taxing billionaires: the idea vs. the reality
Everything you need to have a smarter conversation about taxing extreme wealth.
the nuance is a space to think clearly about polarizing topics. We lay out the sides, go deeper than mainstream discourse, and give you the frameworks to figure out where YOU actually stand — then tools to put it to work.
Most people agree billionaires should pay more in taxes, but modern discourse glosses over just how hard it is to make that happen.
The wealth of the ultra-rich mostly isn’t cash sitting in an account. It’s ownership stakes in companies (think Meta, Tesla, Amazon) — stakes that grow enormously in value but don’t actually generate income until they’re sold. Think about your house… if it doubled in value, you don’t pay taxes on that gain until you sell it. Now imagine that house is worth $80 billion.
Our tax system was built around income, which means there’s a complicated gap between “billionaires paying more” and real policy.
The real question: What does extreme wealth owe society, and can our system ever collect it?
the basics
One side says: Billionaires are proof the system is rigged. Nobody earns a thousand times more than a nurse by working a thousand times harder. Tax them, and tax them hard.
The other side: These are people who built things — companies, jobs, products people chose to buy. Punitive taxes kill the incentive to take the risks that create this level of innovation and abundance.
The result: Both sides are really arguing about whether billionaires deserve what they have — when the more confounding question is already sitting in front of us: how do you tax wealth that was never a paycheck, never hit a bank account, and can’t easily be sold?
It’s a design problem.
the hard part
the income problem
Here’s something most people don’t know: a billionaire can borrow $1 billion from a bank, using their shares of stock as collateral, spend that money, and owe zero taxes on it. Because borrowing isn’t income. The shares never sold, so no taxable event ever occurred.
There’s even a name for it on Wall Street: Buy, Borrow, Die — a strategy that lets extreme wealth fund a lifestyle, defer taxes indefinitely, and ultimately pass to heirs with the bill largely erased.
the valuation problem
Public company stock is easy to price — we know exactly what a share of Apple or Google is worth at any moment. But a lot of billionaire wealth isn’t in public companies. A founder whose startup is worth an estimated $10 billion and hasn’t gone public yet — think early Uber, early Airbnb — exists in murkier territory. Who decides what it’s worth? How often? What if they’re wrong?
And here’s the more immediate problem: if she owes taxes on that paper value, where does the money come from? She can’t sell a slice of her private company to cover the bill. She might have billions on paper and almost nothing she can actually spend.
the leaving problem
France introduced a wealth tax in 1982. By the time it was repealed in 2017, an estimated 60,000 millionaires had left the country, taking capital with them. The tax consistently raised less than projected. Sweden had a similar experience and scrapped theirs too.
Any serious proposal has to answer a tough follow-up: when wealth is mobile and its owners can choose where to live, how do you keep it here long enough to tax?
think it through
There are four ways to make sense of this issue. This is where you get clearer on where you stand, and start to see the ground other perspectives are built on.
MERIT — They built something valuable. Markets aren’t perfect, but they’re the best measure of value we have.
If a company grew to be worth $200 billion, it created something people wanted, and the founder’s stake reflects that. Heavy taxation above some threshold punishes the risk-taking that made it possible — and sends the wrong signal to the next generation of founders.
ASPIRATION — I’m not a billionaire, but I want wealth — and I don’t trust where the line gets drawn.
An attack on extreme wealth rarely stays there. Today it’s billionaires, tomorrow it might be anyone who built something or made it into a higher tax bracket.
POWER — This much private wealth is undemocratic.
When a handful of people control capital on the scale of national economies, it quickly becomes a political question. This kind of wealth shapes elections, controls media, and sets the policy agenda. At some point the question isn’t whether they earned it — it’s whether any private citizen should have that much leverage over public life.
SOCIAL CONTRACT— No one needs a billion dollars. Society has a right to tax it heavily.
Wealth inequality isn’t abstract; it’s quite visible. When a handful of people accumulate more than they could spend in a thousand lifetimes while wages stagnate and public services erode, the moral case for higher taxes isn’t complicated. The system enabled this wealth, so the people left behind by that same system are owed something in return.
go have the conversation
You have the issue, the complexity, and four frameworks. Here’s how to put them to work.
what to listen for
When this topic comes up, people reveal their lens fast.
Someone talking about founders, innovation, and risk-taking is coming from Merit. Someone who feels personally implicated (“I worked hard for what I have”) is coming from Aspiration. Someone focused on elections, media, and concentrated influence is coming from Power. Someone talking about inequality, wages, and what people deserve is coming from Social Contract.
Once you hear the lens, you know what they actually care about.
the tradeoffs at play:
Taxing wealth that was never income requires tools we don’t have yet
The more aggressive the tax, the more mobile the wealth becomes
Protecting innovation incentives and reducing inequality pull in opposite directions
Believing billionaires should pay more and knowing how to make that happen are two different problems.
here’s what it sounds like in practice
“Nobody needs a billion dollars, and the inequality is real. But ‘just tax them’ isn’t a policy — it’s a sentiment. I want to see a serious answer to billionaires just leaving before I sign on.”
“I believe people who build real things should keep most of what they build. But a system that lets extreme wealth fund an entire lifestyle without ever generating a taxable event isn’t a market outcome — it’s a design flaw worth fixing.”
“I don’t trust where the line gets drawn next. But I also can’t ignore that the wealthiest people have largely opted out of the system everyone else funds. That’s not sustainable either.”
That’s the nuance. Think for yourself.
j
Here’s how I think about this: we never talk about taxes as what they actually are: a transaction. Payment for services rendered. Roads, courts, schools, the stability that lets a company grow to be worth $200 billion in the first place. Nobody loves paying into that, but it’s what a functioning society is built on.
When the people who’ve benefited most visibly opt out, it corrodes the whole relationship. And it traces back to something deeper…a culture that seems to grow more individual and less collective over time.
I’m not saying a billionaire should want to pay taxes. None of us do. But we’d be right to remember what the transaction actually is, and what breaks down when people stop honoring it.
The nuance exists to make it easier to think critically and have more productive conversations with people who don’t see things the way you do.
If you found value in it, the most impactful thing you can do is forward it.