Americans for Tax Fairness has ignited a renewed push for a tax on billionaires, emphasizing the staggering amount of untaxed, unrealized capital gains held by the ultra-rich. The advocacy group asserts that these gains, amounting to $8.5 trillion in 2022, represent the largest source of income for the wealthy and yet remain entirely untaxed under the current U.S. tax code.
The organization’s X thread highlights a concerning trend, revealing that billionaires and centimillionaires now possess 700% more in unrealized gains compared to 1989. Shockingly, over half of their wealth consists of these gains, with each centimillionaire holding an average of $132 million, dwarfing the median American household’s holdings by about 3,000 times.
To emphasize the inequality further, the group points out that the total unrealized capital gains of the super-rich equals the combined holdings of the bottom 84% of American households, approximately 110 million families. Furthermore, a significant portion of the unrealized gains held by billionaires is not tied to real estate, with less than 4% invested in property.
Critics of the proposal contend that unrealized gains should not be considered income, as they are neither spendable nor guaranteed until realized and taxed (unless margin loans are considered, but no one likes to highlight that). Some observers, such as @DoomerTapes, liken the idea to considering ungrown crops as food.
However, Americans for Tax Fairness remains steadfast in its pursuit, asserting that the current tax code perpetuates inequality, allowing billionaires to pay tax rates as low as 4.8%. They argue that Democratic lawmakers have introduced legislation that aims to rectify this disparity by taxing billionaires on their full income each year, potentially generating hundreds of billions of dollars in revenue.
In response to the ongoing debate, a group of progressive U.S. lawmakers introduced the OLIGARCH Act in July 2023. Led by Representatives Barbara Lee, Summer Lee, Rashida Tlaib, and Jamaal Bowman, the comprehensive plan aims to address wealth inequality by proposing a dynamic wealth tax with four brackets. Ranging from 2% to 8%, the tax would apply to various levels of wealth, ensuring that the ultra-rich contribute their fair share to bridge the widening wealth gap.
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