A nationwide, federally regulated wealth cap?


Has anyone ever researched or considered a nationwide, federally regulated wealth cap? I am ABSOLUTELY certain many fiscal conservatives would oppose this idea, but as an effort to more equitably distribute wealth in the United States without using taxation as a method, why don’t we federally cap personally accrued wealth (all assets - real property, financial investments, savings, etc.)? The cap could be extremely high, even towards the $250M point, but one that moves like our federal interest rate. I believe capping individual wealth would force the top 10% to push the almost 60% if the nation’s wealth to a wider consumer base. I understand issues would exist with couples or families who would consolidate their $250M caps, but that would be okay (I foresee that as resulting in more personal issues with which those individuals would have to contend). I also understand that many wealthy would find legal loopholes to put their assets in the name of a company; but, if we know that, we could take steps to minimize or prevent it.


Most economists would start to answer this question by asking a question: what is the objective you have in mind, and why? Specifically, what problem are you trying to solve for which the solution is a wealth cap? Wealth is a stock, of past accumulated income (from labor and capital), much of which has already been taxed under existing tax laws. Yes, the U.S. (and many other countries, including Scandinavian nations) have high wealth inequality but many economists do not see that as a problem in and of itself. The rising inequality is of concern to those who correlate wealth with augmented political power and fret about the impact on democratic institutions, more so if the wealth distribution is widely perceived to be unfair. Others see wealth inequality as an important -- again, possibly unfair -- channel by which economic advantage, opportunities, and affluence are transmitted across generations. If rising wealth inequality is your concern, instead of a cap, the government should consider using wealth taxation, something Thomas Piketty had advocated. Taxation would avoid the sort of cap avoidance issues you raised.

Last updated on
August 21, 2023

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