When AOC, Bernie Sanders, Zohran Mamdani, or any progressive Democrat starts thundering about the rich “not paying their fair share,” notice what they never do: define the number. That claim is a stupid and insulting comment, because by any measure high earners are already paying well in excess of any fair share. They never say what percentage or dollar amount would suddenly make it “fair.” And they certainly never acknowledge the hard data from the Tax Foundation. For tax year 2023, the top 1 percent earned about 20.6 percent of adjusted gross income yet paid 38.4 percent of all federal individual income taxes—an average rate of 26.3 percent, seven times the 3.7 percent rate paid by the bottom half. The top 50 percent shouldered nearly 97 percent of the entire income-tax burden. By any proportional measure, high earners are already paying far more than their “share.” The progressives simply brandish the empty phrase as a moral club and move on.
Since they have absolutely no case that the wealthy are not paying their fair share, they scramble for all kinds of irrational excuses to justify making them pay still more. One way they do that is by demanding taxes on the paper appreciation of assets—unrealized gains—before a single dollar of cash hits anyone’s bank account. That is pure economic nonsense. It is the equivalent of demanding income tax on next month’s paycheck before the employer has paid you, or forcing retirees to hand over taxes on the paper value of their 401(k)s every year whether or not they withdraw a cent. Unrealized gains are not income; they can vanish overnight, create crushing liquidity problems, force asset sales, and require the IRS to value everything from private businesses to illiquid real estate—an administrative nightmare.
European countries have tried similar wealth taxes and have utterly failed—to the point that the taxes have been almost uniformly eliminated. Governments watched people and capital flee their countries to avoid the levies, revenues never hit the promised targets because of that flight and the sheer complications (and outright evasion) of trying to implement the schemes, and the experiments collapsed. No rational tax system treats phantom wealth as taxable income; doing so is simply a Hail Mary grab for revenue to paper over reckless new spending. Cut the spending instead and more capital stays in private hands—capital that gets invested in businesses, creates jobs, and raises wages. Seize it through unrealized-gains taxation and you shrink the very economy that pays everyone’s salaries.
Property rights and economic reality are not optional. You do not owe the government a cut of money you have not yet received, and pretending otherwise is just an attempt to distract from the real problem: politicians who refuse to control their own spending addiction.