How Much Do Billionaires Actually Pay Now?

Under current federal tax law, wealthy individuals are only taxed when they realize income—typically by selling stock or other assets. Because much of the wealthiest Americans’ net worth consists of stock that keeps rising in value without ever being sold, enormous fortunes can grow for years with minimal annual tax liability.

The bill’s sponsors highlight striking examples: according to the Institute on Taxation and Economic Policy, Tesla reported roughly $11 billion in U.S. income between 2018 and 2022 yet paid little to no federal income tax during that period. In 2022 alone, the company earned an estimated $5.5 billion but maintained an effective federal tax rate near zero after deductions and compensation credits.

The proposed wealth tax would change that dynamic entirely. Rather than waiting for a sale, a 5% annual levy would apply to total net worth above $1 billion. For a billionaire worth $10 billion, that would mean a $500 million tax bill in a single year—regardless of whether they sold anything.