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Will Donald Trump’s “One Big Beautiful Bill,” as critics contend, be a massive giveaway to the rich?

Absolutely, when you tally it up. Yet the bill’s provisions, while devastating to the nation’s poorest, represent only modest gains for the majority of affluent families. Consider the merely rich—the top-earning 10 percent of households. The Congressional Budget Office estimates that the House version of the bill will increase average after-tax resources of those families by about $12,000, or 2.3 percent—hardly life-changing for families that bring home an average of $522,000 a year after taxes. (It may well prove life-changing for families on Medicaid and food stamps, and not in a good way.)

And what of the “ultrawealthy”—which I’ll define as households with at least $100 million in assets, enough to break into the richest 0.01 percent? For them, the financial benefits are even less meaningful, amounting to maybe five days’ worth of growth in their asset portfolios—basically a rounding error.

Our tax code is based on a fiction—the idea that investment gains aren’t income until the underlying investments are sold.

All of which begs the question: Is America’s progressive income tax—enacted by Congress way back when in part to tame Gilded Age excess—even capable of curbing the wealth inequality now eating away at our social and political fabric?

The answer: a resounding no. Even if Congress were to create a 100 percent tax bracket for people with millions of dollars in earnings, their wealth would keep growing relative to everyone else’s. 

That’s because the government’s definition of taxable income doesn’t track with true economic income, and this disconnect grows as one proceeds further up the wealth ladder. At the uppermost rungs, barely 10 percent of an ultrarich person’s economic income shows up on their 1040.

The root of the problem is that our tax code is based on a fiction—the idea that investment gains aren’t income until the underlying investments are sold. Yet that economic income is what keeps adding zeros to the asset balances of the ultrarich. The explosive growth of those untaxed assets over four decades has resulted in a US wealth distribution more extreme, for example, than countries such as Pakistan and Democratic Republic of the Congo.

To visualize America’s extraordinary wealth concentration, consider the richest 0.01 percent of US households—the top 1 percent of the top 1 percent. It’s really........

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