The Tax Justice and Economic Fairness Act
- Legislative Pathway: Reconciliation-Eligible (Primary revenue-raising via tax code; passes with 51 Senate votes)
- Goal: To rebuild a tax system where work is taxed less than wealth, where the most successful pay the historical share they paid during America’s most productive decades, and where the federal government has the revenue to fund the foundations that make individual prosperity possible.
Restore Progressive Income Tax Rates
Return the top of the income distribution to the bracket structure that existed during America’s strongest period of broad-based economic growth (1950s-1970s, when top rates were 70-91%).
- 70% top marginal rate on individual income above $10 million (affects approximately 25,000 filers — the top 0.01%)
- 45% bracket on income between $1M and $10M
- Existing brackets preserved for all income below $1M (no tax increase on anyone earning less than $1M)
- Indexed to inflation to prevent bracket creep
- Revenue: $90-150B annually
Tax Capital Income at the Same Rate as Wages
End the structural preference that taxes investment income below the rate paid by salaried workers.
- Capital gains and qualified dividends taxed as ordinary income for income above $1M annually (below $1M, current preferential rates retained)
- Eliminate “carried interest” loophole that lets private equity and hedge fund managers reclassify ordinary compensation as capital gains
- Mark-to-market for ultra-wealthy: Annual taxation of unrealized capital gains for individuals with net worth above $100M (prevents “buy, borrow, die” tax avoidance)
- Step-up basis at death eliminated for estates above $25M (heirs inherit the original cost basis, not a re-zeroed one)
- Revenue: $150-250B annually
Annual Wealth Tax on Net Worth Above $50M
A modest, narrowly-targeted assessment on the largest accumulated fortunes — affecting approximately 75,000 households (0.05% of Americans).
- 2% annual tax on net worth between $50M and $1B
- 3% annual tax on net worth above $1B
- Strong anti-avoidance regime: Look-through to trusts and pass-through entities; reporting requirements modeled on Switzerland and Norway (both have administered wealth taxes successfully for decades)
- Valuation rules: Public equity at market; private equity through standardized valuation tables; art and collectibles above $1M individually appraised
- Exit tax (see below) prevents renunciation-based avoidance
- Revenue: $180-300B annually
Who Pays — and the Mark-to-Market Legal Fallback
Two clarifications are essential to how this provision is understood and how it survives challenge.
- The threshold is $50 million in net worth, and it is absolute. This is a tax on roughly the wealthiest 0.05% of households. A successful doctor, a dentist, a small business owner, a family with a paid-off home and a healthy retirement account — all are completely exempt. Nothing in this provision touches net worth below $50M. The tax reaches only accumulated fortunes an order of magnitude beyond what ordinary professional success produces.
- Mark-to-Market is the built-in fallback if a direct wealth tax is struck down. A flat tax on net worth sits on contested constitutional ground (the apportionment question under Pollock; see Constitutional Authority below). If the courts strike it, the framework does not lose the revenue — it shifts to Mark-to-Market taxation: taxing the annual unrealized gain of ultra-wealthy investment portfolios as income under the Sixteenth Amendment. This directly closes the “buy, borrow, die” loophole, in which billionaires borrow against perpetually-appreciating stock to fund their lives without ever realizing a taxable gain. Mark-to-Market reaches the same fortunes, raises comparable revenue, and rests on the firmer footing of the income-tax power — making it both a complement to and a legal insurance policy for the wealth tax.
Estate Tax Restoration
Reverse the systematic erosion of the estate tax that has created the conditions for dynastic concentration of wealth.
- Exemption lowered to $3.5M per individual / $7M per couple (still protects 99%+ of estates, including middle-class inheritances and family farms)
- Top rate raised to 65% (historical level from 1941-1976)
- Close dynasty trust loopholes: Generation-Skipping Transfer Tax rules tightened; perpetual trusts disallowed for new transfers
- Family farm and small business protections retained: Existing § 2032A and § 6166 provisions strengthened, not weakened
- Revenue: $30-70B annually
Financial Transaction Tax
A small fee on Wall Street trading that raises substantial revenue while reducing speculation-driven volatility.
- 0.1% tax on stock and bond trades
- 0.01% tax on derivatives
- Modeled on UK Stamp Duty (in effect since 1694; the City of London remains a global financial center)
- Minimal impact on long-term investors: A typical 401(k) holder pays under $10 per year; high-frequency traders pay the bulk
- Retirement account exemption for buy-and-hold transactions in 401(k)s and IRAs
- Revenue: $60-100B annually
Close Corporate Tax Loopholes
Reverse the systematic erosion of the corporate income tax base.
- 15% global minimum tax on multinationals (matching OECD pillar 2 framework)
- Limit interest deductibility for private equity-acquired firms to prevent debt-funded extraction
- End the offshore intangible income loophole (GILTI strengthened; FDII repealed)
- Stock buyback excise tax raised from 1% to 4% to incentivize productive reinvestment over financial engineering
- Reverse the 2017 corporate rate cut partially: 28% statutory rate (was 21%, was historically 35%)
- Revenue: $100-200B annually
Social Security Solvency Through Lifting the Wage Cap
Restore Social Security to long-term solvency without benefit cuts or eligibility-age increases.
- Apply the 12.4% Social Security payroll tax to all earned income (currently capped at ~$168K, meaning a hedge fund manager pays the same Social Security tax as a teacher earning $168K)
- Phase-out donut hole between $168K and $400K to honor existing political commitments
- Wage cap elimination above $400K
- Trust fund solvency extended by 75+ years per SSA actuarial analysis
- Revenue: $120B annually (dedicated to Social Security Trust Fund)
Sovereign Wealth Exit Tax
Prevent capital flight as wealthy individuals attempt to avoid the wealth tax through citizenship renunciation.
- 40% exit tax on global assets for any individual renouncing U.S. citizenship with net worth above $50M
- Look-back rule: Applies retroactively to renunciations within 5 years of the wealth tax’s effective date
- Sanctions on foreign financial institutions that knowingly shelter U.S. capital from these provisions: loss of access to U.S. dollar clearing
- Modeled on existing § 877A expatriation tax, with a substantially higher rate for ultra-wealthy renouncers
- Revenue: protective; designed to make avoidance uneconomic rather than to be paid
Constitutional Authority
Article I, Section 8, Clause 1 (Taxing and Spending Clause — broad and well-settled federal authority to levy and collect taxes); Sixteenth Amendment (income tax, including capital income, ratified 1913); the wealth tax sits on contested ground — the Pollock v. Farmers’ Loan & Trust Co. (1895) precedent on direct taxation has been substantially superseded by the 16th Amendment, but the matter is not fully resolved and the wealth tax provisions are designed to also be structured as an income tax on imputed returns (“Mark-to-Market”) as a constitutional backup. Recent scholarship (Saez, Zucman, Eisinger, Avi-Yonah) and Moore v. United States (2024) suggest broad constitutional headroom. Financial transaction tax: Commerce Clause and Taxing Power, both well-established.
Rationale
America had a strong middle class and the fastest broad-based economic growth in its history during the era of high top tax rates (1950s-1970s). Returning the top of the income distribution to a fair contribution is not radical — it is restoration. The systematic shift since 1980 has moved the tax burden off of capital owners and onto labor income, off of corporations and onto households, off of the wealthy and onto the working and middle classes. This Act reverses that drift. It is not a tax increase on most Americans — the bottom 99% pays the same or less. It is a tax increase on a small population that has captured an outsized share of national income for four decades. The revenue funds the Foundations of the mandate: healthcare, education, infrastructure, accountability. Without it, those Foundations cannot be sustained.
Implementation Timeline
- Year 1, Q1: Income tax rate changes effective; carried interest loophole closed; corporate rate changes effective
- Year 1, Q2: Capital gains rules updated; mark-to-market regime for ultra-wealthy implemented; estate tax restoration effective
- Year 1, Q3: Social Security wage cap phase-out begins
- Year 1, Q4: Financial transaction tax effective
- Year 2, Q1: Wealth tax effective (with one-year IRS implementation runway); exit tax provisions effective
- Year 2-5: IRS enforcement capacity scaled up (see related provisions in Government Transparency Act); valuation rules refined; international coordination on global minimum tax
Fiscal Impact
Total new revenue: $730B-$1.19T annually at full implementation. Breakdown by provision:
- Progressive income brackets: $90-150B
- Capital income parity: $150-250B
- Wealth tax: $180-300B
- Estate tax restoration: $30-70B
- Financial transaction tax: $60-100B
- Corporate loophole closures: $100-200B
- Social Security wage cap: $120B (dedicated to Trust Fund)
- Exit tax: revenue-protective
Administrative cost: $8-12B annually (primarily IRS modernization and enforcement capacity rebuild). Net revenue: $720B-$1.18T annually. This revenue substantially funds the Twelve Acts agenda while still allowing for deficit reduction. Source assumptions: Joint Committee on Taxation scoring conventions, CBO dynamic scoring where applicable, Saez-Zucman wealth tax revenue estimates.
Political Considerations
This Act will be the most fiercely contested provision in the entire mandate — the population affected is small but extraordinarily resourced. Frame as: restoring the tax structure under which America had its strongest period of broad-based growth; ending the two-tier tax system where billionaires pay lower rates than their secretaries; closing loopholes that no one defends on the merits. Polling: 60-75% support for higher taxes on incomes above $1M; 70-80% support for closing corporate loopholes; 65-70% support for a wealth tax on fortunes above $50M (Gallup, Pew, CBS/YouGov, 2020-2025). Counter the “capital flight” argument empirically: actual cross-border wealth migration in response to tax changes is far smaller than predicted by tax-avoidance industry models. Counter the “this hurts the economy” argument with the historical record of 1950s-1970s growth under much higher top rates. The strongest political vulnerability is administrative complexity of the wealth tax — invest seriously in IRS capacity to administer it.