A Wealth Tax: $414 Billion For The People (Part 1)

The Time Is Now

Why You Might Want To Read This: A Wealth Tax is long overdue. The silver lining in the immoral, awash-with-phony-math Republican tax bill is that it laid the ground for a state-based campaign to win wealth taxes, especially in the states with citizen initiatives. This will be a three-part series, rolled out over a week to be kind to emails (if the topic is of no interest, delete but stick around for future topics!). TODAY—The Math and Data of a Wealth Tax. In the next two posts—answering the three (weak) Objections (Post #2—link since posted) and, then, (Post #3—the link since posted) the nationwide Campaign (surprise! winnable in “Red” and “Blue” states).

Big picture:

This is not simply about winning passage of a wealth tax—which should be a five-alarm call-to-arms for every credible organization. It’s a great opportunity, as you will see, to talk economics to people across the political spectrum and *shift* the political landscape.

PART ONE—THE MATH AND DATA.

The data below tells the story of the money we could reap from a very modest state-based wealth tax. The data comes from the Institute for Taxation and Economic Policy.

• ITEP’s “micro-simulation” math is golden. Even wing-nuts, who might attack ITEP’s general philosophy about fair taxation, rarely, if ever, assail ITEP’s datasets;

• The below chart is based on 2022 data from the IRS. It’s not easy to marshal this data but ITEP is working on an update; but…

• We can assume that the totals in the chart below UNDERESTIMATE by a lot the amount we could realize from a wealth tax because wealth accumulation has accelerated among the very rich every year since 2022. In just one year between 2024 and 2025, for example, the wealth of the 10 richest billionaires increased by $360 billion.

A few other observations from the chart.

I am advocating the most modest wealth tax proposal—2 percent. But, it’s worth taking a few minutes to absorb the numbers in the other columns.

Look at how few taxpayers the wealth tax on $30 million-and-up would touch: a 2 percent wealth tax on anyone with $30 million in wealth or more would hit only a quarter of one percent of all taxpayers overall, and in some states it’s even a smaller number. They are considered “ultrahigh” net worth and their ranks are growing:

The club of ultrahigh net worth individuals with more than $30 million in assets hit a record in 2024, according to estimates from the wealth-intelligence provider Altrata. The U.S. added more than 1,000 millionaires every day last year on average, according to UBS. The billionaire club grew more than 50% between 2015 and 2024. [bold emphasis added]

The total wealth of the ultrahigh $30 million-and-up net worth group is…

$38.8 trillion.

$38.8 trillion.

$38.8 trillion.

That is TRILLION with a capital “T”.

The chart, per the footnote, takes into account an 80 percent collection rate because we know that these Robber Barons, with their army of lawyers and accountants, will do everything to horde their obscene wealth.

A wealth tax should have been put in place long ago. But, today, is a particularly perilous time: Every state is facing significant, draconian, drops in budgets because of the Republican steal-from-the-people-give-to-the-wealthy bill.

Tops on that list will be huge drops in federal money to support Medicaid—which will have the effect of, let’s not mince words, killing people because roughly 15 million people will lose coverage (chart via Kaiser Family Foundation). That isn’t even the full hatchet to health care because that’s separate from the changes in the Affordable Care Act and the $268 billion ripped out of ACA coverages.

The cuts are politically neutral, brutally treating “blue” and “red” states equally:

Here’s another way of seeing that:

Kids will go hungry because of cuts to the Supplemental Nutrition Assistance Program (SNAP):

Essentially, since states can’t print money like the federal government, this means very simply: most states will have to cut health care and food assistance dollars or, to preserve health care and food, move money from other services like education, climate change projects, transportation or school infrastructure.

As one example, the New York-based Fiscal Policy Institute projects funding losses to New York State based on the cuts (billions of dollars):

A 2% New York state wealth tax would bring in:

EIGHTY-EIGHT (88) BILLION DOLLARS.

You can find projections for cuts for any state if you do your own search, and, then, match that to what a 2 percent state wealth tax would do. A taste:

• Each of the following states would be hit with at least a $4 billion hit to their budgets just on Medicaid cuts, especially targeting rural areas: Kentucky, North Carolina, Ohio, Illinois, Virginia, Michigan, New York, Washington, Pennsylvania, Oklahoma, Louisiana, and Arkansas.

• Kentucky would experience the largest rural Medicaid spending reduction, with a massive drop of over $10 billion over 10 years;

• But, Kentucky could net a tidy $2.7 billion per year from a 2 percent wealth tax.

The point is clear.

So, there’s the math on the money.

Now, on to the (weak) objections in Post #2.