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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:
| Tier | Roughly how many | Share of the market | Average 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.
