Chapter 5 — A Shareholder Society – The Commonwealth

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The people who can’t wait

Everything so far has a quiet assumption buried in it: time. The seed works because a newborn has sixty years for eighteen thousand dollars to become a million. The scale-threshold rule works because it catches the giant companies of the future as they cross the line. Both are patient mechanisms, and patience is a luxury of the young and the not-yet-born.

But most of the country is neither. The person reading this is probably somewhere between twenty and sixty, with a job, a mortgage, some retirement savings that won’t be enough, and nowhere near sixty years left for compounding to do its work. The seed can’t help them; they’re already born. The scale-threshold can’t help them; it fills accounts that don’t yet have their name on them. If the shareholder society only ever reaches the newborns, then everyone alive today spends the rest of their life watching a good idea arrive one generation too late.

So this is the chapter about the people who can’t wait — the hardest problem in the book, and the one I’ve been promising to face instead of dodge. How does someone who’s already forty get a real stake in the productive economy, starting now?

There’s only one honest answer, and it’s the word I’ve been circling the whole way: redistribution.

Redistribute the growth

Right now the bottom half of Americans own about one percent of the stock market — one percent total, split among a hundred and sixty million people. Effectively nothing. The goal of this whole project, put plainly, is to change that: every adult owning a real, meaningful piece of the productive economy — a stake worth tens of thousands of dollars at least, enough that ownership is a fact of their life rather than something only other people have. Keep your eye on that floor, not on the gap between top and bottom. This was never about making the rich less rich. It’s about giving the people at the bottom something real to own.

We do take some of the existing pile: a small slice each year, a larger one at death. But we take it slowly, and the economy grows faster than we take it, so the people at the top keep getting richer in dollars even as their share of it shrinks. We aren’t clawing back the fortunes that exist. We’re redistributing the growth on top of them — bending who gets the next trillion, not seizing the last one.

The economy will be far larger in sixty years than it is today — the one safe bet in the whole book. Money left in the market and reinvested has historically doubled in real terms about every decade, so over sixty years the pie doesn’t just grow, it grows many times over. Everyone who owns a piece rides that same curve. The top ten percent, who hold about 87 percent of the market, end up many times richer in real dollars than they are now — and, I won’t pretend otherwise, they stay right around 87 percent, because they compound alongside everyone else. This does not shrink their slice. What it does is hand the people who own nothing today a real, compounding piece of that growing pie. Sixty years out, the point isn’t that the bottom half finally caught the top. It’s that the bottom half, for the first time, owns something worth owning.

That’s the move the crude “tax the rich” crowd never reaches, because they’re fixated on the pile that exists today. Slice up today’s pile and you get capital flight and a wrecked engine — the whole disaster of the last chapter. Redistribute a modest share of tomorrow’s growth, patiently, and the arithmetic does the work while everyone, top to bottom, comes out ahead in absolute terms. It’s the most win-win redistribution ever proposed, and it only works if you’re willing to be patient — which, over a sixty-year transition, we can afford to be.

The spine: redistribution at death

So where does the redistributed growth come from? The primary source should be the one almost nobody can reasonably object to: death.

When a very large fortune passes at death — past some high threshold, the dynastic-wealth tier, not the family-farm tier — a portion of it converts into Commonwealth shares and is distributed to citizens. That’s the spine of the whole mechanism, for four reasons.

It touches no one while they’re alive. Nobody is forced to sell a company they’re still building or hand over a stake they’re still using. The wealth moves only when its owner no longer can. There is no more painless moment to ask.

It targets the thing almost everyone already finds indefensible. Ask across the political spectrum what kind of wealth is least earned and you’ll hear the same answer: the fortune you were simply born into. A hereditary aristocracy of capital — dynasties compounding across generations who did nothing but be born correctly — is the one form of concentration even hard-core defenders of markets struggle to justify. Redistribution at death aims squarely at that, and leaves the earning and building untouched.

It fits the clock we’re already on. I’ve said from the start this is a sixty-year transition. Here’s the quiet fact that makes death the right lever: the people who own most of the wealth today will be gone within that same sixty years. The transition timeline and the mortality timeline are the same timeline. We don’t have to pry anything out of anyone’s hands. We just decide, now, where the largest fortunes go when their owners are done with them — and then wait, which we were going to do anyway.

And it asks the current rich for something they can actually give: their assent to a rule that costs them nothing in their own lifetime. Some will fight it out of dynastic ambition. But it’s a far easier sell than anything that reaches into a living person’s holdings — you’re not asking them to be poorer, only to let go at the one moment they have no choice but to let go.

And there’s a hard-nosed reason to make this a share conversion rather than just a bigger estate tax: the estate tax we already have barely works. In a recent year it raised only about $18 billion, and touched fewer than one death in a thousand. On paper, the tax takes 40 percent — that’s the top rate the law sets on a fortune passed at death. Almost no one pays anything close. Deductions and exemptions carve down the taxable pile first, so even among the estates big enough to owe anything, the average one hands over about 16 percent of its value. And the very largest fortunes often pay an even smaller share, not a bigger one — because the biggest estates route enormous sums into charity and private foundations, every dollar of which comes off the top, untaxed. The more you have, the more you can give away before the tax ever applies. A 40 percent rate that in practice collects 10 to 16 percent isn’t much of a rate.

Now weigh that against the people it’s aimed at. In a typical year, roughly $60 billion of wealth held above ten billion dollars passes at death — a lumpy number that swings hard from year to year and climbs as today’s biggest fortunes age. At the rate the largest estates actually pay, about 10 percent, the tax collects maybe six billion of it, and much of even that is steered into foundations before it counts. A conversion that took a quarter of that same wealth would capture more than twice as much. The estate tax isn’t failing at the margins; it’s barely touching the fortunes it exists to reach. It’s close to voluntary, because an entire industry exists to route around it. A fortune gets frozen into a grantor trust so its growth passes to the heirs untaxed; it gets parked in a dynasty trust that shelters it for generations; it gets discounted thirty percent or more by wrapping it in a family partnership and claiming the pieces are worth less than the whole; and whatever remains gets the “step-up in basis” at death, which erases a lifetime of capital gains in a single stroke. Something like $13 trillion — a quarter of the top 1%’s wealth — already sits inside trusts built for exactly this. Passing fortunes down untouched isn’t the loophole; it’s the system working as designed.

The Commonwealth conversion closes all of that, at least for the largest estates. It reaches whatever a person owns, wherever they’ve parked it — personal account, dynasty trust, family partnership, private foundation, all the same. There’s no valuation to argue down and no structure to hide behind: it simply takes a fixed percentage of the shares themselves. Own a hundred billion dollars of a company spread across a dozen trusts, and a quarter of those shares still convert to citizens’ hands when you die, no matter how the lawyers labeled them. That the reach includes private foundations matters most, and it’s part of the point. Today a billionaire can pour a fortune into a family foundation, keep effective control of it, pay out the legal five percent a year, and let the rest compound under the family name forever, untouched. The conversion reaches that too: once a fortune crosses the line, a slice of its shares goes to citizens whether it sits in a foundation or not. We are not letting the money slide into a charity to sit. And to be clear about the size of the ask — the conversion takes 25 percent and leaves 75. A founder’s heirs keep three-quarters of a fortune north of ten billion dollars, which is still, by any measure, a dynasty. It isn’t a bigger version of the estate tax that fails; it’s a different tool, aimed at the asset instead of the appraisal, and it can’t be gamed the same way.

The supplement, and why it’s paid in shares

Death is patient, though, and some of the people who can’t wait can’t wait that long either. So alongside the estate spine runs an annual levy — half a percent or one percent a year, the two figures I use throughout — on the wealth a person holds above ten billion dollars.

The most important words in that sentence are paid in shares. Not cash — shares. The billionaire doesn’t write a check; a corresponding slice of their stock transfers, as stock, into citizens’ accounts. This one choice solves three problems at once.

It can’t crater the market, because nothing is being sold. That’s the trap a wealth tax paid in cash falls into: to hand the Treasury a billion dollars, a founder has to sell a billion dollars of stock, and dumping that much onto the market collapses the price of the very thing you’re taxing. Transfer the shares intact and there’s no sale, no dump, no crash.

It needs no buyer. This is the part even the “just make them sell” crowd misses: a forced sale requires someone on the other side with the cash to buy — and there is no pool of buyers big enough to absorb trillions without the price falling through the floor. Transferring shares directly skips the buyer entirely. The stock simply changes owners.

And I should be straight about the objection a budget hawk will raise: the government collects no cash. A normal wealth tax feeds the Treasury. This doesn’t; the value goes straight from the billionaire to the citizen, with the government as nothing but the plumbing. For my purposes that’s a feature: the goal was never to fund the government, it was to make people owners, and routing the value through Washington’s budget is exactly how you’d lose it. But I won’t pretend the fiscal hawks will love it. They’ll see trillions in wealth changing hands and no revenue landing in the Treasury and call it a missed opportunity. My answer is that it was never the government’s opportunity to miss. It’s the citizen’s.

The Commonwealth Account

Where do the shares go? Into an account with the citizen’s own name on it — the same kind of account the newborn’s seed grows in, now holding a grown adult’s redistributed stake. Call it a Commonwealth Account.

A commonwealth is wealth held in common — but read the word again and it’s common wealth, wealth made common by being spread to everyone, one person at a time. That’s the whole distinction between this and every sovereign-wealth-fund proposal on the table. Sanders would pool the shares in one federal fund and let a commission vote them. A commonwealth isn’t a fund; it’s a country full of individual owners. The wealth is common because everyone has some — not because the government holds it on everyone’s behalf. Same instinct, opposite machine, and the name says so.

Two rules make the Commonwealth Account work. First, the shares carry a real pass-through vote — the citizen votes their own stake, the way I laid out earlier; a commonwealth of owners who don’t vote is just a subsidy with extra steps. Second: the shares have to be held.

If a forty-year-old receives a redistributed stake and can sell it Monday morning, most of it flows right back up the mountain — a payday-loan balance, a car repair, and the shares are gone, bought by someone who already had plenty, and the concentration you just fixed re-forms within a decade. So the stake comes with a holding requirement: you own it, you vote it, you collect what it earns, but you can’t sell it for a set stretch of years — and the younger you are, the longer that lock, because you have the most time for it to compound. A clean version: the shares lock for half the years between your age and sixty. A thirty-year-old holds fifteen years, a forty-year-old ten, a fifty-year-old five; a twenty-year-old holds twenty, which is a long time, but a twenty-year-old can afford it. Past retirement age there’s no lock at all, and hardship exceptions cover genuine emergencies. It isn’t paternalism for its own sake. It’s the difference between handing someone an asset and handing someone a windfall that evaporates. The floor has to stick, or it isn’t a floor.

To see how that plays out, picture the whole living cohort seeded in the same launch year — say 2027. Because the lock length is set by age but everyone’s clock starts at once, the oldest come free first and the youngest last:

Age at grantLockupUnlocks at ageUnlock year
505 years552032
457 years522034
4010 years502037
3513 years482040
3015 years452042
2517 years422044
2020 years402047

That stagger is the point, not an accident. If every lock expired in the same year, you’d get a wall of people cashing out at once — selling shares by the millions, knocking down the price of the very thing they hold. Spreading the unlocks across fifteen years means no single-year flood, the same instinct as taking the wealth in shares instead of cash. And it’s gentler still than the table looks, because the real stake doesn’t arrive in one lump — it accrues year after year, as the levy runs and fortunes convert at death, and each year’s shares carry their own lock. The unlocks become a steady trickle rather than any cliff at all.

What it adds up to

Before the numbers, look at who owns what today — it explains why the pool we’re redistributing from is the size it is.

The bottom half of the country owns about one percent of the stock market; the top ten percent own about 87 percent. But “the top ten percent” is not a thousand billionaires. It’s roughly twenty-five million people, everyone from about $1.5 million up to Elon Musk. Pull that group apart and the shape surprises people:

TierRoughly how manyShare of the marketAverage stake
Billionaires (over $1B)~950~10% (~$8T)~$8.4B
Centimillionaires ($100M–$1B)~10,000~4–5% (~$3–4T)~$350M
The merely-rich ($1.5M–$100M)~25 million~72% (~$57T)~$2.3M
Middle 40% (50th–90th percentile)~100 million~12% (~$9T)~$90k
Bottom 50%~125 million~1% (~$0.8T)~$6,400

The billionaires everyone pictures are only about a tenth of the market. The centimillionaires below them add a few more points. The great mass of concentrated stock — nearly three-quarters of the whole market — is held by the merely rich: the twenty-five million people worth between $1.5 million and $100 million. Successful professionals, business owners, executives, retirees with large accounts. Not famous, not billionaires, just comfortable and numerous. Spelled out per head, the gap is the whole subject of this chapter: the bottom half owns about $6,400 of the market each, the merely-rich about $2.3 million, the billionaires about $8 billion. A stake so small it rounds toward nothing — and making it real is what the rest of this chapter is about.

That single fact sets the ceiling on everything below. You cannot make every American rich by taxing billionaires, because there aren’t enough of them: their entire $8 trillion, seized to the last dollar and split across 250 million people, comes to about $32,000 each — once. The real mass of wealth sits in that $1.5-million-to-$100-million band, and reaching it means taxing dentists and family firms — a different and far uglier fight. So this proposal stays at the very top on purpose. It draws its line at ten billion dollars, takes a slice, and accepts that the slice is modest. The engine of the shareholder society was never redistribution — it’s the seed, compounding over a lifetime. Redistribution is only the bridge for the people who can’t wait for that.

Where you draw the line is the biggest dial on the numbers, precisely because of that shape:

  • Above $10 billion — the proposal — is a pool of about $4 trillion.
  • Above $1 billion, all billionaires, is about $7 trillion.
  • Above $100 million, adding the centimillionaire band, is about $11 trillion — enough to roughly triple every figure in the tables below.

Go lower than $100 million and the money finally gets large, but you’re taxing the merely-rich, and the politics turn brutal. The proposal keeps the line high and the ask small, by choice.

Two things to pin down first — who the money goes to, and where it comes from — and then the arithmetic in the open, before any table.

Who gets it. It goes broadly: to everyone outside the wealthiest tenth, call it 250 million adults. (The top 10% already own about 90% of all stock; handing them more misses the point.) The exact line is worth debating; I lean broad. Concentrate it on just the bottom half instead and every figure below roughly doubles.

Where it comes from, and how much. Two separate streams.

The first is death. Roughly $60 billion of wealth above ten billion dollars passes at death in a typical year — and that figure deserves some honesty. It’s lumpy: most years are quieter, but the year a Buffett or a Gates dies, a single estate can swamp the average. It’s rising, as today’s mega-fortunes age. And it’s probably conservative, because much of this wealth is routed to private foundations rather than heirs and the usual transfer figures miss it — but the conversion takes its slice wherever the wealth lands, foundations included, so if anything the real base is larger. Take a quarter of $60 billion, about $15 billion, split among 250 million people, and it comes to only about $60 a person.

The second is a yearly levy. The wealth sitting above ten billion dollars is about $4 trillion. A half-percent levy on it is $20 billion a year — about $80 a person.

Together, roughly $35 billion a year, or about $140 a person: $60 from death, $80 from the levy. Take the levy to its second tier, one percent, and it rises to about $220 a person.

That sounds tiny, and per year it is — deliberately so. Paid in every year and grown at seven percent, $140 a year becomes about $28,000 over a forty-year working life; $220 becomes about $44,000. I won’t dress these up: they stay small. This is the part of the plan that shows the limit of seizing wealth. It goes to the people who came too early for the seed — the adults alive today — and for them a modest bridge is the whole of it. The seed builds the real wealth, but only for the generations young enough to catch it. Every figure in the tables below is just this calculation, run for each starting age. (It all rests on estimates — about $4 trillion above the line, roughly sixty billion passing at death each year (lumpy, and likely conservative), 7% growth — so read the numbers as magnitudes, not precise totals.)

The first stream is the annual levy: a half-percent or one-percent tax each year on the wealth a person holds above ten billion dollars, collected in shares, spread across everyone, and left to grow at seven percent. Here is what it builds in an account by age sixty, on its own:

Age nowLevy 0.5%Levy 1%
20$16,000$32,000
25$11,100$22,100
30$7,600$15,100
35$5,100$10,100
40$3,300$6,600
45$2,000$4,000
50$1,100$2,200

The second stream is the estate conversion: a one-time quarter taken from a fortune above ten billion dollars when its owner dies, drawn from the roughly $60 billion that passes at death each year. Spread and grown the same way, here is what it builds on its own:

Age nowEstate at 25%
20$12,000
25$8,300
30$5,700
35$3,800
40$2,500
45$1,500
50$830

And here are the two streams added together — the whole of what the account holds by sixty, at the base rates and at the second tier:

Age nowBase (0.5% levy + 25% estate)Second tier (1% levy + 25% estate)
20$28,000$44,000
25$19,400$30,400
30$13,200$20,800
35$8,900$13,900
40$5,700$9,000
45$3,500$5,500
50$1,900$3,000

A real floor where there was none — not a fortune, and smallest for those who start middle-aged, but real.

The recipient pool and the threshold are the two dials, both covered above. Drop the line from ten billion to one billion and the base roughly doubles, so these figures would too — a twenty-year-old around $49,000 at the base rate, $78,000 at the second tier — but that reaches down into the smaller billionaires — the $1-to-$10-billion fortunes, still the rich, not the merely-rich — and it isn’t the proposal. Keeping the line at ten billion keeps the ask small and the numbers honest. Which is the real lesson of this whole section: even aimed squarely at the top and left to compound for a lifetime, seizing wealth builds only a modest floor. The fortune-building is the seed’s job. This is the bridge — and a bridge is all it was ever going to be.

What it does and doesn’t do

Newborns get the seed. Future giants get caught by the scale-threshold. And everyone already alive gets a Commonwealth Account — filled over the coming decades by redistribution at death, topped up by the modest annual supplement, and seeded further by handing citizens the stakes the government already holds in companies like Intel rather than keeping them in Washington. Several streams, one account, every citizen an owner.

I won’t oversell it. The forty-year-old will not wake up next year on the newborn’s million-dollar trajectory; they don’t have the runway, and no mechanism can manufacture time. What they get is a real stake that grows for twenty or twenty-five years instead of sixty — smaller, but real, and theirs, and voted by them. And the closer you are to retirement, the more the estate stream and the shorter holding requirement are built to reach you, because you have the least time to wait. It’s a floor that arrives late for the people who are already late, and on schedule for everyone behind them. That isn’t a perfect answer. It’s the honest one, and it beats telling half the country the good idea is for their grandchildren.

The crude approach — seize the fortunes, cut everyone a check — sets off the capital flight and collapse the last chapter described, and still doesn’t add up. This is the other way. It redistributes the growth: at death, in shares, into accounts people own, vote, and can’t quickly cash out — and it leaves everyone, top to bottom, richer than they started. That’s the Commonwealth: how a country split into owners and everyone else slowly becomes a country of owners.

Chapter 4 — Why Not Just Tax the Rich?

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The obvious answer, taken seriously

I’ve shown you what I actually want to build — a real ownership stake for every citizen, seeded young and compounded for a lifetime. And I can hear the objection already, because it’s the one that surfaces the instant money is on the table: why go to all that trouble? The top already owns almost everything — so why not just tax the rich and hand it out? I promised back in Chapter 1 that I’d take this reflex head-on. Here it is, stated as strongly as I can make it, because I don’t want to knock down a strawman.

The top 1% own about half of all stocks. The top 10% own nearly 90%. You’ve seen those numbers, and the conclusion writes itself: the money is sitting right there, in a small number of very large piles, so tax it — raise the top rate, add a wealth tax, use the proceeds to lift everyone else. It’s the first thing almost everyone reaches for, across the whole political spectrum, and it has the great virtue of sounding obvious. If a few people have too much, take some of it back.

Here is the snapshot underneath those two numbers — the whole stock market, sliced by how much people own:

TierRoughly how manyShare of the marketAverage stake
Billionaires (over $1B)~950~10% (~$8T)~$8.4B
Centimillionaires ($100M–$1B)~10,000~4–5% (~$3–4T)~$350M
The merely-rich ($1.5M–$100M)~25 million~72% (~$57T)~$2.3M
Middle 40% (50th–90th percentile)~100 million~12% (~$9T)~$90k
Bottom 50%~125 million~1% (~$0.8T)~$6,400

Look at where the weight actually sits. The billionaires everyone pictures own only about a tenth of it. The great bulk — nearly three-quarters — belongs to the twenty-five million merely-rich: successful professionals, business owners, executives, retirees with full accounts. Not a few hundred villains in a penthouse, but a broad, numerous, comfortable class. Hold onto that, because it is going to matter twice before this chapter is done.

I don’t think it works. Not because it’s immoral — we can argue that separately — but because it fails on its own terms, twice over, for two completely different reasons. First, the tax you’d raise doesn’t actually reach the wealth you’re aiming at. Second, even if it did, there isn’t enough of it to do the job. Take those in order.

Reason one: the money you’re taxing isn’t the money you’re mad about

Start with a distinction the whole debate runs on and almost nobody says out loud: income and wealth are different things, and the income tax only touches one of them.

Income is a flow — a paycheck, a salary, money that arrives and gets taxed on the way in. Wealth is a stock — assets you already hold, sitting there, appreciating. The person you’re actually angry about, the founder worth tens of billions, has almost no income in the tax sense. He holds appreciated stock. He can take a $1 salary, borrow against his shares when he needs cash, and never trigger a taxable event at all. The income tax, however high you crank it, sails right past him — because he isn’t earning income. He’s holding wealth.

So when someone says “raise the top income-tax rate on the rich,” the honest question is: which rich? The rate reaches the surgeon making $600,000 and the mid-tier executive making a few million in salary. It barely grazes the billionaire, whose money isn’t structured as income in the first place. You’re aiming a tool built for flows at a mountain of stock.

“But we taxed them at 91% once”

Here’s where someone always brings up the golden age. We used to have a 91% top rate and the country did fine — the rich just paid their share. It’s the strongest-sounding version of the objection, so it’s worth getting right, because the facts cut the other way.

First, a small correction that matters, because slipping on it gets you dismissed: the 91% rate wasn’t the 1970s. It ran from 1951 to 1963, peaking at 92% in ’52 and ’53. Kennedy and Johnson cut it in 1964, and the seventies were actually a 70% decade. “91% in the seventies” is off by a decade and twenty-one points.

More important: almost nobody paid it. Three reasons.

The bracket barely applied. The 91% rate only hit income above $200,000 — roughly $2 million in today’s money. In a country of 150 million people, estimates put the number of households that actually reached it at fewer than ten thousand.

The law capped itself. From 1952 to 1962 a provision limited your total effective rate to 87%, no matter how the brackets stacked. The 91% was never really the ceiling.

And the effective rate was far below the headline. The best data here — Piketty, Saez, and Zucman — finds that across the 1950s the top 1% paid about 42% of their income in all taxes combined: federal, state, local, everything. By 2014 that same group paid about 36%. The “golden age of soaking the rich” moved the actual needle by something like five points versus today.

Why the gap between 91% and 42%? Because the rich did then exactly what they do now — they moved their money into whatever the code taxed least. In the 1950s that meant converting salary into capital gains. Actors and directors were the pioneers; the LA Times called it “the golden age of tax avoidance.” Cecil B. DeMille set up a personal corporation that “sold” his services, paid the lower corporate rate, and drew a modest salary on top. The mechanism has a hundred names across the decades — loan-out corporations, collapsible corporations, stock options, and finally just never selling — but it’s always the same move. Money flows to the lowest rate. Raise the rate on one channel and it finds another. The 91% didn’t soak the rich. It taught them to swim.

The cleanest proof: what happened to CEO pay

If you want to watch this happen in slow motion, with a paper trail, look at executive pay — because we ran the experiment on purpose and it backfired in the most instructive way possible.

In 1993, Congress tried to rein in CEO pay by capping the corporate tax deduction for executive salary at $1 million. The intent was obvious: make it expensive to pay a boss more than a million in salary, and salaries will come down. Instead, pay didn’t shrink — it changed species. Boards shifted compensation out of salary, which was now capped, and into stock and options, which weren’t. Look at any big public company today and you see the fingerprint. Ford’s CEO, GM’s CEO: base salaries around $2 million, and then twenty-plus million more in equity on top. The salary is a rounding error on the package.

Meta is the purest illustration. Mark Zuckerberg takes a $1 salary and no stock grants at all — he doesn’t need them; he already owns the company. His reported “compensation” is essentially the cost of his security detail and his plane. His real wealth is founder’s stock he simply holds and never sells. He is the billionaire from two sections ago, wearing the CEO costume: the income tax has nothing to grab.

(While we’re here — the “CEO-to-worker pay ratio” quoted in every article is three different numbers wearing one name. The per-company SEC figure divides the CEO by the company’s global median worker, so a firm with big overseas factories posts a monstrous ratio for reasons that have nothing to do with the boss — Mattel’s 2,152-to-1 is really a map of where its factory workers live. The famous “20-to-1 in 1965, 281-to-1 today” trend measures something else again, and the British version divides by the national median. Three rulers, three numbers, one debate that mostly doesn’t notice. A bad thermometer for a real fever.)

The real point is the one this whole chapter is building. CEO pay went from salary — income, taxed heavily and now — to equity — a claim on appreciation, taxed lightly and later. We built a rule specifically to shrink it, and instead we taught it to grow in the one form the income tax can’t follow. The organization man of 1958 was cheap because the code left him no reason to be expensive. Today’s executive is expensive because the code handed him a better vehicle. Same physics. Different decade.

What actually restrains the rich — and it isn’t the tax code

Here’s the part I have to be honest about, because it cuts slightly against my own argument, and I’d rather raise it than have you catch me hiding it.

Plenty of rich countries pay their executives a fraction of what America does — a third to a half in Europe, about a fifth in Japan. So something restrains pay elsewhere. And the tell is that it isn’t the tax code. American base salaries are actually lower than Europe’s; the entire American premium is equity. And the high-tax countries — France, Denmark — don’t have modest CEO pay because of their taxes. They have it because of governance and culture. Germany puts workers on the board and lets them vote on pay. France and Brazil make the shareholder vote binding. India caps board pay by law. Japan shames it through disclosure. Denmark pegs the boss’s raise to the workers’. None of that is a tax.

So here’s the honest shape of it. Tax explains the American trajectory — the 1993 cap, the flight into equity, the whole slow migration this chapter traced. But governance and norms explain the cross-country levels. Two things are true at once, and I need you to hold both: taxing income can’t reach modern wealth — that’s the spine of my argument, and the equity migration proves it — but the tools that do restrain concentration are ones America mostly doesn’t use, and they’re structural, not confiscatory. Hold that second thought. It comes back when we get to the vote, because it turns out the fix was never to take the shares. It was to change who holds and votes them.

Reason two: even if you could reach it, there isn’t enough

Set all of that aside for a second. Suppose you could tax wealth directly — reach the founder’s stock, the appreciated assets, the whole pile. Grant yourself the tool the income tax doesn’t give you. It still doesn’t work, because the pile isn’t big enough to do what people imagine.

The figures here are from 2025 and they’ll drift — but the magnitude is the point, and the magnitude is what settles it.

There are around 935 billionaires in America, holding something like $8 trillion between them. That sounds like an ocean until you set it beside the thing people want it to pay for. The federal government spends about $7 trillion a year and runs a deficit — the annual gap between spending and revenue — of roughly $1.85 trillion. So the entire combined wealth of every American billionaire, seized in full, covers about one year of the deficit. Not the debt. The deficit. And the next year the deficit is back, and the billionaires are gone.

Run it as a recurring tax instead of a one-time seizure and it gets worse. To cover just the deficit — not to fund anything new, only to close the annual gap — you’d have to take about 23% of all billionaire wealth every year, forever. That’s not a tax; it’s a liquidation. And it can’t physically happen: you can’t sell a quarter of the country’s concentrated equity every year without collapsing the price of the thing you’re selling, and the moment you try, the capital moves. Norway raised its wealth tax and watched a wave of its wealthiest residents decamp to Switzerland, taking their tax base with them — the same capital flight that helped push France to scrap its wealth tax altogether.

And notice how far this is from what the serious proposals even ask. The academic wealth-tax plans — Piketty around 5 to 10%, Saez and Zucman around 10% — are a fraction of the 23% the deficit math alone demands. The most ambitious real proposals on the table don’t come close to closing the gap, and they’re already well beyond what’s politically or practically achievable.

There are really two different things people mean by “tax the billionaires,” and neither works. If the goal is revenue — money to fund things — the pile is too small and too illiquid: a year of deficit, then gone. If the goal is leveling — closing the gap itself — I showed you in Chapter 1 that the bill for putting every adult on a decent footing runs to $63–94 trillion, bigger than the entire stock market. You cannot get there by moving around the $8 trillion at the top. Revenue or leveling, the number at the top is a distraction from the number that actually decides it.

So where does that leave us

Put the chapter together and the reflex fails from every direction at once. Raise the income tax and it misses the wealth, which isn’t income. Reach back to the 91% golden age and find that no one paid it — the money just changed vehicles. Point to the countries that actually restrain concentration and find they do it through governance, not seizure. Try to confiscate the pile directly and find it’s a single year of deficit that craters and flees the moment you grab for it.

None of this means the concentration is fine. It means the tool everyone reaches for is the wrong one — aimed at a flow when the problem is a stock, sized for an ocean when the pile is a pond. The honest conclusion isn’t “leave it alone.” It’s that you don’t fix a shortage of ownership at the bottom by seizing ownership at the top. There isn’t enough there, it won’t stay put, and you’d wreck the engine grabbing for it.

Which turns the whole question around. If you can’t get people a stake by taking one, the only move left is to build one. That’s the rest of the book — and it starts with the lever that does the thing the tax code can’t: it puts real, appreciating, wealth-type ownership into ordinary hands, instead of chasing it around the code after the fact.