Wealth Taxes

Tax policy expert David Gamage has specifically proposed a "low-rate business wealth tax" for the AI era, arguing that using both income and wealth taxes creates a system harder to evade: "Income taxes face accounting manipulation; wealth taxes face asset valuation challenges. Using both makes the system harder to avoid." He analogizes this dual structure to asset management fees, where the wealth tax acts as a "management fee" for providing legal infrastructure protecting accumulated capital, while the income tax serves as a “performance fee” for profits generated in state markets.

Huynh, Mittal and Frank evaluate wealth taxes as a viable response to AI-driven capital concentration, finding them particularly relevant for inequality-driven future scenarios but noting challenges with asset valuation and capital flight risks compared to more resilient options like Land Value Taxes. They conclude that the feasibility of wealth taxes hinges on valuation infrastructure and enforcement capacity.

Saez and Zucman propose an annual “wealth tax on corporations’ stock”: a 0.2% levy on the market value of publicly listed companies headquartered in G20 countries, raising roughly $180B/year on a $90T G20 market cap and designed to be progressive because equity ownership is highly concentrated. They emphasize administrability by having national securities commissions levy the tax (using existing securities-market regulatory infrastructure) and allowing in-kind payment via issuance of new shares, avoiding liquidity constraints while diluting shareholders by the tax rate.