A new report from Americans for Tax Fairness found that America’s richest families accumulated $8.5 trillion in untaxed capital gains in 2022
America’s wealthiest families held an astounding $8.5 trillion in untaxed profits in 2022. According to a report from the nonprofit Americans for Tax Fairness, which analyzed Federal Reserve data, “one in every six dollars (18 percent of the nation’s unrealized gains is held by these roughly 64,000 ultra-wealthy households, who make up less than 0.05 percent of the population.” The report comes as the Supreme Court gears up to decide a case that could preemptively block any efforts to tax the wealth of billionaires.
The data looks at “quiet” income generated by “centi-millionaires,” Americans holding at least $100 million in wealth, and billionaires through unrealized capital gains. Those gains accumulate, untaxed, as assets and investments like stocks, real estate, bonds, and other investments increase in value. If those assets are not sold — or “realized” — they are not taxed, yet America’s wealthiest families can leverage that on-paper value increase to secure favorable loans with low-interest rates in lieu of using taxable income to finance their lifestyle.
“Of the $139 trillion in America’s national wealth, almost three-quarters (73 percent) is held by the richest 10 percent of households, over one-third (35 percent) by the richest 1 percent, and an astounding 11 percent — $15.2 trillion — is held by the handful of fortunate households that make up the billionaire and centi-millionaire class,” the report says. “The wealthiest 1 percent of households hold 44 percent of national unrealized gains ($21.2 trillion), with billionaires and centi-millionaires alone controlling 18 percent ($8.5 trillion).”
Just to be clear, we’re talking about wealth taxes, not income taxes. Yes, the wealthy have all kinds of avoiding paying fair income taxes. But, this is a different issue, this is a wealth tax.
It’s important to realize, that most of the US already has a form of wealth tax: property taxes. The thing is, property taxes are a regressive form of wealth tax. Sure, the poorest people pay no property-wealth tax, because they’re not wealthy enough to own taxable property. This time they do catch a slight break. Anybody who is middle-class and lucky enough to own a home pay the highest percentage of their total wealth as property-wealth taxes, because virtually all their wealth is tied up in that property. The wealthy pay almost no property-wealth taxes relative to their total wealth because only a tiny amount of their wealth is tied up in property.
If you graph it out, at the bottom the effective wealth tax is zero, then it jumps to a much higher number, then it declines more and more as you get richer and richer.
I say screw property taxes and replace them with a proper progressive wealth tax. Along with that, an inheritance tax with teeth and proper enforcement. The grandkids of billionaires should be starting on an equal footing with everyone else.
It’s ok to just not defend the ultra wealthy that are destroying our economy and environment as a fun pastime.
A ruling against wealth taxes would be insane and would essentially overturn our entire history of tax law. But it would be especially nuts in light of the ruling in NFIB v Sebelius that the government can hit you with a tax for doing nothing. That seems utterly incompatible with the idea that the government doesn’t have the power to tax owning things and/or amassing wealth.
I guess that would mean you can tax not buying something, but you can’t tax not selling something.
You say that as if it’s a bad thing.