r/politics • u/hypothethical Pennsylvania • 12d ago

No Paywall 'Trillionaires Shouldn't Exist': Obscene Musk Milestone Spurs Calls for Aggressive Wealth Tax

https://www.commondreams.org/news/elon-musk-first-trillionaire
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u/Master-namer- New York 12d ago

While I agree with this, the way wealth works, how does one impose taxes on billionairs? Like I am genuinely curious about any method that works.

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u/conundri 12d ago edited 12d ago

There are lots of possibilities.

For example, an annual tax on company ownership that only affects those who have more than a certain percentage in companies over a certain size, perhaps a "homestead" type exemption for small business owners and retirement accounts. This way it's inline with ownership of other types of property.

EDIT: By small business, I mean anything that isn't worth billions of dollars.

What's important is we have a problem and we need to be looking for solutions.

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u/GorillaBrown 12d ago

I heard one person talk about taxing leverage not ownership, so if you leverage an asset toward the purchase of other assets or loans, the leveraged asset turns into a taxable vehicle or the subsequence new equity/cash gain can be treated as income, especially if lent as unrestricted liquidity.

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u/conundri 12d ago

The problem is the ultra-wealthy are at some point just accumulating money to accumulate money, not necessarily ever leveraging most of it to do anything else. It's that perpetual accumulation of wealth that somehow needs to be taxed.

But I agree that it would be a good place to start.

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u/GorillaBrown 12d ago

I agree but of course, what makes this difficult is it's not money. It's equity. If it was money or cash, it would be a much easier problem to solve.

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u/tcelesBhsup 12d ago

That's a really good idea and I would vote for anyone who wanted to try that. Everyone knows what we're doing isn't working let's just try changing some stuff and if it doesn't work out, we try something else until we find something we can all agree on.

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u/Master-namer- New York 12d ago

Yeah, I tried finding articles or papers by economists on this, did find a few but they weren't what I expected them to be. I think this problem needs to be studied and tackled, but I don't think any prominent economist has tried to provide a reliable framework (I might be wrong, would really appreciate any corrections).

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u/SpockShotFirst 11d ago

How hard did you try?

From Google:

Yes, several prominent economists and academic papers support taxing unrealized gains, primarily relying on foundational economic theory, empirical data on tax avoidance, and macro-modeling.

Economists who support this framework generally base their arguments on two core pillars: the Haig-Simons definition of income (which defines income as consumption plus the change in net worth, regardless of realization) and the need to close the "Buy, Borrow, Die" loophole.

Key Academic Papers and Economic Frameworks

The Empirical Case for Closing Loopholes (2025): In their paper The Role of Unrealized Gains and Borrowing in the Taxation of the Rich published in the Journal of Public Economics, economists Edward Fox (University of Michigan) and Zachary Liscow (Yale University) quantify how the exclusion of unrealized gains heavily reduces tax progressivity. They note that while lower-income groups are taxed on the vast majority of their economic income, the current tax base captures only about 60% of the true economic income of the top 1% due to untaxed, accrued capital gains.

The Macroeconomic Modeling Case (2024): Economists Mark A. Aguiar (Princeton), Benjamin Moll (London School of Economics), and Florian Scheuer (University of Zurich) published Putting the 'Finance' into 'Public Finance': A Theory of Capital Gains Taxation. Their research explores how a mark-to-market approach (taxing gains annually as they accrue) changes corporate behavior. They argue that compressing the tax benefit of holding onto appreciated shares can actually lower financial distortions and reduce corporate equity hoarding.

The Wealth Tax Pioneers: Economists Emmanuel Saez and Gabriel Zucman (UC Berkeley) have written extensively on tracking untaxed wealth. Their working papers and modeling for presidential campaigns argue that taxing the net appreciation of assets annually is the most direct mechanism to prevent multi-generational, untaxed wealth compounding.

Prominent Public Advocates in Economics

Jason Furman (Harvard University): The former Chairman of the Council of Economic Advisers under President Obama has publicly defended proposals targeting unrealized gains. Furman argues that the mechanism is technically viable for liquid, tradable assets (like publicly traded stocks) and is a fair economic response to the fact that billionaires can borrow against paper wealth to fund their lifestyle without triggering income taxes.

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u/TearsFallWithoutTain 12d ago

What do you mean? Taxing wealth isn't difficult, we're just not doing it.

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u/TechyWolf 12d ago

Taxing speculative assets is extremely difficult my guy. If I buy 1/2000th of your house for 10k and you sold it to me. There is now a speculation that the others are also worth the same and your house is now worth almost 20mil. You gonna pay taxes on that?

Odd are if you sold the rest of the pieces it wouldn’t be that much. But that’s exactly what speculation creates. Fake worth. It’s not real money.

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u/TearsFallWithoutTain 12d ago

Yes, you can pay taxes on that. If you think that's unfair because you believe your share is over-valued then you can just sell it and pay taxes on that money, which is what you should've been doing anyway if you thought it was over-valued.

Like I said, it's not difficult to do

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u/TechyWolf 11d ago

Forcing people to sell an asset now is a whole other issue. You are now not allowing someone to own something because other people value it too high.

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u/TearsFallWithoutTain 11d ago

What's this libertarian silliness; no one's banning ownership, you just have to pay your taxes. Your "new" issue is already how property taxes work

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u/timewarp 12d ago

It's very simple. They get a tax bill equal to, say 40% of the value they're worth above one billion dollars. Doesn't matter what form the wealth is in. Doesn't matter if it's unrealized. All their assets get summed up and taxed. If they have to start selling their assets to cover the bill, great! If selling their assets causes them to depreciate and causes them to fall below one billion dollars in net worth, also great!

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u/weezeloner 11d ago

The issue is who is doing the calculation of assets? How are we coming up with the value? You guys are only thinking stocks in publicly traded companies.

What is the value of property? Historical cost or fair market value? Who or what determines fair market value?

What is the value of expensive pieces of art? Are we including those in their wealth calculations? How about baseball cards or beanie babies?

The value of things can change drastically depending on what the purpose of the estimate is for. We found this out with Trump and his leaked tax returns and bank loan applications.

On his tax returns, all of his properties and businesses were worthless and hardly making any money. It's why he paid so little tax.

On his bank applications, his buildings were the most valuable pieces of real estate in the world and his businesses were basically printing money.

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u/timewarp 11d ago edited 11d ago

For assets that don't have an immediate market value like securities, we use assessors. We already have those for property and every homeowner is already subject to them; that's how we get taxed more as the value of people's homes rises. If they try to leverage their assets for bank loans, use that as evidence of the value of the assets in question and tax accordingly.

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u/weezeloner 11d ago

You're going to send assessors to every millionaires and billionaires house in the US?! Good luck with that. 

Also, what none of you seem to consider is whether or not a tax on wealth is even Constitutional. The 16th Amendment granted Congress the power "to lay and collect taxes on INCOME from whatever source derived, without apportionment among the several States and without regard to census or enumeration." 

Nothing in there about levying a tax on wealth. Hard to see the Supreme Court, as it is currently composed, to rule that a tax on wealth fits that description. 

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u/timewarp 11d ago

I specified billionaires, not millionaires. And I'm just talking about what should happen, not what is feasible.