Skip to main content

Sign up for our newsletter.

Quality journalism. Progressive values. Direct to your inbox.

The concentration of wealth in the U.S. will soon resemble the kind of dynasties common to European aristocracies in the seventeenth and eighteenth centuries. (Image: Inequality Media)

Why We Need a Wealth Tax

Not only would a wealth tax raise revenue and help bring the economy back into balance, but it would also protect our democracy by reducing the influence of the super-rich on our political system.

Robert Reich

The crisis of income inequality in America is well-known, but there is another economic crisis developing much faster and with worse consequences. I’m talking about inequality of wealth.

The wealth gap is now staggering. In the 1970s, the wealthiest tenth of Americans owned about a third of the nation’s total household wealth. Now, the wealthiest 10 percent owns about 75 percent of total household wealth. 

"America is now on the cusp of the largest intergenerational transfer of wealth in history."

America’s richest one-tenth of one percent now owns as much wealth as the bottom 90 percent.

Wealth isn’t like income.  Income is payment for work.  Wealth keeps growing automatically and exponentially because it’s parked in investments that generate even more wealth.

Wealth is also passed from generation to generation. An estimated 60% of the wealth in the United States is inherited. Many of today’s super-rich never did a day’s work in their lives.  The Walmart heirs alone have more wealth than the bottom 42 percent of Americans combined.

America is now on the cusp of the largest intergenerational transfer of wealth in history. As wealthy boomers die, an estimated $30 trillion will go to their children over the next three decades.

Over time, this wealth will continue to grow even further – without these folks lifting a finger. This concentration of wealth will soon resemble the kind of dynasties common to European aristocracies in the seventeenth and eighteenth centuries.

It’s exactly what our Founding Fathers sought to combat by creating a system of government and economy grounded in meritocracy.

Dynastic wealth puts economic power into the hands of a relatively small number of people who make decisions about where and how to invest most of the nation’s capital, as well as which nonprofit enterprises and charities deserve support, and what politicians merit their campaign contributions. 

That means their decisions have a disproportionately large effect on America’s future.

Dynastic wealth also magnifies race and gender disparities. Because of racism and sexism, women and people of color not only earn less. They have also saved less. Which is why the racial wealth gap and the gender wealth gap are huge and growing.

Today, government is financed almost entirely by income taxes and payroll taxes – totally ignoring the giant and growing wealth at the top.

So how do we address the crisis of wealth inequality?

A wealth tax, as proposed by Senator Elizabeth Warren, would begin to tackle all this by placing a 2 percent tax on to wealth in excess of 50 million dollars

According to estimates, this tax would generate 2.75 trillion dollars over the next decade, which could be used for health care, education, infrastructure, and everything else we need.

Not only would a wealth tax raise revenue and help bring the economy back into balance, but it would also protect our democracy by reducing the influence of the super-rich on our political system.

We must demand an economy that works for the many, not one that concentrates wealth in the hands of a few. A wealth tax is a necessary first step.


Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.
Robert Reich

Robert Reich

Robert Reich, is the Chancellor’s Professor of Public Policy at the University of California, Berkeley, and a senior fellow at the Blum Center for Developing Economies. He served as secretary of labor in the Clinton administration, for which Time magazine named him one of the 10 most effective cabinet secretaries of the twentieth century. His book include:  "Aftershock" (2011), "The Work of Nations" (1992), "Beyond Outrage" (2012) and, "Saving Capitalism" (2016). He is also a founding editor of The American Prospect magazine, former chairman of Common Cause, a member of the American Academy of Arts and Sciences, and co-creator of the award-winning documentary, "Inequality For All." Reich's newest book is "The Common Good" (2019). He's co-creator of the Netflix original documentary "Saving Capitalism," which is streaming now.

We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.

Amazon Employees Hold First-Ever Work Stoppage in Air Freight Division

"If Amazon can afford to pay its CEO $214 million last year it can afford to give their workers a $5-an-hour raise and a safe workplace," said Sen. Bernie Sanders.

Julia Conley ·


Lula Holds 12-Point Lead Over Bolsonaro as Brazil's Presidential Race Heats Up

The leftist champion's double-digit lead in the polls comes amid fears that the far-right incumbent's baseless accusations of fraud and threats to stay in office no matter the outcome could lead to violence.

Kenny Stancil ·


'We Will Vote This Dirty Deal Down,' Tlaib Says of Manchin's Oil-Friendly Side Agreement

"We sure as hell don't owe Joe Manchin anything now," said the Michigan progressive.

Jake Johnson ·


Dr. Oz Derided Over Ad Attacking Fetterman's Support for 'Free Healthcare'

"What's radical," responded a top aide to Sen. Bernie Sanders, "is 338,000 Americans dying during the pandemic because they could not afford for-profit healthcare."

Jake Johnson ·


Despite Housing Crisis, Mississippi May Return Up to Millions in Federal Rent Aid to DC

"For them to suggest people like me aren't working? It's a slap in the face," said one woman affected by the end of the pandemic assistance program. "It's very insulting and degrading."

Brett Wilkins ·

Common Dreams Logo