Though fortunes have softened somewhat thanks to a fallout in high-tech and software stocks this year, there are still 17 centibillionaires around the world, and 14 of them hail from the United States.
The reasons for rising inequality in the 2020s are diverse, but they begin with the pandemic, when the Federal Reserve rescued corporate stock portfolios by committing $4.5 trillion to bail out securities markets. The term “K-shaped economy” was inaugurated at that time and has only became more pronounced in the years since. Inflation affected average income earners to a much greater degree than the wealthy, whose discretionary income is much higher.
More recently, the stock frenzy around artificial intelligence has minted billionaires who are flush with on-paper wealth. After a fall in 2022 largely tied to inflation, the S&P 500 index increased by 23.8 percent in 2023, 23.9 percent in 2024, and 16 percent in 2025. While more than half of Americans own stock, the richest hold a disproportionate share of equities.
The lion’s share of this money is out of reach of traditional taxation. According to the Federal Reserve, nearly three-quarters of the wealth of the top 0.1 percent comes from equities, mutual funds, or business shares. Most stocks, bonds, and exchange-traded funds that are bought and held, and all assets held in retirement accounts, do not generate taxable capital gains. All the millionaire taxes that have proliferated across the country—from a Massachusetts levy in 2023 to a new tax in Washington state this month to a possible millionaire levy in New York—are taxes on earned income, not capital. And lawyers and accountants have devised countless avoidance strategies to retain individual wealth.
As a general matter, wealth does not get taxed outside of state-level property taxes. The Warren proposal is among several, including a 5 percent wealth tax solely on billionaires proposed by Sen. Bernie Sanders (I-VT) and Rep. Ro Khanna (D-CA) and a ballot initiative currently in the field in California that would impose a one-time wealth tax of 5 percent on billionaires, that have been put forward in recent years to deal with the erosion of a tax base that doesn’t include a large amount of capital income.
The doubling of estimated revenues from the Warren wealth tax adds a new dimension to the debate on how to redesign the tax code. Several Democrats have endorsed large middle-class tax cuts that detractors say hollow out the tax base amid other competing federal priorities. But the numbers do show that the bulk of the money available for taxation is currently shielded and growing larger by the day.
“The only silver lining to the fact that billionaires have doubled their wealth in the last 5 years—while working families are getting squeezed—is that the estimated revenue from my wealth tax proposal has also doubled,” said Sen. Warren in a statement to the Prospect. “That’s more homes we can build, more kids we can send to college without debt, more parents we can lower child care costs for, and more health care we can provide through Medicare—with money left over to better our country.”
One of the sponsors of a middle-class tax cut bill, Sen. Chris Van Hollen (D-MD), co-sponsored the Warren wealth tax proposal.
Billionaires are determined to keep their loot, of course. They have a full-fledged member (at least if you believe his numbers) in the White House, and 2 percent of all billionaires in the country are members of the Trump administration. One in five dollars spent in the 2024 election came from a billionaire, and that number will likely be similar, if not higher, this election cycle. A $500 million fund just to influence politics in California has been raised by Silicon Valley elites.
So billionaire wealth is escalating in campaigns, and subsequently billionaire wealth is escalating. That’s what’s known as return on investment.
David Dayen is the executive editor of The American Prospect. He is the author of Monopolized: Life in the Age of Corporate Power and Chain of Title: How Three Ordinary Americans Uncovered Wall Street’s Great Foreclosure Fraud. He co-hosts the podcast Organized Money with Matt Stoller. He can be reached on Signal at ddayen.90. More by David Dayen
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