Wealth taxes are on the table. The California proposal for a one-time 5% tax on the net wealth of billionaires is roiling the Democratic Party. This proposition would raise about $100 billion to re-fund the Medi-Cal system after the dramatic federal cuts to the program with the “One Big Beautiful Bill.” Governor Gavin Newsom is against it, and he may be tanking his 2028 ambitions if he continues to oppose it.

Democrats are well positioned to win the next two national elections if they stay focused on affordability and come up with viable ways to dramatically increase standards of living. But given how tarnished their brand and the depth of public distrust, they cannot succeed unless they develop a campaign around a believable plan for transformational change. To do that, they need to run against a rigged tax system.

The main argument for a wealth tax, as opposed to income or other taxes, is pragmatic: it is the only source of the kind of revenue the federal government is going to need if it is going to make a substantial difference in improving the lives of most Americans. Personal income and corporate profits combined amount to a bit more than $30 trillion a year. The total net wealth of all Americans is more than six times larger at $200 trillion. The government taxes the two little bitty piles—first as income, then as sales taxes, often as property taxes and fees, and more recently, as tariffs. The big pile is the least taxed. What sense does that make?

The top 1% in the United States all by itself has double the wealth of all income in a given year—about $60 trillion now. If we taxed only the wealth of the top 1% at the 2% rate now proposed in France, it could produce about $1.2 trillion a year in the US. Josh Bivens of the Economic Policy Institute recently did a very sophisticated study of various ways to tax the rich. He came up with a total of $1 trillion in additional revenue in 2026 if nine reforms were enacted. The wealth tax he used produced a little more than half of that. 

Some of the various Democratic proposals to alleviate the affordability crisis wouldn’t cost much (labor law reform, living wage legislation, breaking up monopolies) but others would cost a lot (subsidized child care, Medicare for All, a substantial housing initiative). You might get enough to make a decent start with Bivens’ other eight reforms, but some of them require an accounting degree to understand—e.g., “international tax reforms” and the “closure of the gap in NIIT and SECA tax bases.” Others, like restoring the corporate tax rate to 35% and establishing a 10% tax surcharge on incomes over $1 million, are easier to understand and would produce substantial revenue—$354 billion combined, according to Bivens’s estimate. But that’s just enough to cover comprehensive child care subsidies as proposed in the Build Back Better plan of the Biden administration, and nothing else.

Without a wealth tax of some sort, the Democrats will end up making promises to do things they can’t pay for. What is needed is a simple, believable way to fund a large and potentially transformative wish list: namely, a readily understandable, thoroughly defensible wealth tax.

At this moment in history, any wealth tax proposal is bound to be immediately popular, but I have a few pieces of advice when it comes to framing. First, don’t make it about simple “inequality,” which is an abstraction and which even a vigorous wealth tax won’t reduce much at this point. Make it about what the wealth tax will make possible; how it will restore value to the contributions to our society made by caregivers, electricians, teachers, janitors, factory workers, etc. With a wealth tax, a greatly enhanced social wage (not simply a “safety net”) can be provided for almost everybody.

Second, don’t make it about hating rich people because they’re rich, and emphasize that the kind of wealth taxes being proposed will leave the very wealthy still very wealthy—and in fact, continuing to get wealthier. Hateful rhetoric turns off most people and will likely cause the wealthy to fight harder against any wealth tax. It’s also wise to point out some of the mind-boggling calculations involved: for instance, that a 2% wealth tax might cost the wealthiest less than paying income taxes on the passive income they receive from their wealth.

Indeed, there are a lot of political-economic educational opportunities here. For instance, the portion of wealth owned by the top 1% in 1990 was under 23% and is now almost 32%. If wealth were shared as it was 35 years ago, $14 trillion would be available to distribute among the rest of us.

One primary cause of the redistribution of wealth to the top is the loss of productivity sharing since 1980. For at least three decades before 1980, real wages rose at the same rate as productivity growth. If productivity had been shared since 1980, the median wage for all workers today would be in the neighborhood of $100,000 instead of the $66,000 a year it is now.

Another primary cause is the steady stream of tax cuts from Reagan to Trump that primarily benefit the rich. In 1980 the top marginal tax rate on personal income was 70%; now it is 37%. The top corporate tax rate was nearly 50% in 1980, but now only 21%. The wealthiest 1% of Americans have twice the money in wealth as all income earners combined. Income, property, and sales are all taxed, and affect everybody. Wealth is not. Again, how is that fair? 

Anger at the extreme level of inequality and the way it is being used to impoverish the rest of us is justified and even necessary, and a skilled politician should be able to mobilize it. But that anger will simply be psychological massaging in governing if Democrats can’t pay for a dramatic expansion in the social wage that can make a decent life affordable for everybody. There are several 10-point programs being offered to Dems (e.g., see here and here), and all of them include enhanced social-wage proposals that can unify the party. Some of the programs also have some sort of tax-the-rich plan, but only as a tag-along “pay for.”

Putting a wealth tax at the top and center would be highly popular, especially when used to provide a variety of programs to reduce costs and raise wages, social and market wages. It could also put the Democratic donor class on the defensive in a primary where active Democrats are likely to support such a program. And in a general election, the Republicans have nothing that could compete with it.

Trump’s horrible first year of crony capitalism has opened the door to a renewal of social democracy. Hopefully, Democrats will not be afraid to run through it. 

Jack Metzgar is a retired adult and labor educator from Roosevelt University in Chicago. A founder and past president of the Working-Class Studies Association, he also was a founder of the Midwest Center for Labor Research and editor of Labor Research Review. He is the author of Striking Steel: Solidarity Remembered and, more recently, Bridging the Divide: Working-Class Culture in a Middle-Class Society.