Recent polling by TGB (Tax the Greedy Billionaires) confirms what pollsters have been telling us for years: the public overwhelmingly believes, when it comes to taxes, that we have a fairness problem.
It was no surprise then, when I asked Perplexity.com whether the public believes billionaires are paying their fair share of taxes, that the response was: “The public overwhelmingly believes that billionaires are not paying their fair share of taxes in the United States. Major national polls taken in 2025 reveal that about three-quarters of likely voters, across party lines, say billionaires pay too little in taxes, and only a tiny fraction think they pay too much. Most Americans, including a majority of both Democrats and Republicans, support raising taxes on large businesses and high-income households.”
But what is “fair?” Although definitions of the word vary slightly, “fair” is something (or someone) that is reasonable, right and just. In the United States, the underlying principle of fair tax policy is that in order to fulfill government’s responsibilities, one should be taxed according to one’s ability to pay those taxes, referred to as progressivity.
So how do we determine one’s “ability?” At the outset, one must understand the distinction between income–the growth in one’s net assets, usually measured over the course of a year–and wealth, the total amount of money accumulated. When voters say that billionaires aren’t paying their fair share, they are implicitly recognizing that fairness relates to both income and wealth; that is, if two people each have $100,000 in income, but one has no wealth and the other has $10 million, the wealthier person has a greater ability to pay.
This is critically important because our current tax system is primarily based on an income tax that not only ignores wealth but favors it by, among other things, giving tax advantages to income derived from wealth (capital gains rates) compared to income derived from work. In short, we can never have a fair tax system–one based on ability to pay–that does not tax wealth.
Mother Jones published an article by Bob Lord, senior vice president for tax policy at Patriotic Millionaires, “Even Sky-High Income Tax Rates Won’t Stop the Relentless Rise of the Richest.” Great article…I don’t need to elaborate.
We do have varieties of a wealth tax already in place–estate taxes and state and local real estate taxes, which raise approximately $30 billion and $800 billion respectively, compared to federal income taxes of $2.4 trillion. It is worth noting that the small amount of estate tax revenue contributes to progressivity of the tax system whereas property taxes tend to decrease it. Senator Wyden has introduced the Billionaires Income Tax Act in the Senate, and Congressmen Steve Cohen and Don Beyer have introduced identical legislation in the House, that mimic a wealth tax by taxing unrealized capital gains, which represents a significant portion of many billionaire’s wealth. But none of these taxes are sufficient given the level of extreme wealth in the U.S.
Let me illustrate with my favorite food. Take out that bag of jellybeans you’ve been hiding, so that your spouse or your kids don’t know you have them. Let’s say the bag of jellybeans is worth $50 million (probably is, when you have that craving), which probably just about everyone would say is enough to satisfy one’s needs. A billionaire, though, has twenty enoughs, 20 bags of jellybeans. Bezos, Ellison, Zuckerberg– they have more than 2000 enoughs. And Elon Musk is approaching 10,000 enoughs, ten thousand bags of jellybeans! Too many bags of jellybeans are definitely not good for anyone’s health. So, what would be a fair tax for these guys to pay?
The answer is not simply billionaires should be paying more in taxes. How much more–how much would be reasonable, right and just–depends on five factors;
- What one thinks is enough- the amount of money that sufficiently provides for a wonderful lifestyle;
- To what extent the taxpayer is deserving of his or her wealth, e.g., can a CEO actually deserve to earn 300 times what the average worker makes, or in the case of a billionaire, receive investment income without doing any work, that is a thousand times greater than a teacher makes;
- What impact the tax rate will have on the economy;
- To what extent redistributing that wealth helps the government more effectively meet its responsibilities;
- And perhaps most importantly, how quickly would a tax reduce the concentration of extreme wealth and power in the hands of a few, which causes great harm to the lives of ordinary people, our democratic institutions and the planet.
Last month the National Bureau of Economic Research published a paper by four UC Berkeley economists, Akcan S. Balkir, Emmanuel Saez, Danny Yagar and Gabriel Zucman, titled “How Much Tax Do US Billionaires Pay? Evidence from Administrative Data.” In looking at the top 400 wealthiest Americans, they calculated their effective tax rate including federal, state, local and corporate taxes, at 24% of income. [Note: The Biden administration used a much lower 8% effective rate, but unlike the NBER report, it only included federal income taxes and included unrealized capital gains in income.]
Tax-the-billionaires advocates may have been disappointed to see such a high number (24%) but think of all those jellybeans. These ultra-ultra-rich keep more than three quarters of their income–even more jellybeans at the end of each and every year. Which explains, in part, why we will in the next few years see trillionaires…unless we (our electeds) do something about it.
That something is a wealth tax. TGB commissioned research on a modest Five and Dime Wealth Tax, which imposes a tax of 5% on wealth in excess of $50 million, and 10% on wealth in excess of $250 million. I say modest, because it doesn’t result in no billionaires, but it keeps the number of them at the current 1000 (with the current tax system that numbers rise to 2000 in ten years). The tax would raise close to $7 trillion and begin to chip away at the power of–and harms caused by–the ultra-rich.
The public’s instincts are spot on when it comes to taxing billionaires. Research by EWC, TGB and others will only demonstrate how right they are and help convince our elected officials to make our tax system reasonable, right and just. That seems only fair.