A 2% annual wealth tax on U.S. billionaires would raise roughly $100 billion to $150 billion per year at current wealth levels. The range is wide because billionaire wealth sits mostly in stocks that move with the market, because illiquid assets are hard to value, and because the wealthiest taxpayers will restructure holdings to lower what they owe. It is also a floor built on an assumption that may not hold: any federal wealth tax would face an immediate constitutional challenge, and no version has cleared that hurdle.
How the $100 to $150 Billion Estimate Is Built
Two paths lead to roughly the same range.
The first is arithmetic. Forbes counted 905 U.S. billionaires holding a combined $7.8 trillion in late 2025, with updated lists in 2026 identifying 989. A 2% tax that applies only to wealth above the first $1 billion per person leaves a taxable base near $6.8 to $6.9 trillion. Two percent of that is about $136 billion in gross annual revenue, before any adjustment for avoidance or valuation losses.
The second path comes from the academic modeling most often cited on this question. Emmanuel Saez and Gabriel Zucman at the University of California, Berkeley prepared revenue estimates for Senator Elizabeth Warren’s Ultra-Millionaire Tax Act, projecting about $252 billion in the first year and nearly $3 trillion over ten years.1University of California, Berkeley. Wealth Tax Revenue Estimates by Saez and Zucman Those totals cover the whole proposal, which begins at $50 million in net worth. The billionaire portion is a separate slice: Saez and Zucman attributed about $400 billion over ten years to a 1% surtax on wealth above $1 billion. Doubling that rate to 2% roughly doubles the slice to around $80 billion per year, though the relationship is not perfectly linear because higher rates strengthen the incentive to restructure.
The two approaches bracket the answer. The higher figure assumes clean valuations and limited avoidance. The lower figure builds in behavioral drag. Neither is a forecast; both are extrapolations from current wealth data.
Why the Range Is So Wide
Five variables move the number more than any other:
- Market performance. Billionaire wealth is heavily concentrated in publicly traded equities. A 20% market decline could shrink the taxable base by over a trillion dollars in a single year. A strong bull market pushes revenue well above baseline.
- Valuation of illiquid assets. Private company stakes, commercial real estate, and art collections have no quoted price. Every dollar of value the IRS cannot pin down is a dollar that goes uncollected or gets tied up in disputes.
- Debt netting. The tax applies to net worth, so outstanding liabilities reduce the taxable amount. A billionaire with $2 billion in assets and $300 million in debt has $1.7 billion in net worth, meaning only $700 million sits above the $1 billion threshold. Borrowing heavily against assets is an obvious avoidance route, which is why most proposals include anti-avoidance rules aimed at leveraged structures.
- Behavioral responses. Higher rates raise the payoff for shifting assets offshore, reclassifying wealth, or renouncing citizenship. European experience suggests these responses erode the base meaningfully over time.
- Wealth growth. Federal Reserve data shows top-tier wealth growing faster than the broader economy for decades. If that continues, the base expands on its own and revenue rises over a ten-year window.2Federal Reserve. Distribution of Household Wealth in the U.S. since 1989
How the Tax Would Actually Apply
A billionaire-only tax at a $1 billion threshold would reach roughly 900 to 1,000 households. The 2% rate would be marginal, meaning it applies only to wealth above the threshold. Someone worth $1.1 billion would owe 2% on the $100 million above the line, not on the full amount. That structure prevents a taxpayer whose net worth fluctuates around $1 billion from facing a huge bill one year and nothing the next.
The taxable base includes everything the household owns. Publicly traded stocks and cash price themselves. Private business stakes get valued using earnings multiples or reference points like recent funding rounds. Real estate gets appraised from comparable sales. Under existing IRS rules used in other contexts, non-publicly-traded assets generally require annual valuation, while real property can rely on a certified independent appraisal valid for up to five years.3Internal Revenue Service. Valuation of Assets – Private Foundation Minimum Investment Return Other Assets
Valuation is where projections meet reality. When someone owns 40% of a private company, the correct value depends on assumptions about growth, discount rates, and comparable transactions that sophisticated taxpayers will contest aggressively. European countries that tried wealth taxes consistently found illiquid-asset valuation to be the single most expensive and contentious administrative burden.
The Constitutional Problem
The largest single obstacle to collecting this revenue is not political. Article I, Section 9 of the Constitution states that “No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census.”4Library of Congress. Article I Section 9 A “direct tax” must be apportioned among the states by population. A state with 10% of the country’s people must provide 10% of the revenue, regardless of how much wealth its residents actually hold.
Apportionment would make a national wealth tax unworkable. California and New York hold disproportionate shares of billionaire wealth relative to population, so a properly apportioned tax would require charging vastly different effective rates in different states to hit the same revenue per capita. The 16th Amendment exempted income taxes from apportionment in 1913, but a wealth tax is not an income tax. It targets what you own, not what you earn.
The Supreme Court had a chance to address this in Moore v. United States, decided in June 2024. The Court upheld a one-time tax on undistributed foreign corporate earnings attributed to American shareholders, but explicitly stated that the ruling does not address “taxes on holdings, wealth, or net worth.”5Supreme Court of the United States. Moore v. United States (06/20/2024) The government itself conceded during oral argument that a tax on net worth “might be considered a tax on property, not income.” Any enacted wealth tax would face an immediate legal challenge, and the question is unresolved.
What Happened in Countries That Tried This
The United States would not be first. Over a dozen European nations once imposed wealth taxes, and most repealed them. Austria, Denmark, and Germany dropped theirs in the 1990s. Finland, Iceland, Luxembourg, and Sweden followed between 2006 and 2007. France held on until 2018.6Tax Foundation. The High Cost of Wealth Taxes The common findings: revenue came in below expectations, administrative costs ran high, and wealthy residents relocated. France’s wealth tax prompted tens of thousands of affluent taxpayers to move, with Belgium alone hosting roughly 63,000 French fiscal emigrants by 2005.
Only a handful of countries still tax net wealth. Norway charges 1% on individual wealth above roughly $153,000, rising to 1.1% above about $1.8 million. Switzerland taxes wealth at the cantonal level with rates and thresholds that vary by location.7Tax Foundation. Wealth Taxes in Europe, 2025 Both set thresholds far below what U.S. proposals envision, spreading the burden across a broader population rather than concentrating it on a few hundred households.
Proponents of a U.S. wealth tax argue that America’s citizenship-based tax system, which reaches citizens regardless of where they live, and the global reach of U.S. financial regulation would make capital flight harder here than in Europe. That argument has some merit, but it has not been tested at the scale a billionaire tax would require.
Whether the IRS Could Actually Collect It
Collecting the projected revenue depends on the IRS being able to see what taxpayers own and value it correctly. Proposals in this space envision new disclosure forms covering domestic and foreign assets, including holdings in trusts and offshore accounts, plus systematic third-party reporting from banks, brokerages, and insurance companies. That would build on the existing FBAR framework, which already requires U.S. persons with foreign financial accounts exceeding $10,000 in aggregate to file annually with FinCEN.8FinCEN.gov. Report Foreign Bank and Financial Accounts
Enforcement capacity is a real question. The IRS received $45.6 billion in new enforcement funding through the Inflation Reduction Act, but Congress clawed back nearly all of it within three years, leaving roughly $300 million in the enforcement account by mid-2025.9Institute on Taxation and Economic Policy. IRS Enforcement Boost Was Supposed to Last 10 Years Congress Killed It in Under Three Administering a wealth tax that requires annual valuation of complex portfolios held by hundreds of the country’s most legally resourced taxpayers would demand substantial new staffing and technical capacity. Whether the revenue estimates hold depends heavily on whether that capacity gets built and sustained. The gap between projected and collected revenue is where the $100 to $150 billion range gets most of its width.