# Weekend Listen: Can the US Actually Tax Billionaires?

An episode of [Big Take](https://invisiblenetwork.ai/podcast/1578096201), 26 Jul 2026, 24 min.

Audio: https://podtrac.com/pts/redirect.mp3/tracking.swap.fm/track/UVBrz8bN8aM2Xe47PEPu/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/825d4e29-b616-46f4-afd7-ae2b0013005c/82b681f4-1674-4266-ba0d-b49101122889/audio.mp3?utm_source=Podcast&in_playlist=8b1dd624-a026-43e9-8b57-ae2b00130066

As wealth becomes increasingly concentrated — and artificial intelligence threatens to shift even more income from workers to investors — has the US tax system become outdated? On this Weekend Listen, Trumponomics' Stephanie Flanders speaks with Harvard professor Jason Furman, a former economic adviser to President Barack Obama, and Bloomberg reporter Caitlin Reilly about wealth taxes, capital gains, inheritance and whether taxing America's richest is politically or constitutionally possible. We have a special Bloomberg subscription offer for podcast listeners at Bloomberg.com/podcastoffer. See omnystudio.com/listener for privacy information.

## Transcript

[0:02] Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
[0:15] Speaker 2: As Stephanie Flanders, head of Government and Economics at Bloomberg,
[0:18] Speaker 2: and This is Trumponomics, the podcast that looks at everything
[0:22] Speaker 2: in the economic world of Donald Trump. This week, we
[0:26] Speaker 2: thought it made sense to talk about how the US
[0:28] Speaker 2: tax system is struggling to tax gazillionaires and whether any
[0:31] Speaker 2: of the bright ideas being floated for extracting more from
[0:34] Speaker 2: the mega rich would actually work. It's not only the
[0:38] Speaker 2: so called class warriors who are worrying about wealth taxes
[0:41] Speaker 2: these days. The International Monetary Fund held a war gaming
[0:45] Speaker 2: exercise a few months back with around fifty finance and
[0:48] Speaker 2: technology experts. David Ramley wrote about it for Business Week.
[0:52] Speaker 2: It included folks from Google, DeepMind, and the Rand Corporation,
[0:56] Speaker 2: and the Federal Reserve, and they spent hours debating how
[0:59] Speaker 2: AAR could upend the global economy in various ways. The
[1:03] Speaker 2: AI doomsday scenario they were most concerned about, it turned out,
[1:07] Speaker 2: was not killer robots, but a potentially civilization ending attack
[1:12] Speaker 2: on the income tax base. The US government, like many
[1:16] Speaker 2: relies on income taxes for much of its revenues, so
[1:20] Speaker 2: if AI destroys well paying jobs, the theory goes, it
[1:23] Speaker 2: could destroy a lot of those taxes. Now, there's plenty
[1:27] Speaker 2: of companies and big investors who would be raking it
[1:29] Speaker 2: in in that scenario. The trouble for the tax base
[1:32] Speaker 2: is that most of that money would be in the
[1:34] Speaker 2: form of capital gains on stocks and other assets, which
[1:37] Speaker 2: tend to be very lightly taxed. In fact, in the US,
[1:39] Speaker 2: they're often not taxed at all, and a number of
[1:42] Speaker 2: Bloomberg stories this week have highlighted new and even more
[1:45] Speaker 2: efficient ways that the super rich are finding to avoid
[1:49] Speaker 2: capital gains, even as gasoline prizes jump again and the
[1:52] Speaker 2: high cost of living stays as the number one issue
[1:55] Speaker 2: for most voters. So no wonder that we're hearing more
[1:59] Speaker 2: and more proposals from progressive politicians for wealth taxes, both
[2:02] Speaker 2: in Europe and the US. In California at one time,
[2:06] Speaker 2: billionaire five percent taxes on the ballot in the midterm
[2:09] Speaker 2: elections in November. That's got a lot of attention. There
[2:12] Speaker 2: are others. Could any of them get pasted? And even
[2:15] Speaker 2: before we get to that, would any of them work?
[2:18] Speaker 2: Johnny me to discuss this. We have in our DC
[2:21] Speaker 2: studio Caitlin Riley, who covers Congress for us with a
[2:24] Speaker 2: focus on tax and fiscal policy. And I should say,
[2:27] Speaker 2: although she's sitting in a special sound booth in Capitol Hill,
[2:30] Speaker 2: it is actually pretty noisy. Caitlin, thanks very much for
[2:34] Speaker 2: joining us.
[2:34] Speaker 1: Anyway, it is thank you for having.
[2:36] Speaker 2: Me, and I'm happy to say coming back this week
[2:40] Speaker 2: is Jason Furman, Professor of economic policy at the Harvard
[2:43] Speaker 2: Kennedy School and Harvard's Department of Economics, and he, of
[2:46] Speaker 2: course was chair of President Obama's Council of Economic Advisors,
[2:50] Speaker 2: writes and thinks about pretty much everything this podcast is
[2:53] Speaker 2: interested in. Jason, thanks for coming back.
[2:56] Speaker 3: Great to be back with you.
[3:01] Speaker 2: Caitlyn, just give us a quick summary of how live
[3:05] Speaker 2: this issue is of taxing the wealthy where you hang
[3:08] Speaker 2: out on Capitol Hill.
[3:09] Speaker 1: Well, it's increasingly front of mind for Democrats. Democrats are
[3:13] Speaker 1: not currently in power in either the House, the Senate,
[3:16] Speaker 1: or of course the White House, and so right now
[3:19] Speaker 1: these ideas are more theoretical, but they featured heavily in
[3:24] Speaker 1: the twenty twenty presidential primary on the Democrat side, and
[3:27] Speaker 1: we would expect them to feature heavily again as we
[3:31] Speaker 1: look forward to twenty twenty eight. There are several competing
[3:35] Speaker 1: sort of tax proposals on how to get at taxing
[3:38] Speaker 1: the wealthy. Some of those are wealth taxes, some of
[3:41] Speaker 1: those would use other types of tax to get at
[3:43] Speaker 1: that wealth that's not collected as wages. But we would
[3:47] Speaker 1: expect that Democrats will continue to have this debate kind
[3:50] Speaker 1: of between the progressive and more moderate flakes of a
[3:53] Speaker 1: party about how to tax the wealthy. A large part
[3:57] Speaker 1: of that is because when you want to create ambitious
[4:01] Speaker 1: new social programs, you have to figure out ways to
[4:03] Speaker 1: pay for them, and we're already reaching dizzying levels of debt,
[4:06] Speaker 1: so how to pay for a democratic agenda will be
[4:11] Speaker 1: front of mind in the years ahead.
[4:14] Speaker 2: I mentioned about the possible future erosion of the tax
[4:17] Speaker 2: base due to AI and a reduction in the number
[4:21] Speaker 2: of certain kind of jobs, but the tax base has
[4:24] Speaker 2: already been somewhat eroded, right. There is also just a
[4:27] Speaker 2: concern that the system is getting worse and worse at
[4:30] Speaker 2: taxing some of the new money coming on stream.
[4:33] Speaker 1: Exactly, the tax system in the US focuses heavily on wages,
[4:37] Speaker 1: and that's really not the way that the wealthy collect
[4:41] Speaker 1: and expand their wealth, and the tax hold has not
[4:43] Speaker 1: been very good at getting at those types of holdings,
[4:47] Speaker 1: and we've actually seen the taxes that do target wealth
[4:52] Speaker 1: erode over time. The estate tax is a big piece
[4:55] Speaker 1: of that. The corporate tax rate here is also lowered
[4:58] Speaker 1: over time, and so we've the way that previous generations
[5:03] Speaker 1: were able to impose heavier taxes on the wealthy eroad here.
[5:08] Speaker 1: And there's some interesting research by French economists Emanuel Saiez
[5:14] Speaker 1: and Gabrielle Zuckman who looked at the amount the very
[5:18] Speaker 1: wealthy paid in tax going back to the nineteen fifties
[5:23] Speaker 1: and recently for the first time you saw the top
[5:26] Speaker 1: four hundred wealthiest households, according to their research, pay actually
[5:30] Speaker 1: a lower effective tax rate than the bottom fifty percent
[5:33] Speaker 1: of households in the US.
[5:35] Speaker 2: Jason, first, I should ask whether you sort of buy
[5:38] Speaker 2: into the idea that we've got less and less good
[5:40] Speaker 2: at taxing wealth, or was it just that there's just
[5:42] Speaker 2: a lot more of it about and there's more focus
[5:44] Speaker 2: on it.
[5:45] Speaker 3: So let's just state a few facts and then I'll
[5:48] Speaker 3: get to your question. The first is that the tax code,
[5:51] Speaker 3: if you look at slices up through the top one
[5:54] Speaker 3: tenth of one percent, is actually progressive the top one
[5:58] Speaker 3: tenth of one percent is paying higher taxes on average
[6:01] Speaker 3: than people in the middle, who are paying higher taxes
[6:03] Speaker 3: than people on the bottom. Now, I can't tell you
[6:06] Speaker 3: as an economist is it progressive enough. As a person,
[6:10] Speaker 3: I think it's not progressive enough, and I'd like to
[6:12] Speaker 3: make it more progressive. The second question is how has
[6:16] Speaker 3: it changed over time? It's become a bit less progressive.
[6:19] Speaker 3: And the biggest action there has been lowering the corporate
[6:22] Speaker 3: tax rate, which used to be thirty five percent and
[6:25] Speaker 3: is now twenty one percent, and so that has reduced
[6:28] Speaker 3: the taxation of capital income, which disproportionately goes to people
[6:32] Speaker 3: at the top. But there's also been relative to twenty
[6:36] Speaker 3: years ago or twenty five years ago, things like capital
[6:39] Speaker 3: gains and dividend rates are lower than they used to be. Then, third,
[6:44] Speaker 3: there is an issue of the progressivity within the top
[6:47] Speaker 3: one tenth of one percent. You know, the top four
[6:49] Speaker 3: hundred people that Caitlin mentioned. And in one sense, there's
[6:54] Speaker 3: a lot of money that those people have relative to
[6:57] Speaker 3: the fiscal system as a whole. It's just not quite
[7:00] Speaker 3: as important as thinking about the top one tenth of
[7:03] Speaker 3: one percent, or maybe even the top ten percent of Americans.
[7:06] Speaker 3: And then the very last things is what is your goal?
[7:09] Speaker 3: Is your goal to raise revenue while causing the least
[7:11] Speaker 3: pain or is it to discourage some type of activity
[7:16] Speaker 3: you think is bad. When we do payroll taxes, we're
[7:19] Speaker 3: mostly trying to raise revenue and we don't want to
[7:21] Speaker 3: harm anyone. When we do tobacco taxes, we want less smoking.
[7:25] Speaker 3: The goal is to actually change behavior. When you're taxing corporations,
[7:29] Speaker 3: when you're taxing the wealthy, what are you trying to
[7:32] Speaker 3: do raise revenue with minimal pain or changed behavior? And
[7:36] Speaker 3: that's a real threshold question that's debated.
[7:39] Speaker 2: Caitlyn has already pointed out that without any kind of
[7:41] Speaker 2: Democrat control in Congress litt alone the White House, they're
[7:45] Speaker 2: unlikely to be passed. But you know, you have Bernie
[7:47] Speaker 2: Sanders and Representative Rocana. They propose a five percent annual
[7:51] Speaker 2: wealth tax on billionaires, the California initiative, which is on
[7:55] Speaker 2: the ballot. There's a bunch of them, but the main
[7:57] Speaker 2: one is a five percent tax, one off time, supposedly
[8:01] Speaker 2: on net worth over one billion, I mean, measured by
[8:06] Speaker 2: your tests. Do either of those make sense? Do either
[8:11] Speaker 2: of those sound like they're just raising money or are
[8:13] Speaker 2: they trying to get rid of billionaires.
[8:15] Speaker 3: I am quite skeptical of both of those proposals. So,
[8:19] Speaker 3: first of all, one it depends on this fork. In
[8:22] Speaker 3: my view, Jeff Bezos has made the world a better
[8:25] Speaker 3: place by bringing down prices, expanding variety, even giving access
[8:30] Speaker 3: to small businesses to ways to sell things they didn't
[8:33] Speaker 3: used to. I also think Jeff Bezos wouldn't miss the
[8:35] Speaker 3: money if you raise his taxes. So I very much
[8:37] Speaker 3: support raising taxes on Jeff Bezos, but I'd like to
[8:40] Speaker 3: do it in a way that doesn't change Amazon that much.
[8:43] Speaker 3: I think Rocanna and Bernie Sanders don't mind if you
[8:47] Speaker 3: got less of the type of economic activity that Jeff
[8:50] Speaker 3: Bezos engaged in. They think it probably didn't, unbalance, make
[8:54] Speaker 3: the world a better place. So we're coming from it
[8:56] Speaker 3: from somewhat different places, which gives you different answers. The
[9:00] Speaker 3: second thing is, for the two taxes that you just
[9:03] Speaker 3: gave as examples, the answers are somewhat different at the
[9:06] Speaker 3: level of California, and I would also say, by the way,
[9:08] Speaker 3: the same thing at the level of France. It's just
[9:10] Speaker 3: a lot easier for people to move and so you
[9:13] Speaker 3: may not succeed in either goal. You may not raise
[9:16] Speaker 3: revenue if you drive people out of the state and
[9:18] Speaker 3: lose their jobs and their income taxes and the like.
[9:21] Speaker 3: And you may not even have fewer billionaires, like fewer
[9:23] Speaker 3: billionaires in California, but you'll have more in Texas. And
[9:26] Speaker 3: if you care about the United States as a whole,
[9:28] Speaker 3: I don't think you'd count that as any sort of victory.
[9:32] Speaker 3: So the smaller the unit that's trying to do it,
[9:36] Speaker 3: the harder it is to do this. Then nationally, there's
[9:40] Speaker 3: another issue you run into, which is the US Constitution
[9:44] Speaker 3: says you can't have direct taxes unless they're apportioned exactly
[9:50] Speaker 3: to the population in the state. There's then an amendment
[9:53] Speaker 3: that says that as an exception for income taxes, there's
[9:55] Speaker 3: no exception for wealth taxes. Most constitutional scholars would agree
[10:00] Speaker 3: that the current Supreme Court would rule wealth taxes unconstitutional.
[10:05] Speaker 3: So at the national level, I think it's just a
[10:07] Speaker 3: waste of time to be talking about it, even if
[10:09] Speaker 3: you think it's a good idea, because courts wouldn't allow it.
[10:13] Speaker 2: Caitlin, is that right that people recognize that there's this
[10:16] Speaker 2: pretty solid constitutional case against these things. Regardless of whether
[10:20] Speaker 2: that makes sense that you can't have direct wealth taxes.
[10:23] Speaker 1: Well, I think supporters of the wealth taxes would probably
[10:26] Speaker 1: argue that it's an open question. But yes, it's true
[10:30] Speaker 1: there is this like very large, looming constitutional question, and
[10:34] Speaker 1: with the current makeup of the Supreme Court, it's difficult
[10:37] Speaker 1: to see them siding on the side of a wealth tax.
[10:41] Speaker 1: So there is this potential, very hard stop at the
[10:45] Speaker 1: end of this debate.
[10:48] Speaker 2: Caitlin, I remember finding surprising when I first went to
[10:52] Speaker 2: work in the US million years ago was the step
[10:56] Speaker 2: up in basis rule that resets the cost basis for assets.
[11:00] Speaker 2: If you get extremely wealthy in your lifetime, maybe you
[11:02] Speaker 2: are Jeff Bezos. You don't realize those capital gains. They're
[11:06] Speaker 2: just sitting there as part of your and your assets
[11:10] Speaker 2: and your wealth. You pass it on to your children
[11:12] Speaker 2: and it's considered you sort of starting the clock again,
[11:15] Speaker 2: and those all of those gains during your lifetime are
[11:17] Speaker 2: not ever taxed on capital gains.
[11:20] Speaker 1: I think that's definitely part of the conversation. And then
[11:23] Speaker 1: another piece of this is not only do those assets
[11:27] Speaker 1: value reset at the point of death, but for the
[11:30] Speaker 1: lifetime of the person who holds that wealth, they're often
[11:33] Speaker 1: able to borrow against it and able to kind of
[11:36] Speaker 1: like access liquidity without actually selling those assets. And so
[11:41] Speaker 1: for that reason, those loans are becoming one of the
[11:45] Speaker 1: focuses of a potential place where you could tax adjusting
[11:50] Speaker 1: stepped up basis is another piece of it, taxing unrealized
[11:54] Speaker 1: gains as a proposal Senator Wyden has put forward. He's
[11:57] Speaker 1: the top Democrat on the Finance in the Senate, which
[12:01] Speaker 1: has jurisdiction over tax policy. So yeah, there are a
[12:05] Speaker 1: number of other ideas floating around that would allow you
[12:08] Speaker 1: to effectively target taxes at the very wealthy.
[12:13] Speaker 2: Jason, I think it's one of those things that just
[12:15] Speaker 2: strikes people as an extraordinary benefit. If you're rich enough
[12:19] Speaker 2: that you just never need to realize these gains, you
[12:22] Speaker 2: then get to just pass them on in tact to
[12:25] Speaker 2: your heirs, who, given the way our state tax works,
[12:28] Speaker 2: potentially don't pay any further tax on them. Is that
[12:32] Speaker 2: the easiest thing that you could tackle within the constitution.
[12:35] Speaker 3: Yeah, absolutely, that's the way I think we should approach it,
[12:37] Speaker 3: and it broadly two things. One is, without even getting fancy,
[12:42] Speaker 3: you could have higher tax rates. You could raise the
[12:45] Speaker 3: top tax rate, which is thirty seven percent, by several
[12:49] Speaker 3: percentage points without creating very much of a problem at all.
[12:52] Speaker 3: You could raise the tax rate on capital gains to
[12:54] Speaker 3: twenty eight percent, you could raise the corporate rate, and
[12:57] Speaker 3: those are just one line changes in the tax code,
[13:00] Speaker 3: no constitutional debate whatsoever, and it would work just fine.
[13:05] Speaker 3: Second is the type of structural issues that Caitlin was
[13:08] Speaker 3: bringing up, and they largely get at The capital gains
[13:13] Speaker 3: rate applies in theory, but in fact, if you hold things,
[13:15] Speaker 3: you don't pay it, and there's different ways of getting
[13:17] Speaker 3: at it. One is if you eventually have to pay it,
[13:20] Speaker 3: then holding it is an advantage, but the advantage is timing.
[13:24] Speaker 3: It's not the advantage of you're never ever going to
[13:27] Speaker 3: pay it. That actually has one nice side effect, which
[13:30] Speaker 3: is right now, sometimes people get locked into assets with
[13:33] Speaker 3: capital gains. For a capitalist system, you'd like whoever is
[13:37] Speaker 3: the most productive owner of an asset to own it.
[13:40] Speaker 3: If it costs money for the productive owner of the
[13:42] Speaker 3: asset to sell it and someone else to buy it,
[13:44] Speaker 3: they may not do it. They may get locked in.
[13:47] Speaker 3: Capital may be in the wrong hand. So one thing
[13:49] Speaker 3: I like about things that reduce this and taxing gains
[13:53] Speaker 3: is their accrued the widened proposal that Caitlin cited, or
[13:57] Speaker 3: taxing them at death, or reducing the ability to borrow
[14:01] Speaker 3: against them. All of these are different ways of not
[14:05] Speaker 3: just fixing the existing system, but actually getting rid of
[14:08] Speaker 3: an economic distortion.
[14:10] Speaker 2: I guess the reason why the debate is not on
[14:12] Speaker 2: raising the basic or the highest rate of income tax
[14:16] Speaker 2: is that that isn't capturing this kind of wealth that
[14:20] Speaker 2: we're talking about. If you start taxing unrealized gains, I mean,
[14:24] Speaker 2: aren't they just enormous logistical and technical issues with that.
[14:28] Speaker 2: You're taxing people on things that they haven't actually received
[14:31] Speaker 2: as income. Presumably you're addressing the constitutional question by saying
[14:34] Speaker 2: they've effectively received that income.
[14:37] Speaker 3: Yeah. The Biden administration had what I thought was actually
[14:40] Speaker 3: a pretty thoughtful proposal on this, because there's two issues
[14:43] Speaker 3: you need to grapple with. One is if you tax
[14:46] Speaker 3: someone on gains when the market runs up twenty percent
[14:49] Speaker 3: and then it goes down twenty percent, do you send
[14:51] Speaker 3: them a check? So what they did was basically averaged
[14:54] Speaker 3: it over five years and had you pay out an installment,
[14:57] Speaker 3: and then if the market fell, it just canceled your
[14:59] Speaker 3: future installment, so they handled the refund issue. The second
[15:03] Speaker 3: is how do you value privately held assets, And they
[15:07] Speaker 3: basically assumed they had a certain rate of return and
[15:10] Speaker 3: then when if or when you eventually selld them, you
[15:13] Speaker 3: reconciled with the assumption that was built into it against
[15:17] Speaker 3: what had actually happened. I think that was probably a
[15:21] Speaker 3: workable system. Is also the case that it was exceedingly
[15:24] Speaker 3: unpopular in certain quarters, and we've seen it actually around
[15:28] Speaker 3: the world in different countries, I believe Belgium and Italy,
[15:31] Speaker 3: but don't fact check me, because there's a little bit
[15:33] Speaker 3: of a distant memory. Have tried at various times to
[15:36] Speaker 3: disconnect capital gains payments from when you actually get the cash,
[15:40] Speaker 3: and those didn't last very long or maybe even were
[15:43] Speaker 3: canceled before they went into effect. So if you just
[15:46] Speaker 3: tax them at death, you get sort of eighty five
[15:50] Speaker 3: percent of the way to the benefits of taxing them
[15:53] Speaker 3: each year as they accrue, with maybe twenty percent of
[15:56] Speaker 3: the political pain. So that probably is the more proof.
[16:00] Speaker 3: But I am tempted by be as of the cruise.
[16:04] Speaker 2: But Caitlin, I mean Jason mentions the unpopularity and actually
[16:08] Speaker 2: Ben Steven made this point on the podcast the other day.
[16:10] Speaker 2: Until quite recently, billionaires were not particularly unpopular in the US,
[16:14] Speaker 2: and then I think partly because they've been so much
[16:16] Speaker 2: more in your face in recent years and you have
[16:19] Speaker 2: the likes of Elon Musk and the numbers just becoming
[16:21] Speaker 2: dizzyingly high, that seems to have tilted a bit. But
[16:25] Speaker 2: it is still incredibly unpopular to really tax wealth at
[16:29] Speaker 2: death or tax inheritance at all. I mean, in fact,
[16:32] Speaker 2: in the Big Beautiful Bill, the estate tax exemption was
[16:37] Speaker 2: raised to fifteen million dollars per person, and that doesn't
[16:40] Speaker 2: seem to have been a particularly unpopular bit of the bill.
[16:43] Speaker 1: That's correct. I will say, when you poll people and
[16:46] Speaker 1: ask them generally about tax fairness and do you feel
[16:49] Speaker 1: that your tax fairly do you fear that feel that
[16:52] Speaker 1: the very wealthier being taxed fairly, Americans do tend to
[16:56] Speaker 1: support increasing taxes on the way. Many of them also
[17:01] Speaker 1: feel like they're unfairly taxed. So there is a little
[17:04] Speaker 1: bit of taxes for you but not for me mentality.
[17:09] Speaker 1: But it does get more tricky when you dial into
[17:14] Speaker 1: kind of the nitty gritty of specific tax policy, and
[17:17] Speaker 1: I think the popularity would also probably depend heavily on
[17:22] Speaker 1: where these taxes were targeted and what sort of income
[17:26] Speaker 1: thresholds were placed onto them.
[17:29] Speaker 2: But Jason, certainly, and this is true in the UK
[17:30] Speaker 2: as well. I mean, in Harrish's text is just remarkably unpopular,
[17:34] Speaker 2: even among people who realistically have no chance of ever
[17:38] Speaker 2: having thes need to pay it.
[17:40] Speaker 3: Yeah. I mean, I've been working on this topic in
[17:43] Speaker 3: public policy for thirty years now, and I don't have
[17:46] Speaker 3: a good answer for you. You know, I remember once President Clinton,
[17:51] Speaker 3: I think he was at a fundraiser, maybe it was
[17:53] Speaker 3: in Idaho or something like that, and the person traveling
[17:56] Speaker 3: with him called in to find out the estate tax
[18:00] Speaker 3: and said, he's hearing a lot of complaints about the
[18:03] Speaker 3: estate tax here in Idaho, and what can I tell them?
[18:06] Speaker 3: And we sent back the fact that last year, six
[18:08] Speaker 3: people paid the estate tax in Idaho, to which the
[18:11] Speaker 3: person responded, yes, but the children of all six of
[18:15] Speaker 3: them are currently sitting at the table with them at
[18:17] Speaker 3: this fundraiser.
[18:18] Speaker 2: Well, that tells you something about probably political influence of
[18:22] Speaker 2: those who.
[18:22] Speaker 3: Right right, right, and topically there's another story that is
[18:26] Speaker 3: too good to check. So it is in my memory.
[18:28] Speaker 3: I am sure it has grown in my memory over time,
[18:31] Speaker 3: but it captures the spirit of it, so that's part
[18:33] Speaker 3: of what's going on. But yeah, no, I mean I
[18:36] Speaker 3: remember there used to be farmers that would roll up
[18:38] Speaker 3: on Capitol Hill with their tractors and you'd go through
[18:41] Speaker 3: and say, the estate tax has all these different special
[18:44] Speaker 3: rules for farmers that make it really really low paid
[18:47] Speaker 3: out over a really long time, and they'd be like, oh,
[18:49] Speaker 3: this person had to sell their family farm, and that
[18:51] Speaker 3: was basically mathematically impossible because the way in which it
[18:55] Speaker 3: paid out over time was such that the income would
[18:58] Speaker 3: always be way more than sufficient. So I don't know.
[19:00] Speaker 3: I have a hard time with what I see is
[19:03] Speaker 3: the irrationality of it.
[19:04] Speaker 2: Now.
[19:04] Speaker 3: To be clear, if you want to make an argument
[19:06] Speaker 3: and I have friends that make this argument on the
[19:08] Speaker 3: conservative side that somebody worked hard and they saved a
[19:11] Speaker 3: lot and they deserve the money and it's unfair, that's
[19:15] Speaker 3: not exactly my moral perspective. But I don't think that's
[19:17] Speaker 3: a crazy perspective. But if your perspective is this is
[19:20] Speaker 3: destroying small businesses, destroying family farms, that's just not factually true.
[19:25] Speaker 2: I mean, when you talk about things that are moral
[19:27] Speaker 2: principles versus just kind of practical principles. You mentioned it
[19:30] Speaker 2: for California, but you seem to be suggesting, Jason, in
[19:34] Speaker 2: the US, this question of not being able to tax
[19:38] Speaker 2: wealth because this is so it's mobile capital and people
[19:41] Speaker 2: can go. And you may be right on this, you
[19:43] Speaker 2: implicitly seem to be suggesting, you know, if you're in
[19:45] Speaker 2: a European country, it's very easy for people to leave
[19:48] Speaker 2: a European country, but in the US, it's going to
[19:52] Speaker 2: be harder for people to avoid the US tax jurisdiction altogether.
[19:56] Speaker 2: Do you think that's true.
[19:57] Speaker 3: Yeah, yes, I was trying to say that, and I agree,
[20:01] Speaker 3: and I agree with myself on that point. But just
[20:03] Speaker 3: to be clear, it's not like zero in the United
[20:06] Speaker 3: States one hundred in Europe. It's a continuum, and it's
[20:09] Speaker 3: not like if you raise the tax rate to ninety
[20:11] Speaker 3: percent in the United States, you wouldn't get people more
[20:14] Speaker 3: people leaving the United States. You would and I wouldn't
[20:16] Speaker 3: do it. But within the range of the types of
[20:18] Speaker 3: tax changes that are under consideration that we're talking about,
[20:22] Speaker 3: the moving out of the United States, to me, seems
[20:25] Speaker 3: like a relatively small consideration. The moving out of California
[20:29] Speaker 3: and moving out of France is a medium size consideration.
[20:34] Speaker 2: Just to kind of bring this to close, we've highlighted
[20:36] Speaker 2: there's obviously leftwood shift, at least in parts of the
[20:41] Speaker 2: Democratic Party, and that's producing some of these proposals from
[20:44] Speaker 2: the side of the party that potentially would say, you know,
[20:47] Speaker 2: we shouldn't have any billionaires. But I highlighted at the
[20:49] Speaker 2: start that there's also this whole other reason why we
[20:53] Speaker 2: want to get better at taxing wealth is that the
[20:55] Speaker 2: income tax base could be eroded quite significantly by AI. Jason,
[21:01] Speaker 2: I mean, we've debated this in the past, how dramatic
[21:04] Speaker 2: the change might be from AI. But do you think
[21:07] Speaker 2: that that could make these questions more current and the
[21:11] Speaker 2: kind of analysis that you've shared about the best ways
[21:15] Speaker 2: of doing this will become a much more live issue
[21:18] Speaker 2: for policymakers.
[21:19] Speaker 3: I think there's a decent a chance it will become
[21:21] Speaker 3: a much more live issue. But it would be a
[21:24] Speaker 3: shame if we thought it was the only issue. So,
[21:27] Speaker 3: first of all, in terms of AI, yes, we don't
[21:30] Speaker 3: know productivity, we don't know the impact on jobs, et cetera.
[21:33] Speaker 3: One of the more robust predictions though, is that it
[21:36] Speaker 3: will lower the labor share and raise the capital share
[21:40] Speaker 3: over time. I'm not sure about that, but I'd bet
[21:43] Speaker 3: on that a little bit more heavily than i'd bet
[21:45] Speaker 3: on the job loss, and I wouldn't bet zero, you know,
[21:48] Speaker 3: bet entirely against the job loss. So so that is
[21:51] Speaker 3: in the sense that I agree with you that this
[21:53] Speaker 3: is going to become a more important issue. It is
[21:57] Speaker 3: the case though the labor share right now is seventy percent.
[22:00] Speaker 3: I'd be shocked if in a decade it was below
[22:02] Speaker 3: fifty percent. Maybe thirty years from now it'll be thirty percent.
[22:06] Speaker 3: In all of those how you tax income is still
[22:08] Speaker 3: going to matter, and so yes, we should figure out
[22:11] Speaker 3: how to tax the capital side, which right now is
[22:13] Speaker 3: thirty percent of income, probably rising, and the holes in
[22:17] Speaker 3: the way we tax it, as Caitlin and you and
[22:19] Speaker 3: I have been talking about, have been growing. So absolutely
[22:23] Speaker 3: do that. But I don't think we should forget the
[22:26] Speaker 3: old fashioned income side, which is still the majority and
[22:30] Speaker 3: likely to be for some time, and there's more room
[22:32] Speaker 3: there as well.
[22:33] Speaker 2: Okay, well, so we don't have to worry about Maybe
[22:35] Speaker 2: we should just go back to worrying about killer robots.
[22:38] Speaker 2: Jason Furman and Caitlin Riley thank you so much.
[22:41] Speaker 3: Thank you, thank you, thank.
[22:55] Speaker 2: Thanks for listening to Trumpnomics from Bloomberg. It was hosted
[22:58] Speaker 2: by me Stephan Flanders and I was just joined by
[23:00] Speaker 2: Bloomberg reporter Caitlin Riley and the Harvard economist Jason Furman.
[23:04] Speaker 2: Trumponomics was produced this week by Moses and Dam and Samasadi,
[23:08] Speaker 2: with help from Gilda Dakali in New York and Amy Keith.
[23:12] Speaker 2: A sound designed by Blake Naples and Kelly Garrett. And
[23:15] Speaker 2: to help others find us, please rate and review us
[23:18] Speaker 2: I wherever you listen

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