Every April, most Americans scramble to file their taxes, grumbling about refunds or what they owe. But for the ultra-wealthy, Tax Day is barely a blip on the radar. The richest among us have mastered a system that quietly lets them pay less—sometimes much less—than the average worker. But here’s the plot twist: a growing number of millionaires are saying, “Tax us more!”
This isn’t just a feel-good story about rich people wanting to give back. It’s a warning: America’s tax code, as it stands, is turbocharging inequality. And if we don’t fix it, we’re heading straight for an economic and democratic cliff. Let’s break down why this matters and what most people miss in the tax fairness debate.
Why This Matters
- Inequality at record highs: The top 1% now owns more wealth than the entire middle class combined. U.S. billionaires saw their fortunes soar by over $1.5 trillion during the pandemic alone (inequality.org).
- Eroding trust in democracy: When regular folks see billionaires paying lower effective tax rates than nurses or teachers, faith in the system evaporates.
- Threat to economic stability: Historically, societies with runaway inequality face unrest and stagnation. A healthy middle class is the engine of growth, not a shrinking afterthought.
What Most People Miss
- The “Buy, Borrow, Die” loophole: Many billionaires don’t technically “earn” income. They borrow against their assets to fund lavish lifestyles, then pass assets to heirs—dodging income and capital gains taxes almost entirely (CNN Opinion).
- Not all millionaires are the same: Earning $600,000 puts you in a different universe from those making $600 million, yet the tax structure barely distinguishes between them.
- Wages vs. wealth: The tax code favors passive wealth (capital gains, inheritance) over actual work. That’s upside-down economics.
Key Takeaways
- Tax all income equally: Treat capital gains and inherited wealth the same as wages, especially for gains over $1 million. This would close the biggest loophole that lets the rich skate by.
- Wealth taxes and minimum billionaire taxes: Proposals like President Biden’s Billionaire Minimum Income Tax would finally make untaxed gains taxable, targeting “hidden” billionaire wealth (White House).
- Restore progressive brackets: During America’s postwar boom, the top tax rate for the ultra-rich was as high as 90%. Now it maxes out at 37%—no matter how many millions you rake in (Tax Policy Center).
Timeline: How We Got Here
- Post-WWII (1940s-1960s): Top tax rates as high as 91%, robust middle class, booming economy.
- 1980s: Tax cuts under Reagan slash top rates, inequality begins to rise.
- 2017: Trump’s Tax Cuts and Jobs Act increases estate tax exemptions to historic highs, further shielding ultra-wealth.
- 2020s: Billionaires’ wealth surges during the pandemic. Calls for reform grow louder.
Pros and Cons of Raising Taxes on the Ultra-Rich
- Pros:
- Reduces inequality and strengthens democracy
- Funds vital public services (infrastructure, education, healthcare)
- Restores faith in a fair system
- Cons:
- Potential for capital flight if not coordinated globally
- Complex to implement and enforce (but so is the current system!)
Action Steps—What Would Real Reform Look Like?
- Tax all capital gains over $1M at ordinary income rates
- Replace the patchwork estate tax with an inheritance tax on actual received wealth
- Add new tax brackets for mega-incomes ($100M+), potentially up to 90%
- Implement a minimum tax on billionaires’ unrealized gains
“At the end of the day, money is money, whether you worked for it or inherited it. As an heiress and an investor, we should not be paying lower tax rates than people who earn their money from working.”
— Abigail Disney & Morris Pearl
The Bottom Line
America’s tax code is not just a ledger—it’s a mirror of our values. Right now, it shouts that inherited wealth and capital matter more than hard work. But as even some millionaires now argue, true prosperity and stability come from shared sacrifice and opportunity. The reforms they’re championing would not only rebalance the scales—they could just save our democracy.