"Wealth inequality has become a danger to our society, and we need to address that," [United Airlines CEO Scott Kirby] said. "We should have a national wealth tax -- it won't work by state because people will just move. And I think we should have inheritance taxes that get close to 100% at some level. I would pay them." read more
#12 | POSTED BY EBERLY AT 2026-10-21 10:07 AM | REPLY
You are correct, it is a very complicated issue and constitutional issue. Under the U.S. Constitution, a federal wealth tax would likely be considered a direct tax. Unlike indirect taxes (such as duties, imposts, and excises) which must be geographically uniform, direct taxes must be apportioned among the states based on population, meaning each state's total tax contribution must match its share of the U.S. population. The federal income tax is a direct tax, but the 16th Amendment specifically carves out income taxes from indirect tax handcuff. You also have the "realization" issue in that generally there needs to be a realization event for a tax to arise - some accretion to wealth.
One popular alternative is to turn off the "buy, borrow, die" spigot. One planning technique used by the super wealthy is to borrow against appreciated assets and use those proceeds to generate gains at a rate higher than any interest paid. Borrowing is not a realization event - meaning if I own real estate with a fair market value of $10mil and a tax basis of $0 and I sold that property, I would have $10mil of taxable gain realized, if instead I borrow $5mil at an 8% rate against that property that isn't a realization event. So the wealthy lever up assets and then when they die the beneficiaries will get a step up in basis in the asset. So, that $10mil property with zero basis is now a $10mil property with $10mil in basis. If the beneficiaries turn around sell for $10mil, there is no gain. You can then use the proceeds to pay down any remaining debt. The idea would be to make the borrowing against the property a realization event for the super wealthy so that in the example above, when an owner borrows the $5mil, it will be taxable. That route is a lot easier than a wealth tax.