Former Citibank trader and inequality campaigner Gary Stevenson believes governments must tax accumulated wealth rather than place an ever-greater burden on earnings. His argument is gaining attention in Britain—but would anything resembling a wealth tax be economically, politically or constitutionally possible in the United States?
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Gary Stevenson is not the conventional face of a campaign to tax the wealthy.
A former Citibank interest-rate trader, Stevenson made his money inside the financial system he now argues is driving an unsustainable concentration of wealth. He has since become an author, economic commentator and prominent British advocate of what he calls a simple principle: tax wealth, not work.
In a recent episode of his Garys Economics podcast, titled What would an HONEST debate about a wealth tax look like?, Stevenson argues that most public discussions of the subject begin in the wrong place.
Before debating tax rates, thresholds or enforcement, he says, we should establish some more fundamental facts. What is wealth? Is ownership becoming more concentrated? What happens to an economy when a small group continuously accumulates assets from everybody else? And, only after addressing those questions, is some form of wealth taxation an appropriate response?
Stevenson’s argument is unapologetically political. But the questions he raises are not confined to British politics.
The United States has greater private wealth, deeper capital markets and more billionaires than any other major economy. It also faces rising federal debt, immense demographic commitments and a tax system in which substantial gains in asset values can remain untaxed for many years.
So could an annual tax on extreme wealth ever work in America?
The answer depends on what we mean by “work.”
The case Stevenson is making
Stevenson’s central argument is about flows of money and ownership rather than simply the gap between rich and poor.
When governments spend more than they collect, money does not disappear. It enters the private economy. But if lower- and middle-income households must spend most of their earnings on housing, food, energy and other essentials, while wealthy households can save and invest a much greater proportion of theirs, ownership gradually accumulates at the top.
The wealthy then use those savings to acquire more financial assets, businesses, land and housing. Asset prices rise, benefiting existing owners and making ownership progressively harder for people who do not already possess capital.
On Stevenson’s account, this is not merely a moral objection to some people being much richer than others. It is a structural economic problem.
As wealth becomes increasingly concentrated, younger households struggle to acquire homes and productive assets. Families become more dependent on inherited wealth. Governments place greater taxes on employment and consumption because accumulated fortunes are harder to reach. The economy begins to reward ownership more reliably than work.
Whether one accepts every part of that diagnosis or not, it identifies a real weakness in the conventional tax debate: the United States principally taxes income when it is received or gains when they are realized, not the continuing market value of a person’s accumulated assets.
For an employee, income generally becomes taxable as it is earned. For an entrepreneur whose company appreciates by billions of dollars, much of that increase may remain unrealized—and therefore outside the income-tax system—until shares are sold.
That distinction is at the heart of the American wealth-tax argument.
What would an American wealth tax actually tax?
An annual wealth tax is different from income tax, capital-gains tax and estate tax.
It would ordinarily apply to a taxpayer’s net assets: public stocks, private-company interests, real estate, cash, investment funds, valuable personal property and potentially trusts or offshore holdings, less qualifying debts.
The United States currently has no federal tax of this kind.
Recent proposals have generally been designed to apply only to extraordinarily wealthy households rather than affluent professionals or ordinary retirees. The political attraction is obvious: a government could theoretically raise substantial revenue from a very small number of taxpayers without increasing taxes on salaries or mass-market consumption.
Supporters also argue that an annual levy would reach wealth that the existing tax system may not capture effectively.
A billionaire can hold appreciating assets without selling them, borrow against those assets to fund expenditure, and defer capital-gains tax. Under existing rules, assets transferred at death may also receive a new tax basis, potentially eliminating income tax on appreciation that occurred during the former owner’s lifetime.
A wealth tax attempts to address the stock of wealth itself rather than waiting for a taxable transaction.
That is the theoretical case. Applying the theory is much more difficult.
The strongest argument in its favor
The most persuasive case for a wealth tax is not that billionaires possess “too much” money. That is a political judgment, not a tax-design principle.
The stronger argument is that the economic lives of extraordinarily wealthy people can fall increasingly outside a system constructed primarily around taxable income.
A founder whose ownership stake rises from $1 billion to $5 billion has experienced a dramatic increase in economic resources, even without selling shares. That individual can borrow against the holding, acquire other assets and exercise considerable economic power. Yet conventional income-tax data may show comparatively little taxable income.
An annual wealth tax would reduce the significance of whether gains had formally been realized. Proponents believe this would make the system more neutral between people who earn high salaries and those whose fortunes expand through appreciating assets.
There is also a revenue argument.
A 2025 analysis by the Urban-Brookings Tax Policy Center estimated that a broad annual tax of 1% on net wealth above $50 million for married couples—after accounting for behavioral responses, avoidance and evasion—could raise approximately $1.9 trillion over the 2025–2034 period.
Such projections are inevitably sensitive to assumptions. Nevertheless, they demonstrate why the idea remains politically compelling. Even after allowing for avoidance, a tax applied to a narrow population controlling enormous pools of wealth could potentially raise meaningful sums.
Supporters would add a broader economic claim: if wealth concentration is making it harder for new generations to acquire businesses, homes and financial assets, taxing a small portion of the largest fortunes could help prevent the emergence of a largely inherited economic order.
In that sense, the argument is presented not as an attack on capitalism but as an attempt to preserve wider participation in it.
The first practical problem: what is everything worth?
Publicly traded securities are relatively easy to value. A tax authority can identify the market price of a listed stock on a specified date.
The difficulty begins with everything that has no daily market price.
What is a privately held advisory business worth this year? What about a technology company before a funding round, a partnership interest with transfer restrictions, a family-owned manufacturer, an art collection, a commercial property development or intellectual property that may—or may not—eventually prove valuable?
Advisors who have worked on estate planning, succession or private-company transactions know that valuation is rarely an exact science. Reasonable experts can reach materially different conclusions using different assumptions, discounts and methodologies.
A yearly wealth tax would require those judgments to be made repeatedly.
Stevenson responds that governments and financial institutions already value wealthy people’s assets. Estates must be valued at death. Banks assess collateral before lending. Private businesses receive valuations during investments, transactions and divorces. Insurance companies place values on property and collections.
That is true, but it does not eliminate the problem.
A valuation prepared for lending may be cautious. A founder seeking investment may promote a higher figure. A tax valuation creates an incentive to reach the lowest defensible number, while the government has an opposing incentive. Converting occasional valuations into a consistent annual system would create substantial administrative expense and an inevitable industry of disputes, planning strategies and litigation.
The second problem: wealth is not the same as cash
Consider the founder of a private company valued at $200 million who owns 60% of the equity but receives a modest salary and dividend.
On paper, that person may have net wealth above $100 million. In practice, most of it may be illiquid, concentrated in a business that cannot easily be sold in small portions.
An annual wealth-tax bill could force the founder to borrow, sell part of the company or extract cash that might otherwise have been used to hire employees and invest in growth.
The problem is not insurmountable. A system could permit deferred payment, accept shares in certain circumstances, or apply special arrangements to illiquid businesses. But every concession creates complexity and an opportunity for avoidance. Exempting private businesses would encourage wealthy families to hold more assets through private structures. Taxing them fully could create genuine liquidity pressure.
The tension is difficult to escape: a broad tax is harder to avoid but more disruptive; a tax full of exemptions is easier to administer politically but may collect much less than expected.
Would entrepreneurs stop building businesses?
Opponents often argue that taxing wealth punishes precisely the people who create companies, jobs and innovation.
There is some force to this argument, particularly when the tax is levied on uncertain private-company valuations rather than realized cash. A recurring charge compounds over time and could affect where founders establish businesses, where investors reside and how ownership is structured.
But the claim can also be overstated.
A carefully designed tax affecting only wealth above, for example, $50 million or $100 million would not remove the financial incentive to build a successful company. The choice facing an entrepreneur would not normally be between retaining all of an enormous fortune and receiving nothing. It would be between retaining most of it and paying a recurring percentage above a very high threshold.
The more credible concern is not that innovation would cease, but that mobile founders and investors would change their behavior. They might relocate, alter ownership arrangements, defer investment, increase borrowing or commit greater resources to minimizing reported wealth.
Tax policy must therefore be judged not only by the rate written into legislation, but by the behavior that rate creates.
Would the wealthy simply leave?
This is perhaps the most powerful popular objection—and one Stevenson addresses directly.
The United States has an advantage that many European nations do not. U.S. citizens are generally taxed on worldwide income even when living overseas. Renouncing citizenship is possible, but it is a consequential step and can trigger an expatriation tax.
That makes an American wealth tax potentially harder to escape through relocation than a tax imposed by a smaller country using residence alone.
Yet mobility would still matter. Individuals could change residency before a law took effect, restructure asset ownership, transfer wealth, employ trusts, challenge valuations or move new business activity elsewhere. Foreign founders and investors deciding where to establish themselves could also view the United States differently.
The question is therefore not whether avoidance would occur. It would.
The relevant questions are how much, at what economic cost and whether the tax could still collect sufficient revenue to justify those effects.
Europe offers both a warning and a lesson
The international record is uncomfortable for wealth-tax advocates.
The number of OECD countries imposing broad individual net wealth taxes fell significantly during the 1990s and 2000s. Austria, Denmark, Finland, Germany, Luxembourg, the Netherlands and Sweden all abandoned versions of the tax. France subsequently replaced its broader levy with one focused on real estate.
The reasons included capital mobility, avoidance, narrow tax bases, administrative burden and revenues that were often disappointing compared with the complexity involved.
That history cannot simply be dismissed as propaganda from wealthy taxpayers. It is serious evidence that badly designed wealth taxes struggle.
However, it does not prove that every version must fail.
Switzerland has long operated wealth taxes at the cantonal level. Norway and Spain also maintain versions of the policy. Their systems differ significantly, and none can be transplanted wholesale into the United States. But their continued existence shows that recurrent taxation of wealth is administratively possible.
The lesson from Europe may not be that wealth taxes never work. It may be that high rates, low thresholds, extensive exemptions and weak international enforcement are a particularly unsuccessful combination.
Then comes the Constitution
Even if Congress could agree on the economics, a federal wealth tax would face a distinctly American challenge.
The Constitution requires “direct taxes” to be apportioned among the states according to population unless another constitutional provision applies. The Sixteenth Amendment expressly permits federal taxes on income without apportionment, but it does not refer to wealth.
Supporters argue that a tax on a person’s net wealth could be structured as an excise or another form of permissible federal tax. Opponents contend that it would be a direct tax on property and therefore unconstitutional unless apportioned—an approach that would make a national wealth tax practically unworkable.
There is no modern Supreme Court ruling conclusively resolving the constitutionality of the kind of broad federal wealth tax now being proposed.
Any legislation would therefore generate immediate litigation, and its future could ultimately depend on the Court’s interpretation.
This separates the American debate from much of the international experience. The first battle might not be about whether the tax raises money, but whether the federal government has the constitutional authority to impose it at all.
Is there a more practical alternative?
Rejecting an annual wealth tax does not resolve the underlying question of how extremely large fortunes should be taxed.
The United States could instead:
- tax capital gains at death rather than allowing a step-up in basis;
- introduce mark-to-market taxation for publicly traded assets held by ultra-wealthy taxpayers;
- strengthen estate and gift taxation;
- limit the use of trusts and valuation discounts;
- increase enforcement of offshore reporting;
- tax certain forms of borrowing against appreciated assets;
- reform carried interest and other preferential treatments; or
- place greater emphasis on land and property taxes.
These alternatives have their own problems, but some may be easier to value, enforce and defend constitutionally than a comprehensive annual tax on net wealth.
This may ultimately be where Stevenson’s slogan is more powerful than any individual policy proposal.
“Tax wealth, not work” does not necessarily require one universal wealth tax. It could instead describe a broader rebalancing of the system away from wages and toward capital gains, inheritances, property and the mechanisms through which very wealthy households finance their lives.
What does this mean for financial advisors?
For advisors, the important question is not simply: Do you support a wealth tax?
It is: What would your clients do if one became a serious possibility?
The answer would reach almost every part of sophisticated wealth planning.
Clients would need advice on business valuations, liquidity, concentrated equity positions, borrowing, gifting, charitable strategies, trust structures, domicile, estate planning and the timing of transactions.
Closely held business owners might reconsider succession plans. Public-company founders could diversify earlier. Families might accelerate gifts or charitable contributions. Advisors would need to work more closely with tax attorneys, valuation specialists and family-office professionals.
There would also be a behavioral challenge.
The announcement of a proposed tax can change decisions years before legislation passes. Clients may act on headlines, political probabilities or fear rather than settled law. Advisors would have to distinguish prudent preparation from expensive and irreversible overreaction.
Even without an annual wealth tax, the political pressure behind the idea could produce narrower reforms affecting capital gains, estates, trusts or unrealized appreciation.
The policy may fail while the planning consequences remain.
So, would it work?
A narrowly targeted American wealth tax could probably collect substantial revenue. The United States has unusually large concentrations of private wealth, sophisticated reporting infrastructure and citizenship-based taxation that makes simple relocation less effective than in many other countries.
But “could collect revenue” is not the same as “would work well.”
Valuing private assets every year would be costly and contentious. Illiquid founders could face genuine cash-flow problems. Wealthy households would restructure their affairs. Capital and talent could respond. A system riddled with exemptions would risk becoming ineffective, while one without them could become economically intrusive. Above everything would hang a potentially decisive constitutional challenge.
Gary Stevenson is right about one important thing: the debate should not be closed down through slogans and fear.
But intellectual honesty must operate in both directions.
It is not enough for opponents to declare that every wealthy person would leave or that entrepreneurship would collapse. Nor is it enough for supporters to calculate a percentage of billionaire wealth and assume the resulting sum would arrive effortlessly at the Treasury.
A serious debate must acknowledge both the weakness in a system that taxes work more reliably than vast unrealized gains and the formidable challenge of taxing wealth without distorting, relocating or misvaluing it.
The better question may therefore be broader than whether America needs a “wealth tax.”
It is whether a tax system designed around wages, realized income and occasional transfers remains adequate in an economy where the greatest fortunes are built and maintained through the continuing appreciation of assets.
That debate has already begun.
Advisors should not assume it will remain on the political margins.
About Gary Stevenson
Gary Stevenson is a British economic commentator, former Citibank interest-rate trader and author of The Trading Game. Through his Garys Economics platform, he campaigns against growing wealth inequality and advocates shifting more of the tax burden from employment and ordinary income toward accumulated wealth.
This article was inspired by Stevenson’s podcast episode, What would an HONEST debate about a wealth tax look like?. Modern American Advisor is not affiliated with Gary Stevenson or Garys Economics. https://open.spotify.com/episode/6Gw6AWAuCvEBRkxuGs69BR?si=9-YY57UPSdO8iN0W04Ay8Q&utm_source=copy-link&nd=1&dlsi=cdcb4a4983994544
The Great Debate
Modern American Advisor’s The Great Debate series provides a forum for challenging, consequential and sometimes controversial ideas affecting financial advice and the clients advisors serve. The views discussed do not necessarily represent the position of Modern American Advisor.
