Eliminating an Escape Velocity: Ending Unending Accumulation

How We Got Here | The Design | Escape Velocity | Broad Prosperity

In physics, escape velocity is the speed at which an object breaks free from gravity permanently. Below it, what goes up comes back down. Above it, the object leaves orbit and never returns. A handful of American fortunes have reached escape velocity. They have grown so large that no ordinary force — income taxes, market corrections, generational spending, even philanthropy — pulls them back. They compound beyond the reach of the society that generated them, while that society cannot fund childcare, healthcare through the middle class, or tuition at its own public universities.

The existing tax code cannot reach fortunes at this scale, and whether the Constitution even permits a tax that can is an open legal question that scholars actively disagree about. Rather than design around the ambiguity and risk a vacillating Supreme Court striking the tax down after implementation, the more durable path is a constitutional amendment. The income tax required the Sixteenth Amendment to settle the question permanently; a wealth tax deserves the same foundation.

A constitutional amendment is a high bar, and it should be. Constitutional change demands broad consensus that the status quo has failed. The case made here is that it has: five decades of tax policy have produced wealth concentration at a scale the founders could not have imagined, and every existing instrument — income taxes, capital gains taxes, estate taxes — has a structural gap that the ultra-wealthy can legally exploit.

The response needed to prevent individuals from escaping society need not be radical or draconian. The wealthy stay wealthy. No one’s fortune is seized or capped by decree. A marginal wealth tax, structured the way Americans already accept for income, would tether the largest fortunes back to the society they’ve outgrown — asking the wealthiest 0.08% of households to contribute a modest share of growth above thresholds most people would consider unimaginable. In return, every American family would see measurable improvements: affordable care from birth through kindergarten, healthcare that does not bankrupt a household, and a public college education within reach without mortgage-scale debt.

I grew up in a Republican household in the 1980s. Milton Friedman was something close to a saint. The argument I absorbed was that focusing on the wealthy was prurient: their fortunes, however large, were not meaningful relative to the scale of the national economy, and taxing them more aggressively would cost more in distortion than it gained in revenue. That argument may have been right in 1985. Forty years later, the numbers have changed by orders of magnitude, and the argument no longer holds.

How We Got Here, and Why Income Tax Can’t Fix It

In 1960, the top marginal federal income tax rate was 91%. By 1988, after the Reagan cuts, it had fallen to 28%. It has never fully recovered, settling in the 37–39% range today. Over the same 50 years, capital gains rates were cut, estate tax exemptions were repeatedly raised, and corporate tax rates were slashed from 35% to 21%. The result is five decades of tax policy choices that consistently reduced friction on accumulation at the top.

The United States now has the most concentrated wealth distribution among peer nations. The top 1% hold roughly 30% of all wealth; the top 0.1% hold more than the bottom 80% combined. Much of the wealth created during those five decades reflects genuine innovation. Bezos built a logistics network that reshaped commerce. Huang built the chip architecture behind the AI revolution. But the tax code amplified those gains disproportionately at the top, steadily reducing friction on accumulation while leaving wages and ordinary income largely unchanged. The question is whether the system that lets wealth compound indefinitely, untaxed, serves the country that made those fortunes possible.

The standard political response is to raise income tax rates. Income taxes capture new earnings. They do not touch the existing mountain. Someone who holds $50 billion in appreciated stock pays no tax on that stock until they sell it. The wealth that already exists operates by different physics than the wages the income tax was designed to capture. Adjusting rates on paychecks cannot correct a 50-year accumulation of undertaxed wealth.

Adjusting rates on paychecks cannot correct a 50-year accumulation of undertaxed wealth.

Even the income that does get taxed at the top receives preferential treatment. Long-term capital gains and carried interest are taxed at roughly 20-24%, against a top ordinary income rate of 37%. The gap was designed in part to encourage capital investment, a defensible goal. For the very wealthy, whose income arrives almost entirely as returns on capital rather than wages, the preferential rate is the ballgame.

And for those with the largest fortunes, even the preferential capital gains rate can be avoided entirely. The strategy is straightforward: borrow against your assets rather than sell them. A person with $10 billion in stock can take out a $500 million loan from a bank using the stock as collateral, spend the proceeds freely, and owe no income tax, because borrowed money is not income. The loan accrues interest, which is often deductible, effectively routing what would have been a tax payment to a bank instead. The underlying stock continues to appreciate untaxed. At death, the stepped-up basis provision resets the asset’s cost basis to its current market value, wiping out decades of embedded capital gains permanently. The loan gets repaid from the estate, the tax bill disappears, and the wealth transfers to the next generation having never been meaningfully taxed at any point. This strategy, sometimes called “buy, borrow, die,” is available only to those whose assets are large enough to serve as collateral at scale.

There is a deeper structural point beneath the avoidance strategies. Once typical annual returns on wealth exceed what any person could plausibly spend, wealth grows exponentially. A $100 billion fortune generating 7% real returns produces $7 billion per year — far more than the most extravagant lifestyle could consume. The surplus compounds. Income taxes, even if fully enforced, can only capture a fraction of the annual return. They cannot touch the principal, and they cannot prevent the exponential growth of the surplus that no one spends. A tax on the stock of wealth is the only instrument that addresses accumulation directly, rather than waiting for a realization event that may never come.

The United States ranks near the bottom of wealthy nations on child mortality, maternal mortality, healthcare access, and life expectancy. The U.S. spends more per capita on healthcare than any peer nation and gets worse outcomes, so inefficiency is part of the story. But U.S. GDP per capita exceeds that of Germany, France, and the United Kingdom. The country is not too poor to fund these things. It has, through its fiscal choices over 50 years, decided where resources accumulate.

In the late 1980s, I traveled through Asia as a young teenager. I saw leper colonies in Macau, garbage cities outside Manila where children collected scrap to survive, opium-addicted men stumbling through villages near Chiang Rai. Even at that age, the lesson was visceral: human development is not guaranteed, and its absence is grotesque. As the United States has seen actual regressions in development indicators, not just relative declines against peer nations but absolute deterioration in life expectancy and maternal mortality, it is worth remembering that there is no floor to how difficult life can become. A wealthy country that allows preventable suffering has made a choice, not encountered an inevitability.

Individual fortunes have grown large enough to rival the budgets of nation-states. A person with $300 billion can outspend most national governments on almost any discrete objective. Some of this spending produces genuine public goods. But nation-state-scale power, wielded by private individuals without electoral accountability or constitutional constraint, poses a structural threat to democratic governance. The question is whether we want democratic institutions to remain the dominant locus of collective decision-making, and if so, what tools are available to preserve that balance.

Nation-state-scale power, wielded by private individuals without electoral accountability or constitutional constraint.

The argument is not against success. It is about what happens at a scale where success becomes structural power, and about the fact that the income tax does not reach accumulated, untaxed wealth. A well-designed wealth tax can address what the income tax cannot. The design matters enormously.

The Design: Ratios and Marginal Rates

Every major wealth tax proposal sets its thresholds in dollars. Elizabeth Warren proposed 2% on wealth above $50 million. Bernie Sanders proposed a schedule beginning at 1% above $32 million. European wealth taxes, in France, Spain, Norway, and Switzerland, state their brackets in local currency, occasionally adjusted for inflation. These are not unreasonable starting points, but they share a conceptual problem: they are anchored to nothing morally meaningful. Why $50 million? Why not $40 million or $80 million? The number is chosen because it sounds like a lot. A decade later it may sound different, and the political fight starts over.

Instead of asking how many dollars is too many, ask: at what multiple of what a typical person earns does wealth become extraordinary? Using current U.S. median household income of roughly $83,000, four thresholds emerge naturally at round multiples: 1,000×, 10,000×, 100,000×, and 1,000,000×. At the first threshold, $83 million, a single household holds as much wealth as 1,000 median families earn in a year. At the last, $83 billion, one person’s fortune equals the combined annual income of a million households.

Most people, including those skeptical of wealth taxes, find it genuinely difficult to argue that 1,000 times median household income is an unfair place to begin a conversation about limits. The ratio framing invites the reader to locate their own moral intuition rather than argue about an abstract dollar amount. And unlike fixed dollar figures, the thresholds update automatically. When median income rises because wages grow broadly, every threshold rises too. The brackets only tighten when extreme wealth outpaces broad-based growth, which is precisely the scenario the tax is designed to address. A CPI peg says: keep up with prices. A median-income peg says: keep up with the typical person.

The thresholds tell you who pays. The marginal structure tells you how much. The most persistent misconception about progressive taxes is that crossing a higher bracket taxes everything you own at the higher rate. That is not how this works, and it is not how U.S. income tax brackets have ever worked. You only pay the higher rate on the slice of wealth above each threshold, never on what lies below it.

Even at extreme scale, the effective rate — total annual tax as a share of total wealth — rises slowly:

A person with $100 million, a fortune that places them among the wealthiest humans who have ever lived, pays less than 0.2% of their wealth per year. A person with $10 billion pays roughly 2.4 cents on every dollar annually. Even at $100 billion, an amount that exceeds the GDP of most countries, the effective rate is 5.59%. That is lower than the combined income and payroll tax burden carried by most middle-class workers on their wages. This structure is identical in form to the U.S. income tax as it has operated since 1913. The only change is the base: wealth instead of annual income.

The top bracket is smaller than the roster of a major league baseball organization.

Across all four taxable brackets combined, this tax touches fewer than 100,000 households out of approximately 131 million, roughly 0.08% of all US households. Each bracket is smaller than the last by roughly an order of magnitude: from tens of thousands, to hundreds, to dozens, to 14. The top bracket is smaller than the roster of a major league baseball organization. Everyone else pays nothing.

Tethering Fortunes to Society

The largest fortunes consist overwhelmingly of unrealized gains in founder equity and concentrated stock positions. As described earlier, through borrowing against assets and stepped-up basis at death, the owners of these fortunes pay little or no tax on the appreciation. Their effective existing tax rate is close to zero. The wealth tax would be the first instrument that actually touches the annual appreciation of those fortunes.

Above the top threshold of $83 billion, the marginal wealth tax rate is 10% per year. The S&P 500 has delivered roughly 7% real returns over the long run. At 7%, the 10% tax outpaces the return: wealth above the threshold shrinks rather than grows, and the fortune moves toward $83 billion rather than away from it. The implied long-run ceiling for a purely passive investor is roughly $277 billion, or about 3.3 million times the median household income. Concentrated positions can generate higher returns in bursts, pushing the ceiling higher, but few sustain returns above 10% for decades. Without the tax, there is no ceiling at all.

A passive investor would see their fortune converge toward $277 billion, about 3.3 million times the median income, and stop growing.

The tax at this scale comes entirely out of accumulation, never out of consumption. Even an extraordinarily lavish personal lifestyle, multiple estates, a private jet, a yacht, full household staff, serious art collecting, tops out around $200–500 million per year. On a $150 billion fortune, that is 0.1–0.3% of wealth. On Musk’s $839 billion, it is effectively zero. Personal spending at these levels is a rounding error on the fortune. Meanwhile, passive returns on that same $839 billion at 7% real generate roughly $59 billion per year, more than 100 times the most extravagant imaginable burn rate. Even at the lower end of the top bracket, a $100 billion fortune generates roughly $7 billion per year in passive returns, more than 20 times the most extravagant burn rate. The tax is the tether. It slows the rate at which the fortune pulls away from the society beneath it.

A $100 billion fortune generates roughly $7 billion per year in passive returns, more than 20 times the most lavish personal spending imaginable.

Wealth taxes are difficult to enforce on illiquid assets, and the ultra-wealthy have legal structures designed to reduce measured net wealth through valuation games, entity structures, and debt overlays. The enforcement challenge applies to any wealth tax, not just this one. The median-income peg does not solve enforcement, but a tax justified by a transparent ratio is harder to quietly dismantle in committee than one justified by an arbitrary dollar figure. And the bracket is not abstract. There are 14 people in it.

How This Compares to Other Proposals

Elizabeth Warren proposed 2% on wealth above $50 million, later revised to 6%. Bernie Sanders proposed a graduated schedule from 1% above $32 million to 8% above $10 billion. Senator Ron Wyden tried a different mechanism entirely: marking tradeable assets to market annually and taxing appreciation as ordinary income, sidestepping the constitutional question of whether a wealth tax is a “direct tax” requiring apportionment. All three proposals used fixed nominal dollar thresholds. None passed. Warren and Sanders never received a committee vote. Wyden’s was dropped from the Build Back Better Act after opposition from moderate Senate Democrats.

In Europe, capital flight has been the central lesson. France’s wealth tax at 0.5–1.5% above €800,000 lost an estimated half its revenue to emigration. Norway raised its rate from 0.85% to 1.1% and 30 billionaires left in a single year, costing more in lost revenue than the rate hike was projected to generate.

Where This Proposal Differs

The American and European proposals described above share a vulnerability: fixed dollar thresholds require repeated legislative adjustment, and every adjustment reopens the political fight. The Alternative Minimum Tax is the cautionary tale. Designed in 1969 to catch 155 wealthy households paying zero federal income tax, its fixed thresholds were never indexed to inflation. By the 2000s the AMT was hitting millions of middle-class families, requiring an annual Congressional “patch” that became its own partisan battle. Congress finally indexed the AMT to inflation in 2013 — 44 years late. Warren’s $50 million threshold would face the same drift. A decade of inflation and the political argument shifts from “should we tax the ultra-wealthy” to “who counts as ultra-wealthy,” and the policy intent dissolves into threshold politics.

The median-income peg eliminates this failure mode. Thresholds adjust automatically, and the adjustment tracks the typical person rather than prices. The political argument never needs to be relitigated because the brackets are defined by a ratio, not a number.

The rate structure also addresses the European failures differently than the American proposals. Warren at 6% and Sanders at 8% apply high rates deep into the wealth distribution — above $1 billion and $10 billion respectively. France and Norway demonstrated that rates above 1–1.5% applied broadly produce capital flight that erodes revenue. This proposal applies its highest rate, 10%, only above $83 billion — a threshold so high that 14 people in the United States reach it. The emigration calculus for 14 individuals is fundamentally different from the calculus for 10,000 French millionaires. The U.S. citizenship-based tax system, unique among major economies, means a U.S. citizen cannot escape the tax by moving abroad without renouncing citizenship and paying an exit charge. Below the top bracket, rates of 1–5% are close enough to typical asset returns that they can be paid from income rather than principal — the same calibration that makes Switzerland’s wealth tax durable.

As discussed in the introduction, the constitutional question is unresolved. Wyden’s mark-to-market approach was designed specifically to sidestep the direct-tax clause by structuring the levy as an income tax. This proposal does not have that advantage. A constitutional amendment, as argued above, is the more durable path — it settles the question permanently rather than leaving it to the shifting composition of the Supreme Court.

The Fortunes That Achieved Escape Velocity

According to the Forbes 2026 Billionaires List, 14 US-based individuals currently sit above the $83 billion threshold. Their combined wealth exceeds $3.6 trillion.

The Giving Pledge, co-founded by Warren Buffett and Bill Gates in 2010, invited the world’s wealthiest to commit the majority of their wealth to philanthropy. Fifteen years on, only 9 of its 256 signatories have actually given away half their wealth. The collective net worth of the original US signers has grown 166% in inflation-adjusted terms since they signed, compounding far faster than they have given. Total documented giving by all pledgers over 15 years came to roughly $206 billion, well below the $600 billion originally projected.

Across all 14 people, estimated annual giving totals roughly $12.6 billion. The annual wealth tax on the same group would total roughly $245 billion: about 19 times more. Buffett and Bloomberg are the genuine exceptions, each giving around $4 billion a year. But even Bloomberg, the most generous in this group as a share of wealth, gives roughly 3.7% of his fortune annually against a tax bill of $6.5 billion. Buffett’s $4 billion in annual giving is about 38% of his $10.5 billion tax bill. For everyone else, the gap is far wider. Most give less than 1% of their wealth per year, and several of those figures are inflated by structures that keep assets under donor control.

Musk’s foundation gave a record $474 million in 2024, against a fortune of $839 billion: roughly 0.056% of his wealth. A Chronicle of Philanthropy investigation found that most of those grants went to entities Musk himself controls. Zuckerberg’s 2015 pledge of 99% of his Facebook shares was structured as a transfer to an LLC he controls entirely, not a donation to charity; the vehicle can lobby, invest for profit, and spend on advocacy with no public disclosure requirements. The Walton heirs explicitly declined to sign the Giving Pledge; their combined personal giving amounts to roughly 0.04% of their wealth per year.

Musk has on multiple occasions publicly offered to personally fund entire branches of the federal government during budget impasses, most recently offering to cover TSA operations to prevent a funding-related service disruption. The TSA runs on a budget of roughly $10 billion per year. Musk’s annual wealth tax bill under this proposal would be $79.5 billion, enough to fund the TSA nearly eight times over, every year, from his tax payment alone. When an individual can make such an offer as a casual gesture, the concentration of wealth has reached a scale that raises structural questions about democratic governance. But the offer itself reveals the deeper problem. A government program that depends on a single person’s willingness to fund it is no longer a government program. It is a personal fief. The employees answer to the budget. The budget answers to the donor. The donor answers to no one. Taking Musk up on the offer is a surrender.

A program that depends on one person’s willingness to fund it is no longer a government program.

There is a deeper issue with the philanthropy argument. Even generous, well-directed charitable giving is unilateral. It reflects the priorities of the donor, not the priorities of the public. A billionaire who funds charter schools, climate research, or art museums is making decisions about public goods without public accountability, and without the possibility of being voted out. Government programs have their own inefficiencies, and those inefficiencies are real. But government programs can be reformed, redirected, or eliminated by the people the programs serve. A private foundation cannot. Tax revenue, for all its waste, is ultimately answerable to voters in a way that philanthropic priorities never are.

Tax revenue is ultimately answerable to voters in a way philanthropy never is.

The question is not only whether the wealthy give enough but whether unilateral private decisions about public goods are a sound substitute for democratic ones. Philanthropy at its best supplements democratic decision-making. Philanthropy does not replace it.

How This Ends Without Intervention

Exponential growth in a finite system cannot continue indefinitely. Something always breaks to limit it. Wealth that compounds faster than the economy that contains it is no exception.

The pace of concentration is not abstract. In 2000, zero Americans had a fortune above $100 billion. Today, 14 do, and their combined $3.6 trillion exceeds the wealth of the other 886 American billionaires combined. A new category — hectobillionaires — emerged from nothing in 25 years and already dominates the billionaire class itself. Over that same period, the top 10 fortunes grew roughly 10x while total US household wealth grew roughly 4x. The largest fortunes are pulling away not just from ordinary Americans but from other billionaires, because at this scale the annual returns so far exceed any possible consumption that the surplus compounds without friction.

If neither voluntary philanthropy nor existing tax policy provides the constraint, the constraint will come from somewhere else. Every society that has allowed extreme inequality to compound without a corrective mechanism has resolved it eventually. The resolutions have not been orderly. There are four recognizable patterns.

The question is not whether the current concentration resolves. It is how.

The first is entrenchment. As life-extension technologies, private security, private infrastructure, and control over information systems mature, extreme wealth can translate into something approaching permanent dynastic power. The ultra-wealthy gradually separate from shared institutions: private healthcare, private schooling, private security, and over time, private governance structures. The rest of the population exists in a different civilization, adjacent but subordinate, with diminishing recourse to institutions that were designed for a world where the wealthiest person in the room was still recognizably a citizen. This is not science fiction. The purchase of major media platforms, the construction of private space programs and private towns, the funding of longevity research aimed squarely at extending the lives of those who can afford it: these are early-stage versions of the same dynamic. The endpoint, followed long enough, is a two-civilization society in which democratic institutions govern one of them and are largely irrelevant to the other.

The second is seizure. When democratic institutions become visibly unable to address extreme inequality, the political space opens for leaders who promise to take it by force. Putin’s Russia offers the recent model: oligarchs were offered a choice between loyalty and prison, their assets redirected to the state and its allies rather than to the public. Xi Jinping’s management of Jack Ma, Alibaba, and the broader Chinese tech sector in the early 2020s is another version: regulatory campaigns that were, functionally, negotiations over who controls what. The wealth gets redistributed, but to the strongman and his apparatus, not to the people the inequality was supposed to harm. The rule of law collapses. The wealthy lose their fortunes not through a transparent legal process but through confiscation at the discretion of whoever holds power, and everyone else loses their political rights in the same transaction.

The third is sclerosis. Concentrated wealth does not need to build a parallel civilization or seize the state outright. It can simply corrupt the existing one slowly enough that no single moment triggers a response. Entrenched interests fund campaigns, staff regulatory agencies, and shape legislation until the democratic process still exists formally but no longer produces policy that reflects the public interest. Innovation slows because incumbents use political influence to protect market positions rather than compete. Public investment in education, infrastructure, and research declines because the people who benefit most from those investments have no political voice proportionate to their numbers, while the people who would pay for them have outsized influence to prevent it. The country does not collapse. It falls behind. Other nations that invest broadly in human capital out-innovate and out-produce. Spain after the gold influx, the Ottoman Empire in its late centuries, and Argentina’s long decline from one of the world’s wealthiest nations all followed versions of this pattern: enormous resources at the top, declining national capacity underneath, and a political system too captured to correct course.

The fourth is revolt. The French Revolution, the Bolshevik seizure of Russia, and numerous 20th-century nationalizations share a common dynamic: inequality becomes visible and intolerable, institutional channels for redress fail or are captured, and the result is radical redistribution by force. These episodes tend to be chaotic and destructive. They eliminate wealth faster than they distribute it. The societies that emerge from them typically spend generations rebuilding, often under the authoritarian governments that revolutions tend to produce. The people who suffer most are rarely the very wealthy, who have time to move assets and people across borders. They are the middle and working classes caught in the transition.

A rational wealth tax of the kind described here is a transparent, marginal claim on fortunes that have grown beyond any democratic mandate to accumulate, applied through the same legal machinery that Americans already accept for their income. It asks the top 0.08% to contribute a modest share of the growth above a threshold most people would already consider unimaginable. It preserves the wealth, the incentives, and the legal framework. The wealthy stay wealthy. Democracy stays functional. And the resources exist to keep children alive and parents supported and workers prepared for whatever the economy becomes next.

The alternative is not the status quo maintained indefinitely. Wealth at this scale accumulates its own momentum, its own political gravity, its own capacity to reshape the institutions meant to constrain it. The question is not whether the current concentration resolves. It is how.

Creating Broad Prosperity

The median-income peg does more than set thresholds. It creates a built-in incentive for the ultra-wealthy to support broad wage growth, embedded in the arithmetic of the tax itself.

When thresholds are defined as multiples of median income, the untaxed wealth base expands as median income rises. Someone holding $100 billion today faces the top marginal rate on the $17 billion above the $83 billion threshold. If median income rises to $100,000, the top threshold moves to $100 billion, and their annual tax bill drops substantially. That is a direct financial incentive, for people with large fortunes and significant political influence, to favor policies that raise typical workers’ incomes rather than policies that merely inflate asset prices.

The alignment extends all the way to the wage floor. Median household income is roughly 2.5–3 times what two full-time minimum wage earners bring home, a ratio that has held across decades. If minimum wage rises, median income tends to follow, the thresholds rise, and the tax becomes more generous to the wealthy. The people with the largest fortunes acquire a direct financial interest in the wages paid to the people at the bottom — not out of charity, but because the median sets the thresholds that determine how much of their wealth is taxed.

The next few decades sharpen the stakes. Automation and AI are reshaping labor markets at a pace with no modern precedent. If productivity gains compress median wages, the thresholds drop and the ultra-wealthy pay more. If productivity gains flow broadly through higher wages and new job categories, the thresholds rise and the ultra-wealthy pay less. The peg encodes a direct financial stake in getting the transition right.

The tax funds the programs, the programs raise the median, the median raises the thresholds.

What This Actually Pays For

The top 14 individuals in the highest bracket alone account for roughly $245 billion in annual tax. Adding the hundreds of households in the lower brackets brings the total to an estimated $500–$700 billion per year. That is not a rounding error in the federal budget — it is comparable to the entire annual cost of Medicaid, generated by fewer than 100,000 households out of 131 million. What it could fund follows almost directly from the structure of the tax itself: invest in the conditions that raise median household income, because those are exactly the conditions that make the tax’s own thresholds more generous.

Birth-to-K Childcare

Childcare is the dominant labor-force constraint for parents of young children, and particularly for mothers. The United States spends less public money on early childhood care and education, as a share of GDP, than almost any other wealthy democracy. The result is a system in which full-time infant care in a major metropolitan area costs $25,000–$40,000 per year, more than in-state university tuition in most states. Families faced with that cost either pay it and sacrifice savings, or have one parent exit the workforce at precisely the moment that matters most for long-run financial security. Either way, the economy loses.

A federal program delivering free or heavily subsidized childcare from birth through kindergarten-entry, with copays scaled to income, would cost roughly $120–$150 billion per year. Countries that have built comparable systems, including France, Sweden, and Denmark, find that increased labor-force participation, higher lifetime earnings for parents, and better developmental outcomes for children generate long-run fiscal returns that substantially offset the cost. The obstacle was never cost. No tax in the current code reaches accumulated wealth rather than wages. This proposal does.

Healthcare Subsidies Through the Middle

Healthcare costs are the dominant balance-sheet risk for non-wealthy American households. Even those with employer-sponsored insurance face deductibles, out-of-pocket maximums, and premium contributions that can total $10,000–$20,000 in a bad year. The Affordable Care Act provides subsidies up to 300% of the federal poverty level, but the coverage is incomplete and the cliff effects at income thresholds create perverse incentives. A household earning one and a half times the median income often faces higher healthcare costs, as a share of income, than one earning three times as much. That is a design defect.

A program delivering near-zero premiums for households at or below median income, with a taper rather than a cliff up to roughly twice the median, would cost $150–$200 billion per year in incremental federal expenditure. The program is, essentially, Medicaid-level generosity extended upward to the median, delivered through an expanded ACA or a Medicare buy-in. It removes the fear that a single serious illness consumes years of savings, eliminates job lock for workers staying in positions they dislike solely to keep coverage, and reduces the precautionary saving drag that healthcare uncertainty imposes on ordinary households.

Tuition-Free Public College

The United States now carries more than $1.7 trillion in outstanding student loan debt, the largest such burden in the world and one that is almost entirely a phenomenon of the last three decades. A generation has been asked to borrow mortgage-scale sums before earning their first professional paycheck, then repay those sums during precisely the years when they would otherwise be buying homes, starting families, and building savings. The result is a system that taxes the aspiration to be educated, and taxes it most heavily on families without the wealth to absorb it. In peer countries, public universities charge little or nothing in tuition. The U.S. has treated higher education as a private investment to be financed individually, then expressed surprise that the debt has distorted household formation and wealth accumulation for millions. Community colleges, scholarships, and work-study programs provide real paths that millions of students use. But the system as a whole has shifted a generation’s education costs onto that generation before they earn the income the degree is meant to unlock.

Eliminating tuition at public two- and four-year colleges, covering instruction but not room and board, would cost $70–$90 billion per year, the third-largest item in this portfolio and the smallest of the three major programs. The returns are well-documented: higher educational attainment, greater occupational mobility, higher lifetime earnings, and stronger tax receipts from a more productive workforce. A college degree no longer guarantees a good outcome, but its absence increasingly forecloses one. A society that prices out the bottom half of its income distribution from that credential and then wonders why social mobility has stalled is missing a policy.

Universal Pre-K

The research on early childhood education is among the most consistent in the social sciences. Studies of targeted programs like the Perry Preschool Project and the Abecedarian Program find returns of 7–12% per year of investment, driven by reductions in special education costs, higher graduation rates, lower incarceration rates, and higher adult earnings. The mechanism is simple: cognitive and socioemotional development is not evenly distributed at birth, but it is highly malleable in the years between 2 and 5. A child who enters kindergarten behind their peers in language and numeracy rarely closes that gap. A child who enters on pace rarely falls behind. Universal pre-K does not eliminate inequality in outcomes, but it narrows the starting line before the race begins.

At $20–$30 billion per year, universal public pre-K for ages 3 and 4 is the smallest line item in this portfolio and by some measures the highest-return one. Forty countries offer it as a standard entitlement. In the United States, access depends heavily on state, income, and geography: some states have built strong systems, others have almost nothing, and the quality gap between programs for wealthy and low-income children is vast. A federal program would not replace what works at the state level; it would establish a floor beneath which no child falls, regardless of their zip code or their parents’ income.

The Full Picture

At $500–$700 billion in annual revenue, the question is no longer which two of three programs to fund. It is how to assemble the full suite:

The entire portfolio costs $360–$470 billion per year, comfortably inside the revenue range, leaving $100–$200 billion in headroom for deficit reduction, other priorities, or a buffer against behavioral responses that reduce the tax base. The United States would not be pioneering an untested experiment. Every item in this table is already standard in Germany, France, Canada, Sweden, and a dozen other wealthy democracies, each with its own inefficiencies and tradeoffs. The programs described here are designed to sidestep the most common objections: none require single-payer healthcare, none eliminate private alternatives, and all preserve individual choice. The U.S. has been the outlier not because those tradeoffs were unacceptable, but because it has never had a fiscal instrument that reached the wealth required to fund the baseline.

The median-income family’s child, from birth, goes to care that does not require a second job to pay for. At ages 3 and 4, they attend publicly funded pre-K. If the parents face a serious illness, the bill does not threaten their retirement savings or their mortgage. When their child finishes high school, a public university is financially within reach without a mortgage-scale debt load. None of these are extraordinary expectations in peer countries. In the United States, each depends on circumstances no family controls: which employer offers coverage, which state funds pre-K, whether a serious illness arrives at the wrong time. These policies build the floor that people rise from.

None of these programs are extraordinary relative to peer nations, and they build the floor that people rise from.

Each of these programs also feeds back into the tax in the way the median-income peg was designed to reward. Childcare raises labor-force participation and lifetime earnings. Healthcare removes the precautionary drag on household spending and mobility. Free college widens access to higher-wage careers. All of these raise the median. A higher median raises the tax thresholds. The people at the very top get a little more room precisely because the people in the middle are doing better. The feedback loop described earlier is the opposite of a punitive ratchet. The tax rewards exactly what it aims to achieve: a rising median income.

This does not fund Medicare-for-All or a universal basic income. It funds the foundation that every wealthy peer of the United States already treats as a baseline: the years from birth through college entry and the healthcare floor beneath a working family. The question has never been whether the money existed. It has been whether the instrument existed to reach it. Now you are holding the design for one.