Everyone who has heard a Democratic politician speak in the last decade has heard the mantra, “We can balance the budget (or fund a pet new social program) if we just make the billionaires pay their fair share of taxes.”
So let’s see what it would look like. Let’s balance the budget―not even taking the extreme of creating and paying for any new social programs―with higher taxes on billionaires. The Congressional Budget Office (CBO) baseline budget predicts a deficit of nearly $1.851 trillion in fiscal year 2026 (which begins October 1, 2025)―without President Donald Trump’s “Big Beautiful Bill” (BBB). Add in the BBB and the CBO says the deficit would increase by nearly $485 billion, bringing the total to $2.335 trillion.
That’s about $17,600 on the national credit card for every one of the 132 million households in America…in one year.
And it’s probably a low estimate. The Tax Foundation puts the increase in the deficit from the BBB a little higher than the CBO, at $542.8 billion with its conventional analysis, which would bring the fiscal 2026 deficit up to about $2.4 trillion. The CBO has been criticized both for its recent overly optimistic projections of low deficits in the past two years as well as its rosy predictions of deficit reduction under President Joe Biden’s Inflation Reduction Act that didn’t materialize.
The reality is that some more income could be extracted through the income tax method without throttling production. The peak of the Laffer Curve in U.S. income taxes is probably somewhere near the 50% range (the current top rate is just shy of 40%); if income taxes are raised higher than that, people start hiding or expatriating their incomes. The percentage of all income taxes paid by the top 0.1 percent of earners actually increased as the nominal tax rates on the rich fell after the 1950s according to left-wing academics Thomas Piketty and Emmanuel Saez, even as the top income tax rate has fluctuated from highs of 90% in the 1950s to lows of 28% in the 1980s.
Piketty and Saez showed that in recent decades, the top 0.1% pays the highest percentage of all income taxes in American history despite much lower nominal rates than the 1950s. There are a number of reasons for this; one is that extortionate tax rates make people decide to expatriate from their country to save their fortunes, as many famous people did from England in the late twentieth century and from France in the early twenty-first century. Another reason is that the wealthy tended in the 1950s to keep their wealth invested in their companies to avoid punishing taxes, only pulling it out when necessary to consume it for themselves. And finally, the 1950s-era of high taxation saw huge loopholes that included massive corporate expense accounts, company cars, and other tokens of personal luxury that were accounted as corporate expenses and not personal purchases.
Let’s assume, however, the very unlikely event that none of the billionaires would expatriate to save their fortunes, and that the federal government can get every last dollar from their wealth in order to close the budget deficit.
According to inequality.org, by “March 18, 2024, the country has 737 billionaires with a combined wealth of $5.529 trillion.” Their numbers were pulled from Forbes’ real time billionaire website. At current deficit levels, this would finance the government deficit for a little over two years. So let’s go down the list of where the government might find this tax revenue from billionaires for the first year, and assess the results, starting with the richest billionaire families.
Elon Musk had $188.5 billion as of March 2024, but has much more now, as his Tesla stock has recovered substantially since that time (from about $195/share to $325 in June 2025), so let’s say seizing all his wealth nets the government $410 billion (which was the Forbes real time billionaire figure in mid-June). Of course, no company can survive if its capital is taken away. So all its employees will be out of a job. The majority of Tesla’s 125,000 employees are U.S.-based, so 70,000 Americans would be out of a job, plus an additional 15,000 employees from Musk’s other companies, including Twitter/X and Space X.
Of course, if it became known that the federal government were coming after Elon Musk’s wealth, the value of Tesla and Space X stock would drop precipitously, because everyone would know these companies would be soon going out of business. And that means getting $410 billion out of Musk is not practical in the real world. But let’s set aside that reality for the purposes of this analysis, and pretend we can liquidate the stock at present value because we have to balance the budget by taxing billionaires.
Next, we move on to seize the Walton family assets, which will net the government $375.7 billion but put 2.1 million WalMart employees out of work, including the 1.6 million who work in the United States.
The government would subsequently move on to seize Jeff Bezos’ $195 billion, plus his ex-wife MacKenzie Scott’s remaining $36 billion in Amazon stock, but Amazon’s 1.6 million employees would be out of job, including the 1.1 million living in the United States.
Liquidation of Mark Zuckerberg’s $242 billion in Facebook stock via taxation would put 74,000 employees on the unemployment line.
The federal government confiscating Larry Ellison $155 billion would net Oracle’s 159,000 employees pink slips.
If Warren Buffet’s $135 billion is seized for taxes from the federal government, it’s worth noting that his Berkshire Hathaway has 392,000 employees, almost all of them Americans. They’d be unemployed as well.
Larry Page and Sergey Brin together have $290 billion through their shares in Google/Alphabet, which employs 183,000, most of whom are U.S.-based.
Steve Ballmer and Bill and Melinda Gates together possess $282.3 billion. Were it collected by the federal government as taxes, that would mean unemployment for Microsoft’s 228,000 employees, of which a little more than half are American-based.
Michael Dell owns $114.80 billion and employs 108,000 at his computer company Dell, of which 41,000 live in the United States.
Michael Bloomberg owns $106 billion and employs 19,000 in North America (out of 20,000 total). Bloomberg has diversified investments, but probably employs the fewest number of people among the top-tier billionaires.
By wiping out the top unlucky twelve billionaire families, this gains the federal government $2.42 trillion, about enough to balance the budget for one year under projections with Trump’s “Big Beautiful Bill.” And we’ve exhausted nearly half the accumulated capital of all America’s billionaires. One side effect of this is that balancing the budget the first year would cost more than 3.4 million jobs among the 168 million U.S. civilian workforce (and about five million globally), raising unemployment in the United States from 4.2% to 6.2%. This means some of those revenue gains would be partially offset with higher spending in the form of more unemployment insurance payments, more welfare, more food stamps, and other social safety net program spending.
Note that none of these projections counts any unemployment from subcontractors, the costs of which would be substantial. But for the purposes of this analysis, let’s assume all Amazon’s subcontractors simply move over seamlessly to sell on Temu, all Microsoft’s suppliers go to Zoho, all Google’s searches get conducted by DuckDuckGo, and all Wal-Mart’s suppliers sell their products at Target instead.
While there are still a handful of American billionaires with lots of money such as the Koch family and the heirs to the Nike footwear and Mars candy fortunes, the further down the food-chain of U.S.-based billionaires you go, the more local and the more U.S.-based their workforce gets. In other words, the further down the tax-man rampages toward the single-digit billionaires, the more unemployment it will create in the United States for the same amount of tax revenue generated.
For example, even those double-digit billionaires at the very bottom of Forbes’ list like Robert Kraft (who owns the New England Patriots) and the family that owns the Reyes Group (a food distribution company) have nearly all their employees in the United States. Going down the list to hunt for tax money is going to hurt more in terms of higher unemployment numbers domestically.
In year two, the deficit will also be much higher, because the federal government will no longer have tax revenue coming in from these previously bankrupted billionaires. Billionaires like Elon Musk are really good at playing the tax avoidance game, but occasionally they do pay big tax bills in the billions of dollars. So it will have to raise an additional few billions to replace the revenue paid in 2025 from these now indigent twelve billionaire families. And again, there’s the matter of an additional 3.4 million American unemployed people no longer paying taxes and likely collecting unemployment benefits.
In theory, the deficit could be closed a second year by wiping out all the remaining billionaires’ fortunes. But then the billionaire cash flow would end, and the nation would at that time have a very high unemployment rate just at the time it killed the geese that laid the golden tax eggs.
But what if the federal government were instead to balance the budget by spreading the tax around evenly among the billionaires rather than hunting them down and bankrupting them one-by-one as explained above? Alternatively, the federal government could take about 45% of all the capital from every one of the 707 billionaires in the United States and balance the budget the first year. Some of their companies might survive this first year with an influx of capital from abroad as foreign vulture capitalists buy up underpriced but profitable U.S. companies. If Washington were able to successfully get foreigners to recapitalize America’s biggest companies, it would probably raise national security concerns if all the big tech firms suddenly start to become foreign-owned, which they would become. But overall, it’s likely to cause even higher unemployment levels and more corporate bankruptcies than the above rampage from the top. Those foreign capitalists would probably be very hesitant to invest, as they would worry about their own assets being seized by the federal government, which had seized the assets of the previous U.S. citizen stockholders.
Ending the deficit with higher taxes on billionaires just won’t work, and there’s no math to show that it could.
Even the center-left agrees that the federal government taxing its way to a balanced budget is impossible. The Peter G. Peterson Foundation noted that maximum tax increases on the rich and working poor alike of “nearly $7 trillion of potential deficit reduction over a decade, it is not sufficient, by itself, to stabilize the debt over the long term.” How could it, in an era of $2 trillion deficits in a year, with a projection of adding $22 trillion (or $26 trillion with the Big Beautiful Bill) to the national debt over the next ten years? Seven can never equal twenty-two or twenty-six. To claim otherwise is to be at war with second-grade mathematics.
Note that this only involves balancing the budget with spending as it currently exists. Adding in national health care or “ending homelessness” or any of a host of leftwing wishlist items would bankrupt the rich and resume larger than ever deficits and total debt accumulation all the faster.
The irony here is not that Democratic politicians will not stop their (admittedly failing) electoral campaign slogans about taxing the rich if they were shown the math on this, a level of math that even a second grader could understand. They know good-and-well the math in their campaign promises doesn’t add up. They know it very well. They’re not stupid; they’re evil. But these slogans get them votes from all the people who don’t do second grade-level math.
America is governed by children, and by children, I mean the voters. They willingly elect congressmen who openly plan for endless deficits and an ever-increasing debt burden without any thought past the next election. Like a father behind on payments on the family home, facing imminent bank foreclosure, congressmen of both parties are like that irresponsible father who refuses to give up the $500/month dance lessons for his daughter and the $7,000 annual vacation in Florida and charges them up on the near-maxxed out credit card for the sake of keeping up outward appearances of solvency and normalcy just a few weeks longer.
But the financial reckoning of a sovereign national debt crisis is coming, and it’s coming good and hard. Even to the voters who don’t do math.
