Last week, Sen. Elizabeth Warren (D-MA) reintroduced in Congress her Ultra-Millionaire Tax, sponsored in the House by Reps. Pramila Jayapal (D-WA) and Brendan Boyle (D-PA). Their bill would impose a 2% tax on the portion of family fortunes that exceed $50 million, and 3% on any portion over $1 billion. Without demanding a penny more of tax from 99.9% of American families, it would raise some $3 trillion over 10 years for vital public services and to reduce debt.
Most people think about money in terms of income, because that’s what they live off. And we know our nation’s income inequality is pretty bad: in 2022, the highest-income fifth of households brought in over half of all income.
Fewer people think of money in terms of wealth, because most people don’t have much wealth. But there’s an important difference between income and wealth. Income is generally your salary: how much money you make over a week, month or year. Wealth is how much you own, minus what you owe. Wealth is also what you have accumulated over time.
And as skewed as income is in our country, wealth is far more lopsided. According to the Federal Reserve System, in 2022 (the latest year with available data) the richest 10% of Americans owned two-thirds of all the nation’s wealth. But wealth is even more dangerously concentrated than that.
According to ATF analysis of Fed and other data, the enormously rich households who are the exclusive targets of the Warren-Jayapal-Boyle legislation—fewer than 200,000 households who each have more than $50 million—held one-fifth of all the country’s wealth in 2022. Think of that: one in every five dollars in wealth in a nation of 335 million people owned by the number of folks you could fit into a big football stadium and its surrounding parking lots.
The 400 wealthiest U.S. billionaires alone held almost $4 trillion in net worth which is greater than all the combined wealth of the bottom half of American society, some 170 million people.
In many ways, wealth inequality matters more than income inequality. Wealth allows you to weather bad times, to feel a sense of security, to plan and prepare with confidence. Every family should have access to that kind of peace of mind.
But when such enormous amounts of wealth are hoarded at the very top of the financial ladder, it destabilizes our economy, disrupts our society and endangers our democracy.
One way to better equalize wealth is to tax excessive amounts of it, use the revenue to expand opportunities for working families through well-funded public services, and thus allow more households to build up a nest egg. Unfortunately, with only a few exceptions, our federal tax system as currently constructed doesn’t tax great wealth at all. It’s that deficiency in the present system that allows billionaires to go tax-free.
The Warren-Jayapal-Boyle bill would finally fix that. We could use the $3 trillion raised to build homes, expand healthcare, lower childcare costs, and make higher education more affordable, among other important public investments. The ultra-wealthy will still be living large, of course, but for the rest of us the world’s possibilities will seem a little bigger, too.