I agree you should want to avoid having an income disparity like this, but we are where we are. The goal of this tax is to help correct that disparity.
One argument could be that maybe entrepreneurial personality traits aren't normally distributed, and unless you find a way change people's personalities in mass, the imbalance in wealth attraction will remain inherent.
Then you might ask, if that's true, do you I want to enforce equality, potentially dragging down the economy to mediocracy (for example many stagnating European economies) or maybe accept that current nature does not meet our societal desire for equality.
Compound interest, and as (admittedly) an armchair economist I buy into the argument that goes along the lines of:
"when the rate of return on capital (r) is greater than the rate of economic growth (g) over the long term, the result is concentration of wealth".
In my view, r has been greater than g for some time now.
> Then you might ask, if that's true, do you I want to enforce equality, potentially dragging down the economy to mediocracy (for example many stagnating European economies) or maybe accept that current nature does not meet our societal desire for equality.
To me, it is clear that while Europe optimizes for quality of life to a large extent, Americans really drink the coo-laid and enthusiastically optimize for shareholder value. I highly encourage you to give life in Europe a go at some point. I hope you'll return (or stay) also having reached the same perspective.
I think for competitive and talented people, US in general offers much more lucrative opportunities as long as you're OK with the US specific drawbacks. For non-competitive people, living in Europe would probably be a more convenient.
I think the problem though is in the future, both the US and Europe has grave societal and economic issues but from the different angles. Europe lacks economical drive and seems to discourage change on a cultural level. The US on the other hand seems to be an extreme catalyst.
I'm not familiar enough with quantitative data to judge on the compound interest, nevertheless I think in the last few decades we have already been witness on the global level to major changes in wealth: empires like UK have shrank, giants like China have risen. This had been very different a few decades ago and is an anecdote at least that compound interest can only do so much for empires, in the face of major changes.
Only issue is, when you account for depreciation, you find that r>g applied to housing (so boomer NIMBYs) not billionaires.
This is not a Karl Marx thing, but a Henry George thing.
https://www.brookings.edu/articles/deciphering-the-fall-and-...
Luck always plays the biggest role. Maybe the billionaires would have always been successful in some way, but not be a billionaire or even a millionaire.
Also, your argument sounds like a just-so story designed to support the status quo.
> the imbalance in wealth attraction will remain inherent.
Is is really a good idea to be ruled by the people with the greatest "wealth attraction?"
> Then you might ask, if that's true, do you I want to enforce equality, potentially dragging down the economy to mediocracy (for example many stagnating European economies) or maybe accept that current nature does not meet our societal desire for equality.
Yes, because regardless of anything else, the wealth imbalance has been politically destabilizing. Your comment strikes me as out-of-touch quantitative thinking: making certain easily-measured numbers going up the highest goal, while ignoring other things that are harder to quantify. That's a blind spot shared by a lot of people, especially tech people.
It's simply because money is compoundable. The more money you have the more you can make, and the more you make means less other people have.
Having lots of wealth does not mean other people have less. If that were the case, there'd be as much wealth today as there was 1000 years ago. Making a company and having it valued at whatever value, does not remove that amount of wealth from other people.
And thinking about bubbles, imagine what happens when the GenAI one pops. The wealth some new billionaires had will go up in smoke, their assets will go on sale, and they'll be gobbled up by the old billionaires.
But I think still a lot of people would argue the distribution is too unequal.
Do you not see this? Probably because you don't feel it in your pocket (yet, let's see what happens when the USD crashes. I will feel it too, no doubt.)
There's the belief that the economy can be a mighty tool to improve our lives, but isn't it going pretty much overboard since some time? Is this materialistic growth-at-all-costs ideology really making average US lives better these days?
From the outside the US feels like a runner that is stretching its arm towards the finish line (total automation) while also falling on their ass.
I'm not particularly in favour of high taxation, but I think that the argument is a bit more subtle than that. The general point is that "the ultra rich" are able to benefit from a whole host of loopholes which allow them to pay proportionally less than the plebs.
Now, this specific point seems somewhat debatable, judging by the fact that people don't seem to agree; I personally have not looked into the matter to form an opinion.
Maybe our tax code hasn't kept up with the financialization of the economy. In any case, this whole tax increase thing, at least as I see it in France, since to spill over to "regular rich people", as in engineers or similar who "just" have a relatively high salary.
Another issue, which I think is different but is rolled into complaints about rising tax rates is what the state actually does with the money. As in "I'm ok with paying tax, but not to fund this or that thing". In France, specifically, many "public service" offices have closed, having people either travel great distances or fight half-assed computer systems, while, at the same time, the number of public servants (so, cost) has increased.
Why is it that we have to trim out nails when they grow? Why not leave it natural?
Why do we remove the weed in between the pavers in our backyard? Why not let it be natural?
The fact is the world around us needs constant work. Our capitalism is no different. It needs constant pruning or it becomes gluttonous. There was a book I think which said most people involved in illegal drug trafficking are barely getting by, most of the income is soaked up at the top. I don't remember the point the bio was trying to make but it feels like that way for any enterprise these days.
The richest people in the US have reportedly increased their net worth by over 1.5T over the course of the last year or so.
How is this sustainable?
The notion I'm getting is that these forces that drive change are bigger than all of us, and they are inherently unsustainable in the larger scale of things, pretty similar to how solar systems are not really sustainable in a scale much larger than us, but not that is still pretty small in a universal scale.
So for your perspective it might be unsustainable, but for the bigger system what you describe is smaller than a grain of sand.
Besides, there's this thing called tax incidence and it's not as simple as "tax the billionaires" because it's not clear how that plays out in terms of people's wages or middle class investments.
On the other hand, land value taxes would actually be incident on landowners.
Sounds like US vs Europe. Having redistributive policies funded by taxes works well until your most productive people flee for a country that doesn't, and you steadily lose ground to competitors economically.
It's going to be hard to provide all of that when you don't have the money for it (eg. fiscal crisis in France right now), or if you get invaded by your neighbor (or any other competitor) eclipses you economically and then uses that to subjugate you. The european model of reaping the peace dividend and using it to fund a more generous welfare state worked from 1990s to 2010s, but is breaking down with the rise of china and russia, and is further exacerbated by sluggish growth and the demographic/pension crisis.
This is the actual issue, which we often avoid talking about because it's grim. Like, health care is expensive, old people health care is really expensive, and the proportion of old people in many Western countries is increasing over time (because of a fall in birth rates). I believe the FT had a good article about this recently, where they showed that the vast majority of extra spending from government was on old people.
Now, clearly, society doesn't want to just shoot old people when they get sick, but I'm not sure how taxation is gonna look as the proportion of old people increases. Obviously increasing retirement ages helps here, but that's mostly just a massive tax on blue collar workers, who are much less likely to be able to continue working into their 70s, whereas for many cubicle jockeys, it's a lot more plausible.
70K a year is poor in California, but top 1% rich in almost any country in the world.
Low income disparities are countries like Albania, Afghanistan, Armenia to name the first three with below 30 GINI income.
The USA and UK are leading the process since they started to pursue this goal aggressively during the 80s with Reaganism and Thatcherism.
- 2.5M worth of real estate bought recently
- 1M of job income
- 1M selling shares that 10xed (some stock option idk)
- driving a 150k $ car
- spending 150k $ over the years in taxable goods
It came around 840'000 $ or around 40.1 %.
I wouldn't say it's that bad, this even includes sales taxes (probably the fairest of all taxes).
With even basic tax optimization (401k, federal deductions) you get that number down to 780'000 $, with something a bit more sophisticated depending on circumstances you can get it easily lower than 600k or 32% ish.
The biggest problem is that people above that tier end up effectively paying less sometimes even in absolute terms just by borrowing against their equity and not triggering taxable events.
Honestly taxes are complicated to implement, I'm not sure how can you implement a progressive yet fair system without loopholes and without severely degrading services (roads, infrastructure, education, healthcare, military, etc, etc).
And every time you decide to cut on services, you are just moving money elsewhere: more inequality -> more social tensions and criminality, you just end up paying way more to live in a safe place and pay for private and public security and prisons.
It's really difficult.
Of course there are still countries where one could park their money outside the OECD members but many of those are not exactly a "safe" place for such assets.
But universal is what we need as humanity.
The will seems to be building up, even in the UK (Polanski) and US (Mamdani, AOC, Sanders).
I'm betting that the success will be replicated in other countries soon and after that its only a matter of time for this to go global.
But this will be interesting show.
Long term: yes, especially if you combine really high taxes in the 40+% range with consistently rubbish public services
But the real question is not whether people will leave, the question is how many talented hard working people chose not to move to your country in the first place because your taxes were too high. It won't show up in any data, you'll just experience worse economic growth and have to tax everyone else more
That would still be considered a fair and reasonable level of tax by european standards.
Obviously there is a level though - if you made it 95% then people would leave. I don't think there's any reasonable argument that the level doesn't exist, the question is where is it for a specific place at a specific time
I'm happy to concede Massachusetts may very well have found the right balance, but there's plenty of studies on this in aggregate.
There's unsurprisingly a modest but statistically significant migration of millionaires from high-tax to low-tax jurisdictions.
https://www.asanet.org/wp-content/uploads/attach/journals/ju...
did the people ever leave ? NO
That figure is highly misleading to cite by itself because the high tax rate also came with a bunch of loopholes and exemptions. That's why despite the drop in the headline rate of 70-90% or whatever, the actual tax take as % of GDP has remained remarkably steady in the past 7 decades.
So it's not like it was actually a tax on the wealthiest, more a targeted tool to apply state power.
The loss of the richest man in the village might mean the baker now has to kowtow his prices to his less well-to-do neighbours again
https://worldpopulationreview.com/country-rankings/happiest-...
Extending their taxation or economic system to a larger, more populous, diverse, and economically fractured society would lose most of the reasons they're succeeding.
We have already tried that in human history, it's called communism. No one is allowed to take private profit, everyone contributes to the best of their own ability, and everyone consumes according to their needs. It should be utopia because there is no wealth gap and wealth is maximally redistributed. Which is exactly what taxation is designed to do, only to the most extreme.
And I think everyone will agree with me that communism is a miserable failure. The rich may not leave physically but mentally they are checkout -- not willing to work as hard or take as much risk. So the answer is yes, if you tax them, most certainly they will leave physically for haven with lower tax, all things being equalled. Or leave mentally.
But not all things are equalled, so you can still tax them at a somewhat higher rate provided that you can provide other incentives. But still, too much tax will make it more likely for those who are able to to leave. This is almost an axiom.
Just because someone has "communism" on paper doesn't mean the society actually functions according to the communist idea.
Social democracy has been tried in many places and it has produced things such as the Nordic Model and the Nordic states that have been very successful.
After the 2nd World War USA was very close to socialism. High wealth taxes, workers unions etc. As a result your average worker had a lot of purchasing power which of course fuels economic strength.
In fact many if the world's best performing companies are a kind of exercise in socialism since the RSU programs share ownership and results of the company to the workers (even if it's a small share)
Make stock buybacks illegal again too. Overturn Citizen's United unless the head of the company can face charges for the actions of their company.
The concentration of wealth into the highest strata is a recipe for societal collapse seen multiple times in history.
The wage earners feel the inflation in their wallets.
I don't get why we have to jump all the way to a wealth tax, could they not just force asset backed loans to trigger a tax? This seems way more targeted and we won't have people assessing what everyone is worth. I think it would avoid some unnecessary precedent setting. They could put the impetus on the billionaire taking the loan to state what the assets are worth and related gains.
How's this different than if CEOs or whatever were paid in cash, and then they immediately bought stocks with the cash?
Especially in UK where The Rich that dont belongs to UK in the first place will of course move and leave. Those who are born and raised are highly unlikely to move.
And perhaps most importantly the question completely ignore the real problem. There isn't a lack of Tax revenue, but the government incompetence to allocate and use it wisely. To raise tax is just saying what we are doing now is absolutely correct and we will continue to do so.
https://www.youtube.com/live/4HpJKPywXqY?si=bb-p558jl_otP25I
In her research she found that many of the ultra-rich people actually have deep/patriotic/nostalgic ties to their home/community and want to invest there. They often use certain tax-evasion measures because everybody else does and she argued that those few ultra-rich people who really just care about minimizing their taxes have already moved everything abroad.
If an owner takes out profit, they are punished with high income taxes. So they reinvest in their business, and this is what the government wants because it creates jobs, innovation, products and services, and tax income.
So they've been doing what they have been forced to do by the government. And as a consequence their companies are worth a lot.
Now the government wants to tax them on the company value?
If everyone would be able to play these tax avoidance schemes I'm sure society would collapse. For big players these are easy schemes and somewhere this untaxed wealth must be recaptured. Just favoring the rich further accelerates the wealth imbalance.
Would it? Or would it just shift demand around? I mean the money is still there, and I don't see any reason the entities with money would lock any more of it up in a "static" manner (e.g. gold bars and piles of cash) than they do now.
But everybody is able to reinvest profits into a business they have, whether that's an industry giant, or a tiny one-man shop. There is no government on planet Earth which considers that to be "tax avoidance". Governments want profits to be reinvested and not paid out to owners, even the most socialist governments you can find.
If you're against this, then you shouldn't talk about taxes. You should rather talk about abolishing private property completely.
Yes, that is the old discrepancy between society in the true sense and society as imagined by libertarians. A few strangers waiting together for the bus do not constitute a community. If the bus is canceled and they organize a carpool, then a community has formed. If you scale this up and replace personal relationships with institutions, you have a useful concept of society.
For libertarians, society is any large gathering of people who interact with each other in some way (or not), even if they rape and devour each other. If you understand society in this way, it cannot collapse (or is constantly collapsing).
That's been happening for a long time in the US. Staggering military industrial complex. Tens of billions lost in COVID relief. Billions lost in Minnesota due to unchecked privatized social welfare fraud (which has been known about for a decade).
Some mistakes will happen. What we have is unacceptable. If the government can't handle the money responsibly, it has no business collecting the money.
That's more an indictment of the way you (the US) starve your public services of proper regulatory power with the right level of personnel to handle it.
But your Congress voted last year to defund the IRS and the administration are busy gutting the SEC and other regulators.
Oh and government fraud has nothing on the commercial and rent-seeker frauds extracting wealth for no benefit from their positions of control. But anti-trust prosecutions are basically a dead path for rectification.
Blaming the "government" for what happens from obvious policy failures is the fault of the policies and those that set them, not the "government" as some nameless bureaucracy.
>Blaming the "government" for what happens from obvious policy failures
Who creates the policy that fails if not the government? If a supplier kept telling you they'd do something and kept screwing it up at what point do you move them to the bottom of your list for who to call to get stuff?
It's really easy to sit there enveloped in pure ignorance and say "those idiots just need to fund an administrative agency to prevent fraudulent daycare" or whatever but nobody in the US wants to do that because everyone's seen with their own two these sorts of endeavors turn into feeding troughs and revolving doors and rackets that the politicians and politically connected use to run businesses that make money by going through motions that provide little (just enough to keep some political support form useful idiots) value at taxpayer expense. How do you solve such a problem? It's immensely hard and complex.
I'm so sick of ideologues who can't think two steps ahead peddling these sorts of "just do this" simple and wrong solutions.
States are in dire need of liquidity. Just look at global debt.
Like, sure, you don’t owe growth taxes for a quarter when you didn’t grow. But why should you be refunded just because prior taxable growth isn’t denominated in money in a bank account?
Apparently paying for gas, water, electricity, property taxes, taxes on everything you buy isn’t enough, now you have to “contribute for enabling”. What’s next? Pay because they “enable you to breathe”?
It's like in a combustion engine. Oil has to be added for the engine to work. But over time, dirt particles, metal abrasion, soot, and combustion residues accumulate in the oil, overwhelming the oil filter and reducing its lubricating ability. If you don't reset it to a “healthy” basic state at regular intervals, it gets so bad that it prevents the engine from operating and ultimately even destroys it.
Does the massive wealth inequality we see today cause problems that lead to the erosion of society itself? I would say yes, definitely. Of course, it is frustrating for these people when the money they have generated is taken away from them. But let's look at it realistically: if someone has $100 billion and $99 billion is taken away from them, they are still in a situation where they lack nothing financially.
At some point, you've played capitalism through to the final level. And then you should put down the controller and go outside to listen to the birds chirping instead of frantically chasing after the growth of a number that, due to its sheer size, no longer has any concrete meaning, apart from the fact that there may be two other people whose numbers are bigger or who are hot on your heels.
I’m genuinely baffled at the incredulous tone here. Yes, that is exactly what should happen: laws, subsidies, and incentives enable a company to grow and flourish. Then, as the company grows, other laws incentivize it to give some of its state-sponsored affluence back to benefit the country.
Like, sure, the execution of that process is often dysfunctional, but the fundamental contract there does not seem like it should be surprising to people: we don’t have (many) socialist state-owned businesses, but the point of a functioning country is still to provide good things to the people living in it. Not to benefit businesses or a tiny sliver of the population.
That’s why we have everything from income taxes to interstate highways: to distribute wealth and resources to (a flawed approximation of, but it’s still the goal) everyone in the country. That’s just how non-corrupt governments are supposed to work!
If they all had unified in one voice against the administration, Trump might be more constrained. They might not be so hated. If they realized, like Henry Ford, that a strong middle class actually is good for THEM too, all this could be avoided. Instead they’re showing up at Melania screenings while average citizens are getting shot in the streets.
I don’t think they realize the fire they’re playing with my stomping on the social contract that made them so wealth.
Some of them do: https://news.ycombinator.com/item?id=42335797
But the pitchforks are coming for 12 years already. They got accustomed to the sight and even put some measures to redirect the masses so they fight each-other.
Bezos gave $40m to make the movie. It was a way to maintain his companies position. It's standard oligarch tribute to the godfather. See Russia or Hungary for further examples.
The movie cost nowhere near that much to make. Melania got the money. It was her very own little grift, while her husband and his children have been extracting literally billions.
Sadly, I'm far more worried about a thousand people who make a million bucks than I am about one guy who makes a billion.
You don't get to the B number by not being pretty darn shrewd and sociopathic so those guys must be pretty evil but man have the "upper middle class" or "professional managerial class" or whatever you wanna call the "comfortable enough to not think about the harsh economic realities of their ideas" class been an unmitigated disaster for western society over the past 20-70yr depending on how you wanna measure.
https://www.peoplespolicyproject.org/2025/11/17/do-millionai...
But that is usually a fairly large group, and if they feel taxes are too much, they will listen to any politician that promises a solution.
Then it can become pretty nasty...
Case study: New York City, United Kingdom, France, Germany, Denmark…
The list goes on until they choose; Texas, Florida, Singapore and Dubai.
To control for this look at NYC's share of the nation's millionaires, which shrank from 6.5% in 2010 to 4.2% in 2022.
https://cbcny.org/research/hidden-cost-new-yorks-shrinking-m...
I think taxes still handily win with room to spare. Even more: plenty of those rich people are still in NY and participating in its economy (legal residence != where you actually physically live, especially if you have resources to game residence by owning multiple properties).
[1]: https://dor.wa.gov/taxes-rates/other-taxes/capital-gains-tax
[2]: https://finance.yahoo.com/news/jeff-bezos-moved-florida-impa...
https://www.asanet.org/wp-content/uploads/attach/journals/ju...
[0] https://www.forthcapital.com/uk/articles/2025-wealth-migrati...
[1] https://www.henleyglobal.com/publications/henley-private-wea...
People are always defending rich people (capital owners) that they invest their wealth. But actually if someone has a billion in the bank the fact that they have that billion is a proof that they didn't invest it. (If they did spend it or invest it the would not have it, now would they?)
A billion that circulates in the economy is much better than a billion that sits in someones bank account. Someone who spends 100% of their income is much better economic citizen than someone who doesn't.
This is still not a good idea for you, as the interest doesn't make up for inflation. Most people keep a small portion of their wealth in the bank, as easy access for emergencies (this is called dry powder[0]). The rest is typically invested into private equity, which allows new ventures to be created.
It's very rare for anyone to have more than $50m in the bank. The money is usually out in the market doing it's work.
This is the trickle up economy where the few people at the top suction all the wealth to themselves. And the rate at which they acquire it exceeds the rate at which they spend it.
I would hesitate to call consumption "better" than investment.
The health of an economy is defined by the permeability of the border between those two classes, and the direction of flow.
If the flow is mostly one way, you're getting wealth extraction, not investment.
But assets are not easy to move. So if you tax assets and not income, it doesn't matter where the owners are. It only matters where the assets are.
1) velocity of money matters, some spending creates more economic activity than others due to re-spending.
2) Investment is not the same as having your money sitting idle. Investment makes certain activities possible because of scale, payment made with the expectation of future value, financing capital goods or R&D, etc.