How can the U.S. reverse democracy-distorting concentrations of wealth and power? A federal annual wealth tax must be part of the equation.

The richest 0.1 percent — the top one-thousandth of households, who are all worth over $50 million — have seen their wealth surge since the beginning of the 2020 Covid Pandemic. U.S. billionaires have seen their wealth double since 2019, with the top 19 U.S. billionaires adding $1 trillion to their wealth in 2024 alone.

Politicians and the public are waking up to the disruptive impact of billionaires, as chronicled in my recent book, Burned by Billionaires: How Concentrated Wealth and Power are Ruining Our Lives and Planet. But most policy prescriptions fall short of truly addressing the accumulated wealth and power of the richest 0.1 percent.

While Congress was busy passing an enormous tax cut for the ultra-wealthy, campaigners from Massachusetts to Washington State have put forward several state-level “millionaire taxes” that are essential ways for states to build fairer tax systems with or without federal participation.

Hiking top income tax rates collects more revenue from the “working rich” — those with high incomes like doctors, lawyers, and CEOs. Those with substantial asset wealth have found countless ways to play shell games and reduce their income taxes, including their capital gains tax burden. (Ray Madoff’s new book, The Second Estate: How the Tax Code Made An American Aristocracy, covers their crafty avoidance mechanisms).

California’s proposed emergency one-time 5 percent wealth tax on billionaires is the boldest of the state initiatives. It has the vulnerability of any progressive state level policy: The global billionaire class moves their money around the planet into tax havens that compete for business. Even mere threats billionaires make that they’ll move have rattled state voters. (It’s important to note that post-millionaire’s-tax Massachusetts has seen notably low attrition — there was some bluffing going on.)

There is no taxation silver bullet because America’s wealthy hire phalanxes of “wealth defense industry” attorneys and money managers with ample tax avoidance tools at their disposal. (See my book The Wealth Hoarders for more.)

The U.S. needs an “ecosystem” of tax reforms including patches to the income tax, a robust inheritance tax (to replace the porous estate tax), and meaningful oversight enforcement — so billionaires can’t wriggle their way past borders to avoid paying their fair share.

An essential cornerstone of reducing extreme wealth inequality is a federal annual wealth tax with severe penalties for billionaires that renounce their citizenship to avoid taxation. Two bold proposals have been introduced in the last few weeks that should be celebrated and supported.

Senator Bernie Sanders and Rep. Ro Khanna (D-CA) have introduced the “Make Billionaires Pay Their Fair Share Act” that would levy a 5 percent wealth tax on households with over $1 billion, mirroring the California billionaire........

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