Why a Wealth Tax Would Be Terrible for American Taxpayers

An upcoming Supreme Court case about unrealized gains could decide the fate of a potential federal wealth tax. In the meantime, let’s consider the implications.

A stack of hundred-dollar bills.
(Image credit: Getty Images)

Now that the U.S. Supreme Court has agreed to take up a lower court decision on taxation (Moore v United States) that could open or slam the door on a federal wealth tax, it’s worth a deep dive into just how terrible a wealth tax would be for American taxpayers.

First, a wealth tax, unlike every other form of individual federal tax, would be levied based on what a family is worth rather than the amount of income they received in a given year. Sen. Elizabeth Warren (D-Mass.) and Rep. Pramila Jayapal (D-Wash.) introduced a bill in 2021 that would have created a graduated 2% to 3% annual wealth tax on households worth more than $50 million.

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Bruce Willey, JD, CPA
Founder, American Tax and Business Planning

Bruce Willey has been working with small to midsize businesses across the country for more than a decade, helping them navigate business and tax law in a variety of situations. His services include assisting with business start-ups, operations, growth, asset protection, exit planning and estate planning.