Rethinking Ultra-Wealthy Taxation

It is often a question of individuals who use public transportation why structures and facilities are so dilapidated. Particularly, they look at other developed countries or hear different stories about the up-to-date services provided by these countries, and then turn their attention to the lack of these structures in the services provided here at home. Infrastructure, like that used by public transportation, for instance, is heavily subsidized by federal tax dollars that fund state and county developments throughout the country. Transit systems like that of the New York City Metropolitan Transportation Authority are likewise dependent on government subsidies for their maintenance and development. But aspects of quality and allocation of resources do not only affect transportation. The same can be said for schools, waste management, and other government-sponsored programs that aid not only individuals from lower economic backgrounds but also the wealthy who use these services as well.

Much, if not all, of the funding that comes from the government is in the form of taxpayer dollars. This money is divided into different sectors and essentially runs the governmental and operational aspects of the country. Even so, there is a significant gap in taxation between the wealthy and the common American. Allocation and the greater wealth divide between the rich and poor only play a part in this relationship. Most significant are the factors contributing to the taxation systems and their collections.

Decreases in taxation, as well as tax breaks on income, are increasingly widening the wealth gap. In a time where infrastructure and public services are continually failing the people, taxing these individuals has become crucial. With recent developments within the governmental structure of the country as well as far-right policies on tax cuts, already existing problems are only going to worsen. Is there a way for billionaires to be incentivized to contribute a fair share to the greater community?

The United States has witnessed decades of rising wealth inequality. In the past few decades alone, not only have those in the top 1% of earners in the country significantly gained wealth, but the lowest earners in the country have had relatively stable incomes that are largely unchanged as a result of inflation. In the book The Triumph of Injustice: How the rich dodge taxes and how to make them pay, Emmanuel Saez and Gabriel Zucman argue that there has been relatively little change in the dismantling of the wealth inequality of the U.S.

“Since 1980, the top 1% and the bottom 90% have exchanged their slices of the total wealth pie: what the bottom 90% has lost, the top 1% has gained…To capital owners who have prospered, the tax system has given more; from workers whose wages have stagnated, it has taken more. In 2018, for the first time in the modern history of the United States, capital has been taxed less than labor” (Saez and Zucman 2020, 98).

Both Saez and Zucman imply that a regressive taxation system is an ineffective one. The authors make it clear that taxation has a purpose beyond collection. “It’s through collective spending on education, health, and other public goods,” they write, “that rich countries have become wealthy, not through the deification of a tiny minority of ultra-rich ” (Saez and Zucman 2020, 194).

While the United States lags infrastructurally, it also fails to hold the wealthy accountable for a fair share of taxes, unlike some of its European counterparts. Though taxation varies throughout the rest of the world, many developed countries have created systems of taxation that are more inclusive of the participation of wealthy individuals.

Norway offers a compelling example of how a country can tax wealth without undermining prosperity. The Scandinavian country imposes a 1.1% wealth tax on net assets exceeding a high threshold of 1,760,000 NOK (~$165,276 USD), targeting the concentration of capital among the richest individuals (PwC, Norway Individual - Other Taxes 2025). At the same time, the Norwegian government maintains significant ownership in profitable national industries like energy and telecommunications. These public stakes generate revenue that would otherwise be seen as corporate gains should it have been a privatized industry (Norway Ministry of Trade, Industry and Fisheries 2023, 12-13).

Likewise, while not imposing a wealth tax, Germany enforces a total corporate tax burden of approximately 15% through a combination of federal income tax, solidarity surcharges, and municipal trade taxes, and around ~30% for trade taxation depending on the region in the country. (PwC, Germany Corporate - Taxes on corporate income 2024).

These models exemplify taxation not as a punitive measure but as a mechanism for democratic accountability and public investment. As Saez and Zucman argue in The Triumph of Injustice, “There is no example of a successful model for retirement, education, and health care that is not heavily funded through taxes or mandatory contributions equivalent to taxes” (Saez and Zucman 2020, 180). Their framing reveals a moral dimension to taxation that is too often absent from U.S. debates: tax policy is not only about how much is collected but also about how resources are allocated for the betterment of society.

Saez and Zucman also emphasize that these models are not utopian. “What makes communities thrive is not any unfettered free-for-all; it is cooperation and collective action. Without taxes, there is no cooperation, no prosperity, no common destiny, there is not even a nation in need of a president” (Saez and Zucman 2020, xiii).

The problem isn’t that there is a lack of models; it’s that they have been largely ignored. Countries like Norway and Germany demonstrate that it’s possible to design tax systems that protect economic vitality while advancing equity. What the U.S. lacks isn’t innovation but the will to disrupt a status quo that rewards wealth hoarding and punishes labor. If the richest Americans continue to operate under a tax regime that treats capital as untouchable, reform becomes not just a matter of revenue but of justice.

The problem comes to a standstill, however, when dealing with billionaires. For one, the United States does not maintain a wealth or net worth taxation system, as stated by PwC, but it does have a tax on capital gains as well as a tax on inheritances (PwC, United States Individual - Other taxes 2025). This creates a phenomenon of double taxation that ultimately places a burden and conflict of interest on billionaires who want to conserve as much of their money as they can.

This is quite a significant problem considering there are many social needs to be met and already widening gaps in tax payments between individuals of distinct economic classes. Where the wealthy pay larger sums of money, the lower economic classes are burdened with a higher percentage of their incomes being classified as taxable. This is where our European counterparts provide important stepping stones for how to implement such systems of taxation.

Specifically, the Norwegian taxation infrastructure provides a good blueprint for individual incomes. In this system, the Norwegian wealth tax maintains a minimum taxable income of 1,760,000 NOK (~$165,276 USD), however, this is quite far from the income that billionaires make annually. This 1.1% tax on a billionaire like Elon Musk, who had an income total of about $204.2 billion in 2023, would amount to a very small amount of this fortune at around $2.25 billion in taxes (WageIndicator Foundation 2024).

More applicable to the U.S. would be Germany’s tax system on corporate entities. Subject to corporate taxation and trade taxation, corporations in Germany are highly regulated and maintained for the fairness of tax burdens. This system of corporate tax is not something that is readily seen here in the United States. Corporate taxation in the U.S. involves an intricate categorization of corporations governed by their general financial position as well as other factors. The complexity of such systems, though much more inclusive, is a cause for confusion and raises concerns over how categorization should be administered (PwC, United States Individual - Other taxes 2025).

Using these frameworks, the question is no longer what systems to use but rather how to implement them and whether they would even function as intended here in the U.S.

One of the most difficult hurdles to overcome such standstills would be by passing legislation through the Federal Government for such implementation. Unfortunately, most legislation that goes through Congress is dictated by lobbyists and interest groups. Of these groups, many are funded by the top earners and corporations seeking to mitigate their expenditures while generating the highest possible profit in their respective businesses. In the article, Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens, the authors Martin Gilens and Benjamin I. Page cite the influence of these entities on the political processes that occur in the legislation of the United States: “As to empirical evidence concerning interest groups…provide self-serving information to officials, draft legislation…Moreover, in harmony with theories of biased pluralism, the evidence indicates that most interest groups and lobbyists represent business firms or professionals” (Gilens and Page 2014, 567). Taking into consideration the current political and governmental circumstances of the legal system here in the United States, the prospect of wealth legislation is unlikely in the near future.

This is evidence enough that the U.S. modes of taxation are not significantly aiding in the improvement of much-needed infrastructure innovation. America’s potential remains vast, but its future hinges on its willingness to confront the fractures in its foundation.

Yet, recognizing the need for reform is only the first step. The broader question is how to actualize the policies and resources that will ensure public infrastructures in all major American cities that heavily rely on these public services are no longer neglected. There is already difficulty in the legislative aspect of such policies. The presence of large corporations as well as influential individuals through lobbyists creates an environment of political gridlock that is ingrained into the political culture of the modern day. However, the wealth taxation of billionaires is a potential revenue stream from which infrastructural advancements can occur. Like the Norwegian Wealth and Net Worth tax and the German Corporate and Trade tax, there is potential for such a system to exist and thrive, given the precedent from these two countries.

The debate hinges less on feasibility and more on collective will. Americans must decide whether public goods like safe, efficient transit systems outweigh the political and economic advantages that protect concentrated wealth. Other nations have shown that fairly calibrated taxes can underwrite essential services without crushing prosperity. If U.S. lawmakers and citizens choose to embrace that model, there is a path forward. If not, the cycle of decay and underinvestment may simply continue unchecked.

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