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Billionaire wealth is an obvious fiscal target. It is highly visible, heavily concentrated, and measured in trillions of dollars. It is therefore natural to imagine that taxing it could finance a substantial expansion of government or materially ease the country’s fiscal problems.
But estimates of the long-run revenue from wealth taxes depend on assumptions about valuation, avoidance, capital flight, asset prices, and future investment returns. So I use a simple test designed to calculate an upper bound on sustainable revenue: how much permanent spending the government could support if it confiscated nearly all billionaire wealth, sold the assets at current prices, and suffered none of the behavioral responses such a policy would almost certainly provoke. If even this extreme case produces only a modest fiscal effect, realistic wealth taxes cannot be a major solution to the budget problem.
Suppose the United States confiscated all personal wealth over $1 billion. How much additional government spending could this expropriation sustain? My estimate is that it would only support about a one-time 2 percent permanent increase in spending from current levels. By contrast, real per capita spending has already increased by 2.4 percent per year since 2015.
My underlying assumptions are possibly reasonable for an extremely small wealth tax but are almost surely too optimistic for a large one. I assume that the government can expropriate about $8.3 trillion in billionaire wealth ($9.24 trillion in wealth as estimated by Forbes in June 2026, less the first billion for each of about a thousand billionaires)[i] and resell all the assets taken to other investors at no discount to current prices. Going forward, I assume that the new owners, who may include pension funds, foundations, foreign investors, and individuals who will have a tax basis equal to the expropriation price, will end up paying the same amount of tax each year as the government would have received from the billionaires. In addition to assuming that no wealthy person will take any action to avoid the expropriation, I assume the policy triggers no capital flight. However, I do not count any money the government might get from a follow-up expropriation of future rich people.
The sale proceeds would reduce government’s outstanding debt, allowing it to spend more each year than before while running the same deficit it would have had without the expropriation. As the interest rate on long-term Treasury Inflation-Protected securities is currently about 3 percent,[ii] this would imply that real interest payments could be reduced by around $250 billion per year. Adjusted for taxes that would have been collected on the reduced interest, I estimate the net budgetary benefit would be about $210 billion.[iii]
So, governments would have an additional $210 billion to spend, relative to 2025 consolidated expenditures of $10.988 trillion[iv], so a little under 2 percent—less, if we adjust for any future population growth.
By contrast, real per capita government expenditures in 2025 dollars rose from $25,348 in 2015 to $32,133 in 2025—an increase of 26.8 percent, or 2.4 percent compounded annually.[v] So the expropriation would finance about ten months’ growth. [vi] Part of the problem is that deficits and spending have grown so much that the expropriation would only get the (publicly held) debt back to roughly where it stood in 2022.
Augmenting the plan to expropriate half of all wealth between $100 million and $1 billion and all wealth above $1 billion would expand revenue to about $13 trillion,[vii] financing about a $325 billion permanent increase in real government expenditures or about 3 percent, so about fifteen months’ real growth at the current rate.
Soaring spending
While populists attack billionaires, they understand that their spending ambitions require much broader tax increases. For example, Senators Elizabeth Warren and Bernie Sanders have variously proposed raising payroll and investment taxes by 12.4 percentage points on incomes above $250,000,[viii] taxing accrued unrealized capital gains, raising corporate income tax rates to 35 percent,[ix] starting estate taxes at $3.5 million,[x] imposing wealth taxes beginning at $50 million,[xi] and so on.
Because the United States relies more on income taxes, provides refundable credits at the bottom, and lacks a national VAT, its tax rates are more progressive than those of Europe and the UK.[xii] European governments collect more revenue, much of it through broad-based consumption and payroll taxes that reach the middle class, and they spend it on larger cash transfers—which is where most of their redistribution happens. That is precisely the point of this essay. If we want government spending to exceed the current $84,000-plus per household for the purposes of greater redistribution, it will have to be financed by European-style broad taxation, not by just soaking the ultra rich.[xiii]
One problem we confront despite our progressive taxes is that our health care system is twice as expensive as in other countries. The US taxpayer contributes about half, but middle-class people find their net incomes depressed by employer-paid insurance premiums and larger out-of-pocket costs.
Compare the US and French health care systems. On the OECD’s harmonized measures, collectively financed health spending—government schemes plus compulsory insurance—ran to about $12,400 per person in the United States in 2024 against about $6,200 in France. Voluntary insurance and out-of-pocket payments together added roughly twice as much in the United States as in France, about $2,500 against $1,150; out-of-pocket payments on their own ran to something like $1,600 against $700.[xiv] The US figure counts employer-sponsored premiums, which are not taxes. Even setting those aside, federal, state, and local governments alone paid about the same per person as the entire cost of the French system.[xv] This even though the French population is significantly older than that of the United States.
If US consumers were able to access French-quality health care paid entirely with US taxes and could voluntarily choose whether to spend more, there would be no affordability problem for basic health care. But how much do we hear about making the system more affordable by improving efficiency rather than increasing taxes and subsidies?
Instead, improper payments across the Medicare program came to $56.7 billion in fiscal 2025.[xvi] Small Business Administration programs, meanwhile, disbursed an estimated $200 billion in potentially fraudulent COVID loans,[xvii] and fraud across the unemployment insurance system during the pandemic—the regular state programs together with the new federal ones—has been put at $100–135 billion.[xviii]
Similar stories can be told in other areas, particularly when looking at big cities. New York City spends more per public school pupil than any other large district in the country—now above $42,000 per student, well over twice the national average—with mixed results.[xix] The NYU Transit Costs Project showed that the Second Avenue Subway cost 7 to 13 times as much as comparable projects in Paris, Tokyo, and Copenhagen.[xx] High-income New Yorkers can be excused for thinking that with total expenditures of $145 billion per year, the city’s big problem is not that their taxes are too low.[xxi]
Yes, there are some government programs that have produced enormous social returns: Operation Warp Speed, which contributed to the rapid development of COVID vaccines, would be a recent example.[xxii] And some regulatory policies, such as the Clean Water Act[xxiii] and the Montreal Protocol for eliminating ozone-depleting gases,[xxiv] have been major successes. So, government can sometimes do great things. But spending more is not always the solution.
Power and conspicuous consumption
Finally, there are two non-budgetary reasons why some advocate for wealth taxes. One is that many people find beyond-lavish public displays of consumption to be tone-deaf or offensive. However, Gabriel Zucman, who advocates a coordinated global minimum tax on the very wealthy, used an estimate in his report to the G20 that US billionaire consumption excluding philanthropy was only 0.1 percent of wealth per year.[xxv] Even if we triple or quadruple Zucman’s estimate, billionaires would have no trouble maintaining their current level of consumption if wealth expropriation were “only” 50 or 75 percent.
Using Zucman’s estimates, billionaires pay about 0.6 percent of assets in personal taxes and about 22 percent of profits in business-level taxes (which we assume the government would collect from the new owners after the expropriation and sale). The larger part of profits goes back into savings and investment,[xxvi] which would be curtailed by the expropriation.
So, with a big wealth tax we would still have the Swift and Bezos weddings to kick around. However, $210 billion a year of private investment would likely be converted to government spending.[xxvii] So instead of more investment in Tesla and SpaceX, we might get pieces of the Green New Deal. Instead of investment in Amazon and AI, we might get more Mamdani state-run grocery stores. Alternatively, the whole windfall could be spent on sustaining the real increase in government-paid health care expenses from 2024 to 2026.[xxviii]
Last is the argument that with wealth comes power. Money appears to have little effect in general elections, but it matters much more where voters know less—primaries, open seats, low-profile statewide offices—and it does affect which issues reach voters at all.[xxix] For better or worse, in contrast to the other groups with outsize influence, billionaires are almost surely the most fiscally conservative. A wealth tax seems like an extreme way to deal with the political power of the wealthy, relative to, say, imposing gift taxes on large political contributions. But in terms of actual power, it is instructive to compare the wealthy elite with the political elite.
Taking total billionaire wealth and dividing by the number of billionaires gives $9–10 billion per person.[xxx] The federal budget is over $13 billion per federal elected official per year.[xxxi] So the politicians get to spend more in a year than the billionaires do in a lifetime, and they also get to make the laws.[xxxii] Even if Congress were populated by highly collaborative, extraordinarily skilled managers, this much budgetary responsibility would be overwhelming.
Yes, this overstates the current Congress’s budgetary power, since it does not appear to have much ability to reallocate money by reducing existing programs. On the other hand, this means that when it makes a new expenditure the real commitment is many times the annual amount. Of course, the power is not spread evenly across 537 politicians, just as it is not spread evenly across the thousand billionaires.
True, wealthy people may be able to deploy their resources more flexibly and effectively than Congress, even as Congress can give itself exemptions from regulations that constrain private parties. But this hardly seems like an argument for turning more resources over to the politicians.
There are tax loopholes that allow many high-income people to pay less taxes than most people would regard as fair. Examples are carried interest,[xxxiii] professional sports team depreciation,[xxxiv] and inflated conservation-easement deductions,[xxxv] none of which have been eliminated by either Democrats or Republicans when they controlled the federal government. And a very good case can be made for giving the IRS the resources to better enforce existing tax law, as applies to everyone.[xxxvi]
But as our expropriation analysis shows, higher taxes on billionaires will at most be a band-aid on our long-term budgetary problems.
[i] Americans for Tax Fairness, June 16, 2026, billionaire-wealth estimate based on Forbes real-time data. Billionaire Wealth Surges Past $9 Trillion.
[ii] US Department of the Treasury, nominal and real Treasury yield curve data. Interest Rate Statistics.
[iii] This assumes 2 percent inflation, which would raise bond income to about $410 billion, an assumption that two-thirds of the bond sellers would be tax-exempt, and the other third would pay 30 percent. If, consistent with our other assumptions, the sellers were the new owners of the expropriated assets and their tax brackets mirrored those of the former billionaires then the lost revenue would likely be greater.
[iv] Bureau of Economic Analysis via FRED, Government Total Expenditures, annual series W068RC1A027NBEA. Government total expenditures.
[v] Bureau of Economic Analysis via FRED, Government Total Expenditures, annual series W068RC1A027NBEA. Government total expenditures. Bureau of Economic Analysis via FRED, GDP implicit price deflator, annual series A191RD3A086NBEA. GDP implicit price deflator. Bureau of Economic Analysis via FRED, population, annual series B230RC0A052NBEA. Population.
[vi] If we allocated the entire tax to the federal government, and so nothing for the states, then the federal number would be 11 months. Real per capita federal expenditures (including grants to the states) rose by 34.9 percent, or 3.04 percent compounded annually from 2015-2025. With 2025 spending at $7.69 trillion a $210 billion increase would be about 2.73 percent, or just under 11 months’ growth.
[vii] Americans for Tax Fairness, June 16, 2026, billionaire-wealth estimate based on Forbes real-time data. Billionaire Wealth Surges Past $9 Trillion. The Wall Street Journal, citing an analysis of Federal Reserve data by Owen Zidar, estimated that 74,000 US households had net worth of at least $100 million at the end of 2022. The Rich Get More Numerous. The estimate in the text assumes no levy on the first $100 million of household net worth, 50 percent on the next $900 million, and 100 percent above $1 billion, so that every billionaire household retains $550 million. Household net worth above $100 million is taken to be about $25 trillion at current asset values, of which $9.236 trillion is held by 977 billionaires (using the billionaire-wealth estimate cited immediately above). The roughly 73,000 households between $100 million and $1 billion hold about $15.8 trillion, exceeding their exemptions by about $8.5 trillion, half of which is $4.2 trillion; billionaires yield $9.236 trillion less $550 million each, or $8.7 trillion. The total is about $12.9 trillion. The same calculation on 2022 data gives roughly $8 trillion. These are market values rather than realizable proceeds: forced sales, valuation disputes, avoidance, and administrative costs would all reduce what would actually be collected. The household count is also from 2022 and is probably higher now, which overstates revenue by understating total exemptions.
[viii] Office of Senator Bernie Sanders, 2025 Social Security Expansion Act fact sheet. Social Security Expansion Act Fact Sheet.
[ix] Corporate Tax Dodging Prevention Act, S. 991, 117th Cong. § 2 (2021) (Sanders; House companion by Rep. Schakowsky).
[x] Sens. Bernard Sanders and Elizabeth Warren, For the 99.5 Percent Act, S. 1178, 118th Cong. § 2(b) (2023), proposing a $3.5 million basic estate-tax exclusion and a $1 million lifetime gift-tax exclusion; see also American Housing and Economic Mobility Act of 2025, S. 934, 119th Cong. § 402(b), introduced by Sen. Warren and co-sponsored by Sen. Sanders, likewise proposing a $3.5 million basic exclusion.
[xi] Office of Senator Elizabeth Warren, 2026 Ultra-Millionaire Tax proposal. Warren, Jayapal, Boyle, 45 Lawmakers Renew Push for Wealth Tax on Ultra-Millionaires and Billionaires.
[xii] Thomas Piketty and Emmanuel Saez, How Progressive Is the US Federal Tax System? A Historical and International Perspective, NBER Working Paper 12404; and OECD, Progressivity of Labour Taxation in OECD Countries, in Taxing Wages 2026. OECD, Revenue Statistics 2025, Consumption Tax Trends 2024, and OECD Economic Surveys: United States 2024, on total tax burdens, the role of consumption taxes, and the absence of a US national VAT.
[xiii] See e.g. Joumard, Pisu and Bloch, “Less Income Inequality and More Growth—Are They Compatible? Part 3: Income Redistribution via Taxes and Transfers Across OECD Countries,” OECD Economics Department Working Paper No. 926 (2012).
[xiv] OECD, health expenditure per capita by financing scheme, in US dollars at purchasing power parity, 2024. Health expenditure per capita, Health at a Glance 2025; and OECD, Health spending. Government and compulsory schemes were $12,402 per person in the United States and $6,219 in France; voluntary insurance and out-of-pocket payments combined were $2,483 and $1,148 respectively. Out-of-pocket payments by themselves are much smaller than that combined figure. They were 10.9 percent of US and 9.3 percent of French health spending in 2023, which puts them near $1,600 and $700 per person at 2024 spending levels; on the domestic accounts, the Centers for Medicare and Medicaid Services report US out-of-pocket spending of $1,632 per person in 2024.
[xv] Centers for Medicare & Medicaid Services, National Health Expenditure Fact Sheet, reporting national health spending of $15,474 per person in 2024, of which the federal government sponsored 31 percent and state and local governments 16 percent, implying government payments of .47(15,474)=$7,273 versus French total costs including out-of-pocket of $7,367. two sides of the comparison rest on different accounting systems: this is a nominal-dollar figure from the US national health expenditure accounts, while the French figure is an OECD estimate converted at purchasing power parity. The comparison is therefore approximate.
[xvi] Department of Health and Human Services, Agency Financial Report, fiscal year 2025, and Centers for Medicare and Medicaid Services, Fiscal Year 2025 Improper Payments Fact Sheet: improper payments of $28.83 billion in Medicare fee-for-service, $23.67 billion in Medicare Part C, and $4.23 billion in Part D, or $56.7 billion in total, up from $54.3 billion in fiscal 2024. CMS cautions that improper payment measurement is not a measure of fraud: improper payments include overpayments, underpayments, and payments for which the documentation was insufficient to determine whether the payment was proper, and most involve a missed administrative step rather than fraud or abuse.
[xvii] SBA report 23-09, COVID-19 Pandemic EIDL and PPP Loan Fraud Landscape.
[xviii] GAO-23-106696. “Estimated Amount of Fraud During Pandemic Likely Between $100 Billion and $135 Billion.” Sep. 12, 2023. The estimate covers all unemployment insurance programs, the regular state programs as well as the temporary pandemic ones, from April 2020 through May 2023, and amounts to 11 to 15 percent of total benefits paid over that period.
[xix] Citizens Budget Commission, School Spending, Enrollment, and Fiscal Cliffs 101, together with subsequent Commission estimates putting New York City per-student spending above $42,000; some press accounts put the current figure nearer $44,000. See also Highest Costs, Middling Marks, reporting New York State spending of $29,873 per student in 2021–22 against a national average of $15,633. For the ranking and the national comparison, US Census Bureau, Annual Survey of School System Finances, fiscal year 2024: among the 100 largest school systems, New York City spent the most per pupil at $35,796, ahead of the District of Columbia at $31,529, against a national average of $17,619.
[xx] New York University Marron Institute, Transit Costs Project. The Transit Costs Project database; and Costly Lessons from the Second Avenue Subway.
[xxi] Office of the New York City Comptroller, New York by the Numbers: Monthly Economic and Fiscal Outlook, July 2026, reporting an FY 2027 adopted expense budget of $125.84 billion; and Office of the New York City Comptroller, New York City Cash Balance Projection, June 1, 2026, projecting $19.337 billion in FY 2027 capital expenditures.
[xxii] US Government Accountability Office, Operation Warp Speed: Accelerated COVID-19 Vaccine Development Status and Efforts to Address Manufacturing Challenges.
[xxiii] US Environmental Protection Agency, The Clean Water Act at 50.
[xxiv] United Nations Environment Programme, 2023 Scientific Assessment Panel findings on ozone-layer recovery under the Montreal Protocol. Ozone layer recovery is on track.
[xxv] Gabriel Zucman, report commissioned by the G20 Brazilian presidency, June 2024. A Blueprint for a Coordinated Minimum Effective Taxation Standard for Ultra-High-Net-Worth Individuals, pp. 17 and 22.
[xxvi] Gabriel Zucman, report commissioned by the G20 Brazilian presidency, June 2024. A Blueprint for a Coordinated Minimum Effective Taxation Standard for Ultra-High-Net-Worth Individuals. Akcan S. Balkir, Emmanuel Saez, Danny Yagan, and Gabriel Zucman, NBER Working Paper 34170, 2025. How Much Tax Do US Billionaires Pay?
[xxvii] As an accounting matter, a decline in private savings with no offsetting reduction in the government deficit will imply a reduction in investment and/or an increase in the current account deficit.
[xxviii] CMS calculations of all government 2024 health care expenditures totaled $2.512 trillion, or 47 percent of the $5.318 trillion national total reported in the CMS National Health Expenditure Fact Sheet. Adjusted for 2024–26 inflation and set against roughly $2.9 trillion in projected 2026 government-sponsored health spending, the two-year real increase is of the same order of magnitude as the $210 billion the expropriation would finance.
[xxix] John Sides, Lynn Vavreck, and Christopher Warshaw, The Effect of Television Advertising in United States Elections, American Political Science Review 116, no. 2 (2022): 702–718, assessing presidential, Senate, House, gubernatorial and down-ballot statewide races from 2000 to 2018 and finding that advertising has much larger effects in down-ballot elections than in presidential ones, and that the mechanism is persuasion rather than the mobilization of partisans.
[xxx] Americans for Tax Fairness, June 16, 2026, billionaire-wealth estimate based on Forbes real-time data. Billionaire Wealth Surges Past $9 Trillion.
[xxxi] Congressional Budget Office, Monthly Budget Review: Summary for Fiscal Year 2025. The budget-per-federal-elected-official figure in the text is the author’s calculation from total federal outlays.
[xxxii] Federal officeholders serve for terms of two to six years, so even ignoring the option of running for election, their aggregate power far exceeds one year’s budget.
[xxxiii] Congressional Budget Office, explanation and revenue estimate for taxing carried interest as ordinary income. Tax Carried Interest as Ordinary Income.
[xxxiv] Internal Revenue Service, Intangibles; and Congressional Research Service, Tax Provisions in the 2025 Reconciliation Law, on the amortization of acquired sports-franchise and other intangible assets. A provision capping the amortization of sports-franchise intangibles at 50 percent of adjusted basis passed the House but was dropped from the Senate substitute and is not in the enacted law, so buyers may still amortize the full basis over fifteen years. The Ways and Means Committee returned to the question at a hearing on July 1, 2026, without producing legislation.
[xxxv] Internal Revenue Service, “Conservation Easements,” describing syndicated conservation-easement transactions using promoter-driven, overstated valuations and reporting that courts have allowed, on average, approximately 6 percent of the deductions claimed.
[xxxvi] Congressional Budget Office, How Changes in Funding for the IRS Affect Revenues.
Jeremy Bulow is the Richard A. Stepp Professor of Economics at Stanford Business School. He served as the director of the Bureau of Economics of the Federal Trade Commission from 1998 to 2001 and was co-editor of the American Economic Review from 2005 to 2008.