Wealth Tax

 Wealth Tax

At a time when the ultrawealthy are amassing historic and dangerous levels of wealth, some propose a federal wealth tax. The  debt-ceiling crisis we are facing in mid-March is a direct result of giving tax breaks to the ultrawealthy. On February 12^th  House Republicans put forth a draft budget resolution that calls for $4.5 trillion in tax breaks that would unequally benefit the wealthy while proposing $2 trillion in cuts to Medicaid, Medicare, Social Security, and SNAP food stamps. While Social Security benefits cannot be cut through the reconciliation process, Supplemental Security Income (SSI) can.

We have surpassed the 1920s Gilded Age extreme wealth concentration in The United States. Since billionaires are almost all white and mostly male, wealth is also highly stratified by race and gender. Today, the United States has more income and wealth inequality than almost any major country on Earth.

At a time when millions of Americans are working two or three jobs to feed their families, the three wealthiest people in this country (Elon Musk, Mark Zuckerberg, and Jeff Bezos) own more wealth than the bottom half of all  the American people. The U.S. ranks sixth from the bottom among peer nations in the share of resources spent on public needs (less than a third of GDP). In contrast, European countries put closer to half of their economy into societal investments. That’s why European nations have universal health care, universal parental leave, and lower poverty. These social safety net programs pay off. People also live longer throughout western Europe than here.

Over the last 30 years, the top 1 percent has seen a $21 trillion increase in its wealth, while the bottom half of American society has actually lost $900 billion in wealth. This is a massive transfer of wealth from those who have too little to those who have too much. For the sake of our democracy and working families all over America who are struggling economically, that has got to change.

Wealth Tax as Transitional Measure

One of Vice President Kamala Harris’s policy proposals during her presidential campaign was a wealth tax—a 25-percent minimum tax on unrealized gains for taxpayers whose net wealth exceeds $100 million. This tax could bring in more than half a billion dollars of tax revenue over the next decade. 

While a wealth ceiling has its proponents, I propose a wealth tax at this point in time. This tax would establish a method for equalizing the tax burden in this country. A wealth tax would redistribute wealth from the top .1% to benefit the majority of citizens in this country.

 In his State of the Union address, President Biden proposed changes that would add revenue and improve tax fairness. The Billionaire Minimum Income Tax would phase in for those with wealth over $100 million, requiring that they pay at least a 20 percent tax rate on all income including unrealized capital gains. Currently, the morbidly wealthy can accumulate capital gains and pay no taxes if they don’t sell their assets. Correcting this could raise over $350 billion over a decade from only the extremely wealthy.

A wealth tax is one path toward reducing the federal deficit, which sits at an all-time high of more than $35 trillion. But it is not without its challenges.

1.      Wealth can be difficult to measure, as some of it exists in illiquid assets such as real estate and collectibles. 

2. To pay the taxes, taxpayers who are cash-poor yet asset-rich, may have to sell assets.
3. Taxpayers may leave the country to go where there is no wealth tax as happened when Norway instituted a wealth tax.

4.      The morbidly rich are able to evade taxes, so a wealth tax would be only another tax they are able to get out of paying.

Even with all these potential pitfalls, it is my contention that a 20-25% wealth tax is the optimal method to equalize the tax burden on US taxpayers. It would end the budget reconciliation passed by the House in which social programs like Medicaid and Snap food stamps would be cut $2 trillion through 2034. At stake is coverage for roughly 79 million people enrolled in Medicaid and its related Children's Health Insurance Program. So, too, at risk  is the financial health of thousands of hospitals and community health centers — and a huge revenue source to all states.

The resolution also authorizes the Ways and Means Committee to increase the deficit by $4.5 trillion over the same time period — this is the “instruction” that allows the committee to craft legislation to pave the way for the proposed tax cut for the wealthy of this same amount.

Medicaid covers Americans from the beginning of life to the end — paying for 4 in 10 births and care costs for more than 60% of nursing home residents. The program operates as a state-federal partnership, with the federal government paying most of the money and matching state funds regardless of how many people enroll.

What is Prout?

I call this wealth tax a transitional measure because the reality of the situation is that now, during tax season, 6000 IRS agents are slated to be fired by the Elon Musk DOGE (Department of Government Efficiency), presumably so that they will not be there to collect taxes from the wealthy, who are most likely to be audited for tax evasion. However, focus needs to be set on rescinding these cuts.

What we really need is a society which is based on the social welfare of all citizens, not on the upper tenth of one percent billionaire class. Prout (Progressive Utilization Theory) is a socio-economic system created by Prabhat Rainjan Sarkar in 1959. Prout is about economic democracy as well as political democracy. It’s based on Neohumanist philosophy, which encourages respect and love for all beings and the environment. The decentralization of wealth is a key point in a Prout economy. It is achieved by supporting local cooperatives and industry to meet the needs of communities, making them self-sufficient. A democratically restructured Prout economy is based on cooperatives, private businesses, and government-run large-scale utilities.

In Prout, all minimum necessities of life; food, housing, health care, and medical care, is guaranteed to all people. A minimum and maximum wage is created, to ensure that the purchasing capacity of all people is constantly increasing with 100% employment of citizens. After meeting the basic needs of all individuals, the excess of capital would be given to individuals, depending upon their service to society. The economy would be focused more on the bottom up, rather than top down, with elected boards governing locally. A strong national government would administer programs that help make localities strong and prosperous.

It is time for a more drastic measure like a wealth tax. I realize that such a proposal in this country or anywhere else is not something that will be popular and easily adopted. However, it is the best course of action to create equality of wealth and opportunities for all to live the life we all want to see. Everyone wants to be  free of struggling to make ends meet, and to be able to have the opportunity for the ‘life, liberty, and pursuit of happiness’ that the US Constitution sets out for all citizens.  We can achieve this wealth equality through the implementation of a wealth tax. Then we need to consider an alternative to capitalism. Prout is that viable alternative.

Notes:

https://www.oxfamamerica.org/press/press-releases/wealth-tax-vital-to-reduce-extreme-inequality-and-tackle-climate-crisis/

https://www.forbes.com/sites/block-advisors/2025/01/22/do-you-know-the-right-structure-for-your-small-business/

https://www.commondreams.org/news/house-budget-resolution

https://prout.info/to-tax-the-rich-or-to-cap-wealth-that-is-the-question/

https://toolstochangetheworld.org/modules/level-1/3-the-wealth-cap/

https://poole.ncsu.edu/thought-leadership/article/the-pros-and-cons-of-wealth-taxes/

https://thehill.com/opinion/finance/4782461-wealth-tax-supreme-court-decision/

https://proutglobe.org/2011/10/the-wealth-cap-and-other-practical-proposals-for-reducing-inequality/

https://berniesanders.com/issues/tax-extreme-wealth/

https://ips-dc.org/report-billionaire-bonanza-2018/

https://itep.org/worried-about-the-debt-tax-the-rich/

https://www.npr.org/sections/shots-health-news/2025/02/20/nx-s1-5303475/republicans-medicaid-cuts-trump-hospitals/

https://www.cbpp.org/blog/house-republican-budget-takes-away-health-care-food-aid-to-pay-for-expanded-tax-cuts-for/