The Congressional Budget Office has never published a revenue estimate for a federal wealth tax, because no wealth tax bill has advanced far enough through committee to require one. The CBO wealth tax revenue estimates people cite in policy debates actually come from independent budget models — chiefly the Penn Wharton Budget Model and the Tax Policy Center — that apply CBO-style scoring conventions to specific proposals. Those projections run from roughly $2 trillion to nearly $7 trillion over ten years, and the spread is driven almost entirely by the rates and thresholds in each bill and the behavioral assumptions each modeler chooses.
Why There Is No Official CBO Score
The CBO is the nonpartisan agency Congress relies on for budget and economic analysis, and it produces cost estimates for bills approved by full congressional committees.1Congressional Budget Office. Frequently Asked Questions No wealth tax proposal has cleared that threshold, so no CBO score exists.
What the CBO does publish is data on how household wealth is distributed across the population.2Congressional Budget Office. Trends in the Distribution of Family Wealth, 1989 to 2022 That data, together with the Federal Reserve’s Distributional Financial Accounts, feeds the independent models that do the scoring. As of late 2025, the Federal Reserve estimates the top 0.1% of U.S. households hold approximately $25.5 trillion in total wealth.3Federal Reserve. Distribution of Household Wealth in the U.S. Since 1989 That concentration is what makes even low tax rates produce large headline numbers.
The Major Proposals and What Independent Modelers Project
Three proposals dominate the conversation. Each has been scored by at least one independent model using CBO-style conventions, and the numbers vary because the policies vary.
Warren’s Ultra-Millionaire Tax
Senator Elizabeth Warren’s Ultra-Millionaire Tax Act would impose a 2% annual tax on household net worth between $50 million and $1 billion, plus a 3% tax on net worth above $1 billion.4United States Senate. Warren, Jayapal, Boyle Introduce Ultra-Millionaire Tax on Fortunes Over 50 Million The Penn Wharton Budget Model projected the bill would raise $2.1 trillion over ten years under standard CBO scoring conventions. Adding the enhanced IRS enforcement written into the bill — including a minimum 30% audit rate for affected taxpayers — pushed the figure to $2.7 trillion. Once macroeconomic feedback was included, meaning the drag on GDP from reduced savings and investment, the estimate fell back to roughly $2.3 trillion.5Penn Wharton Budget Model. Budgetary and Economic Effects of Senator Elizabeth Warren’s Wealth Tax Legislation
Sanders’ Billionaire Wealth Tax
Senator Bernie Sanders proposed a 5% annual tax on net worth above $1 billion, with a 60% exit tax on anyone who renounces citizenship to escape it. Economists Emmanuel Saez and Gabriel Zucman estimated it would raise $4.4 trillion over a decade, assuming 10% evasion. Other analysts, applying more aggressive behavioral assumptions, arrived at roughly $2.3 trillion. The same policy, scored two ways, produced a $2 trillion gap.
Tax Policy Center’s Higher-Rate Option
A 2025 Tax Policy Center analysis modeled a 5% tax on net worth above $50 million, climbing to 10% above $250 million. The lower threshold and much higher rates produced a projection of $6.8 trillion over the 2025–2034 window, with annual collections rising from about $566 billion in year one to $807 billion by year ten as asset markets grow the base.6Tax Policy Center. Revenue Estimate – Wealth Tax Option
How These Estimates Are Built
Every credible wealth tax projection follows the 10-year scoring framework the CBO uses for legislative cost estimates.1Congressional Budget Office. Frequently Asked Questions Analysts start by estimating the current distribution of household wealth using the Federal Reserve’s Distributional Financial Accounts and the Survey of Consumer Finances.3Federal Reserve. Distribution of Household Wealth in the U.S. Since 1989 They project that wealth forward over ten years, typically assuming it outpaces GDP slightly.
Then they subtract exemptions. If a proposal excludes the first $50 million in net worth, only the excess is taxable. If certain assets are carved out, such as primary residences or retirement accounts, the base shrinks further. Applying the rates to the remaining taxable wealth gives a “static” number — what the tax would raise if nobody changed their behavior.
That static figure is always the highest number in any analysis. Everything after it is a subtraction.
Why the Estimates Differ by Trillions
Three assumptions do most of the work in producing the gap between a $2 trillion projection and a $7 trillion one.
Behavioral Response
When rates rise, wealthy taxpayers rearrange their financial lives. They move assets into trusts, shift into categories that escape the tax base, consume rather than reinvest, or simply report less. Modelers measure this with “tax elasticity” — how much the taxable base shrinks per percentage-point of rate increase.
Penn Wharton uses a semi-elasticity of -13, meaning a one-point increase in the wealth tax rate reduces the taxable base by 13%.5Penn Wharton Budget Model. Budgetary and Economic Effects of Senator Elizabeth Warren’s Wealth Tax Legislation Saez and Zucman assume a much smaller response. The Joint Committee on Taxation has studied elasticity for capital gains and found persistent elasticities around -0.79, meaning a 10% increase in the capital gains rate reduces realizations by about 8%.7Joint Committee on Taxation. New Evidence on the Tax Elasticity of Capital Gains Wealth tax elasticity is likely higher, because holders of large fortunes have more restructuring options than typical capital gains taxpayers do.
Evasion
Saez and Zucman assumed 10% evasion in reaching their $4.4 trillion estimate for the Sanders proposal. Other analysts called that unrealistically low for a tax requiring annual valuation of hard-to-price assets. A 33% evasion assumption — still moderate by international standards — cut the projection to roughly $3.3 trillion. Layering in additional behavioral responses brought it near $2.3 trillion. The evasion assumption alone can swing a projection by more than $1 trillion.
Enforcement Spending
Standard CBO scoring does not credit additional revenue from new enforcement spending, even when a bill funds it directly. Warren’s proposal included $100 billion for IRS enforcement and the 30% minimum audit rate.5Penn Wharton Budget Model. Budgetary and Economic Effects of Senator Elizabeth Warren’s Wealth Tax Legislation Under standard conventions, that enforcement money produces no revenue on the score sheet. When Penn Wharton added it as a non-standard adjustment, the 10-year estimate jumped from $2.1 trillion to $2.7 trillion. Whether that $600 billion counts depends entirely on which scoring convention you accept.
Offsets Against Other Federal Taxes
A new wealth tax does not stack cleanly on top of existing revenue. It cannibalizes some of what the government already collects.
When wealth is taxed directly, less capital is left generating taxable income. Smaller portfolios produce smaller dividends, less interest, and fewer capital gains, all of which would otherwise show up on income tax returns. Penn Wharton’s dynamic estimate captured this: the projection fell from $2.7 trillion to $2.3 trillion once macroeconomic drag and reduced income tax collections were included.5Penn Wharton Budget Model. Budgetary and Economic Effects of Senator Elizabeth Warren’s Wealth Tax Legislation
Estate tax revenue takes a hit too. The federal estate tax applies at a top rate of 40% to wealth transferred at death. A wealth tax chips away at large fortunes during the owner’s lifetime, shrinking the eventual taxable estate. For 2026, the estate tax exemption is expected to drop to approximately $6.5 million per person as the temporary Tax Cuts and Jobs Act increase sunsets at the end of 2025. More estates become theoretically taxable, but the largest ones have already been reduced. Charitable giving is another offset: research on wealth taxes abroad found that a one-point rate increase reduced charitable donations by about 26%, with no offsetting acceleration of gifts.
The Constitutional Asterisk on Every Estimate
Every wealth tax projection carries a risk that most scorers do not price in: the tax may be unconstitutional. The Constitution requires that “direct taxes” be apportioned among the states by population, a requirement that would be effectively impossible to satisfy for a wealth tax, because wealth is not distributed proportionally to population.
Whether a wealth tax counts as a “direct tax” is genuinely unsettled. The Supreme Court has historically limited that category mostly to taxes on real property and per-person capitation taxes, and it has never ruled on a broad-based net worth tax. In Moore v. United States, decided in June 2024, the Court upheld the Mandatory Repatriation Tax 7-2 but explicitly declined to address whether Congress can tax unrealized gains or net worth without apportionment.8Supreme Court of the United States. Moore v. United States, No. 22-800 The majority noted that the government itself conceded a hypothetical tax on holdings or net worth “might be considered a tax on property, not income.” At least four justices signaled that realization of income is a constitutional requirement before taxation, a position that would almost certainly doom a wealth tax.
If Congress passed a wealth tax, legal challenges would likely reach the Supreme Court within a year or two of enactment. A ruling striking it down would zero out projected revenue from that point forward. No major budget model currently incorporates that probability into its central estimate.
What These Numbers Actually Tell You
There is no single CBO-stamped figure for a federal wealth tax. What exists is a range of estimates from credible independent models, all built on the same wealth distribution data the CBO and Federal Reserve produce. A 2% tax on wealth above $50 million with a 3% surtax above $1 billion would likely raise between roughly $2 trillion and $2.7 trillion over a decade, depending on enforcement and dynamic assumptions.5Penn Wharton Budget Model. Budgetary and Economic Effects of Senator Elizabeth Warren’s Wealth Tax Legislation A 5%/10% structure with a lower threshold could reach $6.8 trillion.6Tax Policy Center. Revenue Estimate – Wealth Tax Option Every figure rests on assumptions about avoidance, valuation disputes, enforcement capacity, offsets against existing taxes, and a constitutional question the Supreme Court has pointedly refused to answer. Actual collections would almost certainly fall below the static calculation, and could fall well below even the more cautious dynamic projections, especially in the early years before the IRS builds the machinery to administer the tax.