Here’s what’s been proposed—and why it never happens.
Fresh off his shellacking of former New York governor Andrew Cuomo in the Democratic primary for mayor, New York state assembly member Zohran Mamdani is the hottest guest on the press circuit. When asked on NBC if he thought billionaires have the right to exist, he chuckled. “I don’t think that we should have billionaires,” he said, “because, frankly, it is so much money in a moment of such inequality.”
The United States is a fiercely capitalist society based on the meritocratic idea that everyone has the opportunity to build their own futures—and fortunes. Billionaires typically make their money by starting companies that are engines of innovation, and which employ millions of their fellow citizens. Think Amazon. Nike. Wal-Mart. Microsoft. Google. If the U.S. were to enact a hyper-aggressive wealth and asset tax—the only way to truly attack fortunes of this size; most billionaires have little in the way of ordinary income—it might push many billionaires to leave the country and take their companies with them.
There’s another practical roadblock: The U.S. is led by a billionaire president who has surrounded himself with a posse of billionaires, all of whom are likely to fight off wealth tax proposals. Not to mention that Congress just passed a megabill that protects billionaires’ wealth more than ever before.
But, just for kicks, say that America really decided it wanted to get rid of its billionaires. How could that be accomplished? Short of firing squads and nationalizing much of the economy (see: Russia, 1917; Cuba, 1959), the only possible answer is massive, confiscatory taxes.
It has been tried before. At the onset of World War II, President Franklin Roosevelt proposed capping Americans’ post-tax income at $25,000, or $50,000 for couples (about $1 million today) because “all excess income should go to win the war.” Congress didn’t go quite that far, but got close, setting the top marginal rate at 94% in 1944 and 1945 and requiring the paycheck withholding system still in use today. European countries have experimented with wealth taxes for decades; in Sweden’s case, between 1950 and the tax’s abolition in 2007, the top rate hovered between 1% and 3% on large fortunes.
Today, taxes on wealth, as opposed to income, form the core of anti-billionaire crusaders’ plans to eliminate the largest fortunes. The national platform of the Democratic Socialists of America—Mamdani belongs to the New York chapter of the organization— includes a call to “redistribute wealth from the billionaires who hoard it to the workers who made it” via wealth taxation.
When running for president in 2020, Vermont Senator Bernie Sanders proposed a graduated tax on wealth over $32 million that capped out at a rate of 8% on anything over $10 billion, claiming that it would “cut the wealth of billionaires in half over 15 years.” Such a tax would cost the world’s richest person, Elon Musk, over $30 billion in the first year and, even assuming zero growth in his fortune, would take nearly 20 years to just get his wealth below $100 billion. He would likely be forced to annually sell an enormous number of Tesla shares to cover the annual payments. Many other billionaires, who have their wealth completely tied up in the ownership of a private company—say the Mars family, which owns the business that makes M&Ms and Snickers—would likely have to sell chunks of their company over time to cover the taxes. (Some proponents of these taxes insist they’d create carve outs to keep some of the biggest companies intact.)
Massachusetts Senator Elizabeth Warren’s 2020 plan would have taxed wealth over $50 million at 2% and wealth over $1 billion at 6%. She, alongside Washington Rep. Pramila Jayapal and Pennsylvania Rep. Brendan Boyle, have reintroduced her “Ultra-Millionaires Tax”—a similar policy that tops out at 3%—in Congress. Jayapal, who chairs the House Progressive Caucus, tells Forbes that she largely agrees with Mamdani’s idea. “I suppose if there was a scenario in which you could have a couple of billionaires, but everyone else was doing extremely well, that might be one thing,” she says. “But it seems that the way our tax policies focus, billionaires become billionaires at the expense of everyone else.”
“We don’t suffer from scarcity in America,” Rep. Pramila Jayapal, a Democrat who represents a Seattle-area district in Washington state, tells Forbes. “We suffer from greed.”
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University of Utah labor economics professor Marshall Steinbaum, taking a page out of FDR’s book, proposes pairing a 2% wealth tax with an income cap of $1 million. The math is brutally efficient: Over time, he says, by depriving the ultra-wealthy of the returns on their wealth and chipping a bit away each year, one could dramatically flatten wealth disparities in America. “I’m spitballing here, but in probably 20 or 30 years or so, most billionaire fortunes disappear over that time, and then the estate tax cuts it off at the end,” he says.
You’d need to put the IRS on steroids to make this sort of wealth tax work and police the wealthy from moving their money offshore. The U.S. would also have to implement an exit tax and negotiate complex tax treaties with other countries. “There would always be the Cook Islands and a few places like that that would try to be outside that system,” says Chuck Collins, who studies inequality at the left-wing Institute for Policy Studies and co-edits a website called Inequality.org. “But the reality is, most of those countries want to participate in a global economy. And so you can say, ‘Well, yeah, you need to sign on to a global tax regime.’”
Historically, money has tended to flee confiscatory tax regimes. When Washington state implemented a higher capital gains tax in 2024, Amazon founder Jeff Bezos moved to Florida, saving himself an estimated $1 billion in just 2024 alone. Multiple European countries have had similar experiences that led them to walk back or eliminate their wealth taxes—including the aforementioned Sweden in 2007. As for the dream of building a network of countries with taxes that cut down on billionaire-level wealth and leave the ultra-wealthy with nowhere to flee? “This idea of having some sort of unified wealth tax regime is pretty pie in the sky,” says Jared Walczak, vice president of state projects at the conservative-leaning Tax Foundation. “You would have to get a lot of countries to sign on to a tax that destroys wealth.” On top of everything else, a federal wealth tax could face legal issues, thanks to a clause of the Constitution requiring direct taxes to be apportioned among the states by population.
Even those who favor more progressive taxation than the current system are skeptical of policies specifically aimed at eliminating billionaires. “We don’t view the point of taxation as destroying wealth or punishing success,” Ben Ritz, policy development vice president at the center-left Progressive Policy Institute, says. “We view it as a necessary evil that helps make our country function.” Corey Husak, who directs tax policy at the liberal Center for American Progress, listed off more incremental policies, including reforming and raising the estate tax, ending various preferential treatments of business income, and changing how capital gains are taxed. Together, he estimates they could raise $2 trillion of new revenue over ten years—only a bit less than the magnitude of a wealth tax, based on independent analyses—without setting up an entirely new, historically ineffective system of taxation.
Americans, polling indicates, tend to agree: A Harris poll from last year found that 54% of respondents, including 44% of Democrats, don’t believe there should be a limit on how much wealth someone can accumulate. Three percent of respondents said there should be a limit above $10 billion, 15% said the limit should be between $1 billion and $10 billion, and 27% said it should be less than $1 billion. Dig in further and views get more nuanced: While 61% of Americans agreed with the statement “Billionaires are good for the economy,” 58% said that they contribute to inflation, 66% said they should pay higher taxes and 71% said wealth inequality is a “serious national issue.”
Even Mamdani, despite the national DSA’s stance, isn’t looking to tax all the billionaires in New York to oblivion. His plans for revenue include increasing New York’s top corporate tax rate from 7.25% to 11.5%, in line with New Jersey, and adding a 2% surcharge to personal income over $1 million. That’s hardly enough to vaporize anyone’s wealth, but to get even that, he’ll need New York governor Kathy Hochul’s buy-in, already a long shot. Mamdani didn’t respond to a request for comment for this article.
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