Inequality has boomed so much in the 2020s that a 2 percent wealth tax on multimillionaires initially introduced in 2021 would yield more than twice as much revenue today.

The analysis, from University of California, Berkeley, economists Emmanuel Saez and Gabriel Zucman, reveals the incredible volume of capital income, currently not reached by the U.S. tax code, and could prove vital for the ongoing debate about taxes that has taken over the Democratic Party in recent weeks.

On Thursday, Sen. Elizabeth Warren (D-MA) rereleased proposed legislation that taxes households with net wealth of over $50 million annually. The tax is set at 2 percent of total wealth; the legislation adds a 1 percent surtax for households with over $1 billion. To guard against wealthy individuals who respond to this by leaving the country—even though they move at lower rates than middle-class households, even when faced with higher taxes—it adds a 40 percent “exit tax” on anyone with net wealth over $50 million who renounces their citizenship.

More from David Dayen

Warren made the 2 percent wealth tax a hallmark of her 2020 presidential campaign. At the time, the tax, which was more punitive on billionaires—it imposed a 6 percent tax on wealth for households over $1 billion—was estimated to bring in $3.75 trillion in revenue over ten years, enough to finance universal child care and pre-kindergarten, free public colleges, student loan cancellation, and a down payment on Medicare for All, according to a campaign document.

When Warren returned to the Senate in 2021, she revised the wealth tax to look pretty much the same as it does today, with the smaller additional levy on billionaires. Saez and Zucman analyzed that bill at the time and found that it raised a more modest $3 trillion over ten years, while only affecting the top 0.05 percent of Americans.

But Saez and Zucman conducted the same analysis on the new bill with updated data on the fortunes of the ultra-wealthy. And this time, they found that it would raise $6.2 trillion, more than double the original figure. This means that top-end wealth has approximately more than doubled in only five years.

The 19 richest households in America added $1 trillion in wealth in 2024—an amount greater than the entire economy of Switzerland.

“I had to check the revenue estimate to double-check they hadn’t changed the rates,” said Bharat Ramamurti, who was policy director for Warren during her presidential campaign and later worked at the National Economic Council under Joe Biden.

Research conducted by Saez, Zucman, and others reinforces the stratospheric direction of the ultra-wealthy. The 19 richest households in America added $1 trillion in wealth in 2024, according to a Zucman study. This was the largest one-year increase on record and an amount that’s greater than the entire economy of Switzerland. That study also revealed there were 1,370 billionaires in the country in 2021 and 1,990 by 2024, a 45 percent increase. Saez and Zucman have a new tracker called Realtime Inequality that will be updated soon, but some of its data on household wealth made it into a Wall Street Journal article showing significant rises at the very top in the past several years.

Saez confirmed to the Prospect that billionaire wealth has more than doubled since 2019. “The U.S. economy is now so top-heavy that ultra-rich wealth taxes can be very large revenue raisers,” he said.

Inequality has accelerated since the election of Donald Trump. Oxfam reports that billionaires accumulated wealth last year at three times the average annual rate over the 2020s, and the Institute for Policy Studies calculated 25 percent gains on wealth for billionaires over the past year. Federal Reserve data showed that in the third quarter of 2025, the top 1 percent held $55 trillion in assets, equal to 31.7 percent of all wealth. That exceeds the level of the lowest 90 percent.

Though fortunes have softened somewhat thanks to a fallout in high-tech and software stocks this year, there are still 17 centibillionaires around the world, and 14 of them hail from the United States.

The reasons for rising inequality in the 2020s are diverse, but they begin with the pandemic, when the Federal Reserve rescued corporate stock portfolios by committing $4.5 trillion to bail out securities markets. The term “K-shaped economy” was inaugurated at that time and has only became more pronounced in the years since. Inflation affected average income earners to a much greater degree than the wealthy, whose discretionary income is much higher.

More recently, the stock frenzy around artificial intelligence has minted billionaires who are flush with on-paper wealth. After a fall in 2022 largely tied to inflation, the S&P 500 index increased by 23.8 percent in 2023, 23.9 percent in 2024, and 16 percent in 2025. While more than half of Americans own stock, the richest hold a disproportionate share of equities.

The lion’s share of this money is out of reach of traditional taxation. According to the Federal Reserve, nearly three-quarters of the wealth of the top 0.1 percent comes from equities, mutual funds, or business shares. Most stocks, bonds, and exchange-traded funds that are bought and held, and all assets held in retirement accounts, do not generate taxable capital gains. All the millionaire taxes that have proliferated across the country—from a Massachusetts levy in 2023 to a new tax in Washington state this month to a possible millionaire levy in New York—are taxes on earned income, not capital. And lawyers and accountants have devised countless avoidance strategies to retain individual wealth.

Elizabeth Warren’s Amazingly Progressive Housing Bill

As a general matter, wealth does not get taxed outside of state-level property taxes. The Warren proposal is among several, including a 5 percent wealth tax solely on billionaires proposed by Sen. Bernie Sanders (I-VT) and Rep. Ro Khanna (D-CA) and a ballot initiative currently in the field in California that would impose a one-time wealth tax of 5 percent on billionaires, that have been put forward in recent years to deal with the erosion of a tax base that doesn’t include a large amount of capital income.

The doubling of estimated revenues from the Warren wealth tax adds a new dimension to the debate on how to redesign the tax code. Several Democrats have endorsed large middle-class tax cuts that detractors say hollow out the tax base amid other competing federal priorities. But the numbers do show that the bulk of the money available for taxation is currently shielded and growing larger by the day.

“The only silver lining to the fact that billionaires have doubled their wealth in the last 5 years—while working families are getting squeezed—is that the estimated revenue from my wealth tax proposal has also doubled,” said Sen. Warren in a statement to the Prospect. “That’s more homes we can build, more kids we can send to college without debt, more parents we can lower child care costs for, and more health care we can provide through Medicare—with money left over to better our country.”

One of the sponsors of a middle-class tax cut bill, Sen. Chris Van Hollen (D-MD), co-sponsored the Warren wealth tax proposal.

Billionaires are determined to keep their loot, of course. They have an full-fledged member (at least if you believe his numbers) in the White House, and 2 percent of all billionaires in the country are members of the Trump administration. One in five dollars spent in the 2024 election came from a billionaire, and that number will likely be similar, if not higher, this election cycle. A $500 million fund just to influence politics in California has been raised by Silicon Valley elites.

So billionaire wealth is escalating in campaigns, and subsequently billionaire wealth is escalating. That’s what’s known as return on investment.

Read more

David Dayen is the executive editor of The American Prospect. He is the author of Monopolized: Life in the Age of Corporate Power and Chain of Title: How Three Ordinary Americans Uncovered Wall Street’s Great Foreclosure Fraud. He co-hosts the podcast Organized Money with Matt Stoller. He can be reached on Signal at ddayen.90.