Taxing the Billionaires: Wealth-Tax Debates From California to Warren
The Million Dollar Question: After Norway raised its wealth tax in 2022 and roughly 300 wealthy Norwegians relocated abroad, what happened to the government’s reported wealth-tax revenue?
A) It fell by roughly a quarter B) It fell slightly C) It was roughly flat D) It rose by roughly a quarterRead on for the answer.
Between 2024 and 2026, a tax on billionaire wealth was proposed in Washington, Sacramento, Olympia, Paris, Bern, and at the G20. It lost, stalled, or was voted down in every one of them. In France it lost while 86% of poll respondents said they supported it. In Switzerland it lost at an actual ballot box by 78% to 22%. This piece explains what a wealth tax actually is, how the three main designs differ, what the credible revenue numbers look like, why the arithmetic is harder than either side of the argument tends to admit — and what the Norwegian experiment really shows.
What it is
A wealth tax is a levy on the stock of what you own, charged every year, rather than on the flow of what you earn. Income tax asks what came in last year. A wealth tax asks what the pile is worth today, subtracts debts, and takes a percentage of the remainder — typically 1% to 3%, above a very high threshold.
That distinction is the entire argument. Someone who owns $3 billion of founder stock and takes a $1 salary has almost no taxable income. If they need cash, they can borrow against the position rather than sell it, which is not a taxable event. Under an income tax they contribute close to nothing. Under a wealth tax they owe money every year regardless.
Three quite different policies get bundled under “tax the billionaires,” and they are not interchangeable:
- A net wealth tax — an annual percentage of net worth above a threshold. This is Senator Elizabeth Warren’s proposal, Norway’s actual system, and the classic European model.
- A billionaire minimum income tax, or mark-to-market — treats annual increases in the value of tradable assets as income, taxing paper gains as they accrue rather than at sale. Structurally an income tax, which matters enormously in the United States for constitutional reasons.
- A minimum effective tax rate on wealth — economist Gabriel Zucman’s G20 blueprint, which doesn’t create a new tax at all. It says a billionaire’s total tax bill must equal at least 2% of their net worth; anyone already paying that owes nothing extra.
Most public debate treats all three as the same thing. Legislatures do not, and the differences decide which ones survive.
Who levies one
Fewer countries than the volume of debate would suggest. According to the OECD’s survey of net wealth taxes, twelve member countries levied one in 1990. By 2020 there were three: Norway, Spain, and Switzerland. Austria dropped its version in 1994, Denmark and Germany in 1997, the Netherlands in 2001, Finland, Iceland and Luxembourg in 2006, Sweden in 2007. France was last out in 2018, replacing its wealth tax with a narrower levy on high-value real estate.
The three survivors show how differently the same idea can be built:
- Norway taxes net worth above 1.9 million kroner in 2026 — about $197,000 — at 1%, rising to 1.1% above 21.5 million kroner (about $2.2 million). Primary residences count at a quarter of market value; bank balances and listed investments count in full. The threshold is low by international standards; this is a tax that reaches ordinary affluent households, not only billionaires.
- Spain layers a national “solidarity tax” on large fortunes above €3 million (about $3.4 million) on top of a regional wealth tax, specifically to stop regions like Madrid from zeroing it out. Tax Justice Network’s analysis describes it as a national floor rather than a new burden.
- Switzerland runs wealth taxes at the cantonal level, at low rates, with valuation rules negotiated locally — and has done so for more than a century without political drama.
In the United States, no wealth tax exists at any level of government. The proposals aim much higher than Norway’s. Warren’s Ultra-Millionaire Tax Act of 2026 starts at $50 million of net worth, which its sponsors say reaches roughly the top 0.15% of households. California’s AB 259 targeted the top 0.1% of state residents. These are not taxes on the merely wealthy. A household at $5 million or $30 million is outside every serious American proposal.
Why governments reach for it
The honest case is not envy. It is that income tax has a structural blind spot, and at the top of the distribution the blind spot is most of the money.
Zucman’s G20 report estimates that the world’s roughly 3,000 billionaires pay total taxes equal to about 0.3% of their wealth each year. That number is doing a specific job: it is not an income tax rate, it is tax paid measured against assets held. A dentist earning $400,000 pays a meaningful share of income in tax because nearly all of her economic gain arrives as income. A founder whose stake appreciates by $800 million pays tax on whatever she chose to realize, which can be nothing.
Governments also reach for it because the money is real and the base is small enough to be politically cheap. Warren’s sponsors put the ten-year yield at $6.2 trillion, scored by Emmanuel Saez and Gabriel Zucman. Note what happened to that estimate: the same economists scored the 2021 version of essentially the same bill at about $3.0 trillion. The rates did not change. The doubling is a statement about how much wealth accumulated above $50 million in five years.
And there is a constituency inside the target group. The Patriotic Millionaires, whose members include the filmmaker Abigail Disney, spent April 2026 lobbying Congress for higher taxes on themselves. Their argument is less about fairness than stability — that concentrated wealth eventually buys political outcomes, and that a tax is the cheaper way to resolve it.
How it works — and why the US case is different
Mechanically, a wealth tax needs four things: a threshold, a valuation rule, an enforcement regime, and an anti-exit provision.
The threshold is the easy part. Valuation is where the policy lives or dies. Publicly traded stock has a closing price. A private company, a general partnership interest, a collection of paintings, farmland, a stake in a family holding company — none of these have a price until someone sells. A wealth tax requires assigning one anyway, every single year, in a way that survives litigation.
Anti-exit provisions have become the design frontier. Norway tightened its exit tax in the 2025 national budget: unrealized gains on shares are taxed on emigration, with an allowance of 3 million kroner, and the bill must be settled within twelve years even if nothing has been sold — waived entirely if the taxpayer moves back. Warren’s bill goes further, adding a 40% charge on the net worth of anyone above $50 million who renounces US citizenship.
Then there is the American constitutional problem, which has no European equivalent. The Constitution requires that “direct taxes” be apportioned among the states by population — a requirement that is essentially impossible to satisfy for a wealth tax, since wealth is not distributed by headcount. The Sixteenth Amendment exempts taxes on income from that rule. So everything turns on whether a levy on unsold appreciation is an income tax or a direct tax.
The Supreme Court had the chance to settle this in Moore v. United States (2024) and deliberately did not. The Court upheld the 2017 tax law’s mandatory repatriation tax on narrow grounds and, as the Congressional Research Service put it, declined to decide whether the Sixteenth Amendment requires realization before income can be taxed. The concurrences went opposite directions — Justice Barrett indicating that taxing unrealized gains would likely need apportionment, Justice Jackson suggesting it would not. Every American wealth-tax bill is therefore drafted into legal uncertainty, and that uncertainty is itself a reason legislators hesitate to spend political capital on one.
What it costs, and what it raises
The headline numbers, in the currency of each proposal converted to dollars:
| Proposal | Design | Claimed yield |
|---|---|---|
| Warren, Ultra-Millionaire Tax Act of 2026 | 2% above $50M, 3% above $1B | $6.2T over ten years |
| California AB 259 | 1% above $50M, +0.5% above $1B | ~$21.6B a year |
| France, the “Zucman tax” | 2% floor above €100M (~$114M) | €15–20B a year (~$17–23B) |
| Zucman G20 blueprint | 2% minimum effective rate on billionaires | $200–250B a year globally |
Set against the one place with a full accounting: Spain’s solidarity tax, applied to fortunes above €3 million, raised about €632 million — roughly $720 million — across its first two years, from about 12,010 taxpayers, or 0.1% of Spanish filers. Real money, and roughly two orders of magnitude below what the American proposals project. Different base, different thresholds, different economy — but it is the only number in the table that describes collections rather than projections.
For the taxpayer, the cost is easier to state. At 2%, a $200 million net worth owes $3 million a year on the amount above $50 million. Whether that is painful depends entirely on whether the portfolio yields more than 2%, and on whether it can be sold. Diversified public equity comfortably clears the bar. A single illiquid position — a private company, a family business, a large real-estate holding — may not, in which case the tax must be paid by borrowing or by selling something.
Hidden costs and tradeoffs
Valuation is not a detail; it is the whole job. Most wealth above $50 million is not in index funds. It is in closely held businesses, partnerships, real estate, and unique assets. Valuation of those is, as the Congressional Research Service notes in its overview of wealth taxes, subjective, contestable, and expensive to administer. Every valuation is an invitation to litigate, and the taxpayer has more resources and more time than the agency.
The scale of that mismatch is easy to underestimate. Critics of the proposals, including the Cato Institute, point to the IRS’s twelve-year fight with the estate of Michael Jackson over asset values — a single estate, a one-time assessment, over a decade. A wealth tax would require doing that annually, for tens of thousands of households. Even if the tax is sound in principle, the administrative cost per dollar collected is higher than for almost any other levy.
Mobility is real, and asymmetric. People whose income comes from a job are hard to relocate. People whose income comes from capital are not. That asymmetry is why exit taxes keep getting bolted on, and why exit taxes then generate their own litigation and treaty problems.
Lock-in and distortion. A tax on the value of a thing, rather than on gains from selling it, changes what people hold. It pushes money toward assets that are hard to value and away from assets that price transparently — the opposite of what a tax authority wants.
Political durability. Perret’s review of the European repeals in Fiscal Studies finds that the taxes that died mostly died from design: narrow bases, generous carve-outs for the assets the wealthiest actually held, and thresholds low enough that the tax landed on the upper middle class while the largest fortunes structured around it. That is a failure mode worth taking seriously, because it is a failure the modern proposals are explicitly trying to design against.
What people get wrong
That Norway proves flight destroys the tax base. It does not, at least not in the reported receipts. Norway raised the rate in 2022 and roughly 300 wealthy residents relocated, most of them to Switzerland, with the industrialists Kjell Inge Røkke and John Fredriksen the most-cited names. Yet Norway’s finance ministry expected about 34 billion kroner in wealth-tax revenue in 2025, up from about 27 billion in 2022 — a rise from roughly $2.8 billion to roughly $3.5 billion, up about a quarter.
That Norway therefore proves flight doesn’t matter. Also not established. The critics’ figure is not about receipts; it is about the counterfactual. Business school professor Ole Gjems-Onstad estimated the departing Norwegians took roughly $54 billion of assets with them, and critics argue the associated dividend and income tax losses exceeded the wealth-tax gain. Both claims can be true simultaneously: the tax collected more from the people who stayed while permanently removing some of the base. Which effect dominates over twenty years is genuinely unknown, and anyone claiming certainty in either direction is arguing past the evidence.
That polling predicts outcomes. It has not, once. Switzerland put a 50% federal tax on inheritances above 50 million francs (about $61 million) to a national vote on 30 November 2025. It was rejected by 78.3% of voters and in all 26 cantons — a wider margin than the 71% rejection of a similar 2015 attempt with a far lower threshold. In France, a proposal polling near 86% was voted down in both chambers. Voters who tell pollsters they favor taxing extreme wealth appear to behave differently when asked to enact a specific mechanism, particularly where family businesses and farms are involved.
That the wealth tax is where the action is. Look at what actually passed. Washington State legislators pushed a 1% annual tax on financial intangible assets above $50 million; it stalled in committee in 2025 and again in 2026, partly because the state attorney general’s office had flagged constitutional risk. What Washington enacted instead, in March 2026, was a 9.9% tax on household income above $1 million, effective 2028. California’s AB 259 died in committee. Norway’s most consequential recent change was to its exit tax, not its wealth tax. The pattern is consistent: net-worth levies stall, and realization-based measures — income surtaxes, exit taxes, estate taxes — pass.
That “billionaires pay nothing” is a statement about tax rates. The 0.3% figure is tax measured against wealth, not against income. It is a legitimate and clarifying way to frame the problem, but it is not comparable to the marginal rate on a paycheck, and treating the two as the same number is the fastest way to lose an argument with someone who knows the difference.
Bottom line
The answer to the Million Dollar Question is D — Norway’s reported wealth-tax revenue rose by roughly a quarter, from about 27 billion kroner in 2022 to an estimated 34 billion in 2025, even as roughly 300 wealthy Norwegians left. That is the fact both camps cite, and both are entitled to. Supporters read it as proof that flight is overstated. Critics read it as a short-run number that ignores the assets, dividends and future growth that walked out with the departures. The honest position is that a five-year window is too short to settle a question about capital that compounds over decades.
What the last two years do settle is which mechanism has a future. A pure annual tax on net worth has now lost in a French Senate vote, a Swiss referendum by better than three to one, a California committee, and two consecutive Washington State sessions, while the American version sits behind a constitutional question the Supreme Court explicitly declined to answer in Moore. Meanwhile income surtaxes, exit taxes and estate taxes keep passing. The pressure to tax large fortunes is not going away — the base has doubled in five years by the sponsors’ own scoring, which is precisely why the demand keeps returning. But the instrument that eventually does it is more likely to be one that waits for a transaction than one that tries to price a private company every January.
Related reading: Taxes: How Wealth Is Structured and Preserved · Anatomy of the Forbes 400: Who’s Actually On the List · Billionaire Rankings: How Extreme Wealth Is Counted · Campaign Donors: Money in Modern Politics · The Giving Pledge: Public Promises, Private Delivery
