After nearly a century, America has rediscovered the wealth tax. This November, Californians will vote on Proposition 40, a union-backed initiative levying a one-time 5% tax on the net worth of the state's billionaires. Senator Bernie Sanders and Representative Ro Khanna have introduced a federal version; a dozen states have advanced millionaire or billionaire taxes this year; and Maine, Washington, Hawaii, and Rhode Island have all enacted one. Not since the Progressive Era has taxing the rich had this much momentum.

The energy is easy to understand. The 25 wealthiest Americans pay a “true tax rate” of just 3.4%—a fraction of what nurses and teachers pay—while holding about 2% of the nation's wealth. That’s nearly as much as the entire bottom half of the country combined. 

This spring, Forbes counted a record 3,428 billionaires worth $20.1 trillion, up $4 trillion since last year. Elon Musk topped the list at $839 billion, and this summer he became history's first trillionaire. At the same time, workers' share of economic output fell to 52.8%, the lowest since records began in 1947. Today, billionaire wealth is at an all-time high while labor's share is at an all-time low. 

One obvious response is to tax the fortunes at the top and redistribute those funds. But I worry that the wealth-tax movement is aimed at the wrong target. Billionaires create a lot of damage, to be sure. As Alex Gibney’s new documentary Musk lays out, the Tesla and SpaceX CEO spent nearly $300 million helping elect a president and then slashed federal agencies, including several investigating his own companies. Still, he and his tech-bro pals are not themselves the underlying reason for our economic dysfunction. 

In my view, the root cause is corporate power—the way modern corporations are owned, governed, and permitted to organize markets and politics to their own advantage—and how relentlessly that power has concentrated over the past 50 years. The evidence is everywhere. Since the........

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