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THE FIVE & DIME SOLUTION TO WEALTH CONCENTRATION  
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Gabriel Zucman
June 10, 2025
The Guardian
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_ Unprecedented wealth concentration – and the unbridled power that
comes with it – distorts our democracy and drives societal and
economic tensions. The Five & Dime tax would would break up
concentrated wealth and generate substantial new revenue. _

"Elon Musk - Caricature", by DonkeyHotey (CC BY 2.0)

 

As the world watches Donald Trump
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over the sweeping legislation moving through Congress, we should not
let the drama distract us. There is something deeper afoot:
unprecedented wealth concentration – and the unbridled power that
comes with such wealth – has distorted our democracy and is driving
societal and economic tensions.

Musk, the world’s richest man, wields power no one person should
have. He has used this power to elect candidates that will enact
policies to protect his interests and he even bought his way into
government. While at the helm of Doge, Musk dramatically reshaped the
government in ways that benefit him – for instance, slashing
regulatory agencies investigating his businesses
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and hollowed out spending to make way for tax cuts that would enrich
him.

Musk is just one example of the ways in which unchecked concentration
of wealth is eroding US democracy and economic equality. Just 800
families in the US are collectively worth almost $7tn
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a record-breaking figure that exceeds the wealth of the bottom half
of the US combined. 
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money through labor, these ultra-wealthy individuals let the tax code
and their investments do the work for them. Under the current federal
income tax system, over half
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the real-world income available to the top 0.1% of wealth-holders
(those with $62m or more) goes totally untaxed
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As a result, billionaires like Elon Musk and Jeff Bezos have gotten
away with paying zero dollars in federal income taxes in some
years, 
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when their real sources of income were soaring.

On the other side, millions of hard-working Americans are struggling
to make ends meet. Their anxiety is growing as tariffs threaten to
explode already rising costs.

A broken tax code means unchecked wealth-hoarding. The numbers are
staggering: $1tn of wealth was created for the 19 richest US
households just last year
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put that number into perspective, that is more than the output of the
entire Swiss economy). That was the largest one-year increase in
wealth ever recorded. I have studied this rapidly ballooning wealth
concentration, and like my colleagues who focus on democracy and
governance, I am alarmed by the increasingly aggressive power wielded
by a small number of ultra-wealthy individuals.

The good news is, hope is not lost. We can break up this dangerous
concentration of wealth by taxing billionaires. There is growing
public support for doing just this, even among Republican voters. A
recent Morning Consult poll found that 70% of Republicans
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Americans should pay higher taxes”, up from 62% six years ago.

With many of Trump’s 2017 tax cuts for the wealthy set to expire
this year, legislators have an opportunity to reset the balance
driving dangerous wealth-hoarding. Rather than considering raising
taxes on middle-class Americans or even households earning above
$400,000, they must focus on the immense concentration of wealth among
the very top 0.1% of Americans. This would not only break up
concentrated wealth, but also generate substantial revenue.

One mechanism for achieving this goal is a wealth tax on the
ultra-wealthy. The Tax Policy Center recently released an analysis of
a new policy called the Five & Dime tax. This proposal would impose a
5% tax on household wealth exceeding $50m and a 10% tax on household
wealth over $250m. The Five & Dime tax would raise $6.8tn over 10
years, slow the rate at which the US mints new billionaires, and
reduce the billionaires’ share of total US wealth from 4% to 3%.

While breaking up dangerous wealth concentration is reason enough to
tax billionaires, this revenue could be invested in programs that
support working families and in turn boost the economy. Lawmakers
could opt for high-return public investments like debt-free college,
helping working families afford childcare, expanding affordable
housing, rebuilding crumbling infrastructure, and strengthening
climate initiatives.

Ultimately, taxes on the ultra-rich could transform American society
for the better and grow the economy
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discouraging unproductive financial behaviors and promoting fair
competition – leading to a more dynamic and efficient system.

Critics will inevitably claim such a tax would stifle economic growth
or prove too challenging for the IRS to implement. But in our highly
educated nation, the idea that growth and innovation comes from just a
handful of ultra-wealthy individuals does not withstand scrutiny. And
while there are challenges for administering any bold proposal,
America has always been up for a challenge.

After witnessing the consequences of billionaire governance firsthand
under this administration, Americans understand what’s at stake. We
are seeing how unchecked, astronomical wealth has corrupted American
democracy and stifled the economy. It’s not too late to act. Now
it’s time for lawmakers who care about the country’s future to
embrace solutions that empower everyone, not just the few at the top.

_Gabriel Zucman is professor of economics at the University of
California Berkeley and the Paris School of Economics_

_The Guardian [[link removed]] is globally renowned
for its coverage of politics, the environment, science, social
justice, sport and culture. Scroll less and understand more about the
subjects you care about with the Guardian's brilliant email
newsletters
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free to your inbox._

* economic inequality
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* plutocracy
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* Oligarchy
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* Elon Musk
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* Donald Trump
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* tax reform
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* wealth tax
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