounts and widely replicated across academic and institutional sources.
More importantly: the trajectory. In 1978, the share of national wealth held by the top one percent was approximately 22 percent. By 2023 it had risen to roughly 38 percent. This did not happen because the top one percent worked harder, or became smarter, or contributed more to economic growth. It happened because the structural features of the tax system — the two-system architecture described above — compounded over time in exactly the direction those features were designed to compound.
FLAG (S, Ma, E, Me-Ma) Society · Macro · Empirical · Cross-level: meso institutional design producing macro distributional trajectory
This is the r > g argument that economist Thomas Piketty documented across two centuries of data: when the return on capital consistently exceeds the growth rate of the economy, wealth concentrates. Not because of individual virtue or vice. Because of arithmetic. Money that earns money earns more money than work earns money, and the gap widens over time unless something interrupts it. The U.S. tax system, as currently designed, does not interrupt it. It accelerates it.
The Objection I Take Seriously
Here is the objection I take most seriously, and I want to address it directly before the nervous system of the middle-class reader closes the door.
FLAG (F, Mi, N, I-Me) Family · Micro · Normative · Cross-level: legitimate individual fear about institutional behavior over time
The fear is: they say it's for the wealthy, but these things always migrate. The Alternative Minimum Tax was designed to catch wealthy individuals who were avoiding all income tax. By the time it was reformed in 2017, it was hitting millions of upper-middle-class households who never should have been near it. The estate tax threshold has moved so many times that families with modest business assets have had to plan around it. The pattern is: a tax instrument aimed at concentration gets designed with a threshold, the threshold erodes through inflation or political adjustment, and the instrument ends up hitting people it was never supposed to reach.
That fear is not paranoia. It is pattern recognition based on evidence. It deserves a direct answer, not dismissal.
The direct answer is structural, not rhetorical. A wealth tax above $100 million with a threshold indexed to inflation and legally constrained from downward migration is a different instrument from an income surtax with no floor. The $100 million threshold is not an arbitrary number — it is the approximate level at which wealth begins functioning as a self-perpetuating engine rather than accumulated savings, where the collateral-borrowing loop becomes available as a substitute for income, and where the stepped-up basis provision becomes a primary inheritance mechanism rather than an edge case. Below that threshold, the existing system — with all its flaws — is the appropriate instrument. Above it, a different logic applies, and the threshold should say so clearly and permanently.
More importantly: the anti-gaming valuation rule described in Principle Two applies here too. If you are worth $98 million, you cannot borrow against $150 million in assets. The threshold is enforced by the same consistency requirement that enforces the valuation. Your net worth for tax purposes is your net worth for every other purpose. There is no manipulation available that does not also constitute fraud in the other direction.
What Is Already In Motion
The distributional argument — that wealth concentration is increasing and that the current system accelerates it — is the necessary foundation. But it understates the urgency. The relevant question is not just what the current distribution looks like. It is what is already in motion, structurally, as a consequence of that distribution — and what it will look like in ten or twenty years if the trajectory continues.
Capital Without Obligation
FLAG (S, Ma, E) Society · Macro · Empirical — systemic consequence of concentrated capital
When capital concentrates beyond a certain threshold, it begins to exit the competitive marketplace that is supposed to justify its existence. The classical argument for capital accumulation — that it funds investment, creates jobs, drives innovation — depends on capital being deployed productively and competitively. But capital at sufficient concentration does not need to be deployed productively. It needs only to be preserved and grown, which at scale it does automatically through the structural features of financial markets. The incentive to take risks, to back genuinely new ideas, to compete on merit, diminishes as the cushion of accumulated wealth grows large enough to absorb any conceivable loss.
This is not a moral claim about the character of wealthy individuals. It is a structural observation about what concentrated capital does. It accumulates. It hedges. It purchases protection from the competitive forces that are supposed to discipline it. And in doing so, it gradually transforms from a productive engine into a toll booth — extracting value from economic activity that others generate rather than creating new value of its own.
The Valuation of Democracy
FLAG (S, Ma, E, Me-Ma) Society · Macro · Empirical · Cross-level: macro wealth concentration converting to meso institutional capture
Here is the mechanism that makes the distributional argument urgent rather than merely unfortunate: concentrated wealth purchases concentrated political access. This is not a conspiracy. It is a market. Lobbying, campaign finance, media ownership, regulatory revolving doors, the funding of think tanks that produce the intellectual infrastructure for favorable policy — these are legal, documented, and extraordinarily effective mechanisms by which economic power converts into political power.
The consequence is measurable. Political scientists Martin Gilens and Benjamin Page analyzed over 1,700 policy questions across two decades and found that the preferences of average citizens had near-zero independent effect on policy outcomes when controlling for the preferences of economic elites and organized business interests. Near zero. The finding has been contested methodologically and is not the final word. But it is consistent with a substantial body of evidence pointing in the same direction: above a certain level of wealth concentration, democratic responsiveness to non-wealthy majorities degrades.
This is not a prediction about what might happen. It is a description of what the data already shows.
FLAG (S, Ma, N, Me-Ma) Society · Macro · Normative · Cross-level: the institutional consequence of wealth concentration is incompatible with democratic equality as a value
The normative claim is direct: a democratic system in which the preferences of the majority are structurally overridden by the preferences of a small economic elite is not, in any meaningful sense, a democracy. It is an oligarchy with democratic aesthetics — elections, speeches, the ritual of representation — without democratic substance. Whether the American public would endorse this arrangement, if asked to vote on it explicitly, is not a complicated question. They would not. The fact that it has emerged without being explicitly chosen is precisely what the levels-of-analysis framework in the companion article is designed to explain: structural outcomes do not require explicit decisions. They require only institutional designs that compound in a particular direction over time.
The Window
The fourth argument is the one I want to make carefully, because it is easy to state badly and important to state well.
Democratic systems have a self-correction mechanism built in. If a majority is being harmed by a policy or structural arrangement, they can, in principle, vote to change it. This mechanism is not perfect. It has always been manipulated, suppressed, and circumvented. But it exists, and its existence is the primary non-violent pathway through which unjust arrangements get revised without requiring the kind of rupture that leaves lasting damage to everyone, including those who were right.
The mechanism depends on certain conditions. Voters must be able to identify who is making decisions and hold them accountable. Information must be sufficiently accessible and accurate that majorities can form coherent preferences. The political system must be permeable enough that organized majorities can translate preferences into policy outcomes. Remove enough of those conditions and the self-correction mechanism fails — not dramatically, not all at once, but gradually, through the accumulation of institutional changes that individually seem manageable and collectively produce a system that is formally democratic and substantively closed.
FLAG (S, Ma, E, Me-Ma) Society · Macro · Empirical · Cross-level: macro wealth concentration systematically degrading meso democratic infrastructure
Concentrated wealth is systematically degrading each of those conditions. It funds the information architecture — the media ecosystems, the social platforms, the think tanks and advocacy organizations — that shapes what majorities believe is true and what options they understand to be available. It funds the legal infrastructure — the litigation strategies, the judicial appointments, the regulatory challenges — that determines what policies can survive implementation. It funds the electoral infrastructure — the campaign finance, the redistricting, the voter access battles — that determines whose preferences get translated into political power.
None of this is secret. All of it is documented. And the trajectory is not toward less of it.
The Honest Version of the Urgency Argument
I am not predicting revolution. I am not issuing a threat. I am making a structural observation that is available to anyone who looks at the data without requiring a political conclusion to arrive first.
Structural arrangements that produce sufficient injustice, over sufficient time, without sufficient mechanisms for non-violent correction, historically produce violent correction. This is not a radical claim. It is one of the most replicated findings in political history. The question is never whether a sufficiently unjust arrangement will eventually be challenged. The question is whether the challenge occurs through institutions — through elections, legislation, policy, democratic pressure — or outside them.
FLAG (S, Ma, E) Society · Macro · Empirical — historical pattern across democratic and pre-democratic systems
The window for institutional correction is not permanently open. It closes gradually, through the accumulation of exactly the mechanisms described above — concentrated wealth purchasing concentrated political access, degrading the conditions under which democratic self-correction is possible. We are not at the end of that process. We are somewhere in the middle of it, at a point where institutional mechanisms are still available, still functional enough to produce change, still accessible enough to organized majorities who understand what they are fighting for and why.
The case for a global wealth tax is not primarily about revenue, though the revenue would be substantial. It is not primarily about fairness, though the fairness argument is real. It is primarily about restoring the structural conditions under which a democratic society can govern itself — conditions that require that no private accumulation of wealth be large enough to purchase the system that is supposed to hold it accountable.
We do not need the injustice to become so acute that people reach for pitchforks. We need to choose something different while choosing is still possible.
The global wealth tax is one such choice. Not the only one. Not sufficient on its own. But a structurally significant intervention at exactly the level where the problem lives — not taxing individuals harder on income they have already earned, but taxing the accumulated stock of wealth that has been allowed, by deliberate architectural choices across five decades, to compound untaxed, to collateralize untaxed, to inherit untaxed, and to purchase political power untaxed.
If it functions like income, it is taxed as income. Everywhere it lives. At what it is actually worth.
That is not a radical proposition. It is the proposition that the existing tax system has been quietly violating, at enormous scale, for a very long time. The wealth tax does not introduce a new principle. It applies an old one, consistently, to the people for whom it has most conspicuously not applied.
The buffet is closed. The bill is real. And the people who ate the most have had fifty years to pick the pockets of everyone else.
It is time to settle the check.