What Would Happen if Billionaires Paid the Same Tax Rates as Everyone Else?

The U.S. tax system often feels upside down. For most workers, a large share of every paycheck goes straight to taxes. Yet, stories abound of billionaires paying little—or sometimes almost nothing—by comparison.

To test what might happen if the ultra-wealthy paid the same tax rates as ordinary Americans, ChatGPT ran an analysis based on existing research. The results suggested that not only is the current system unequal, but changing it could bring in hundreds of billions—possibly over a trillion dollars—every year.

How Much Do the Wealthiest Pay Now?

According to the National Bureau of Economic Research (NBER), the top 400 wealthiest Americans paid an effective tax rate of about 23.8% between 2018 and 2020.
In contrast, the average American worker paid around 30%, and high earners whose income comes mostly from wages paid closer to 45%.

In some years, the richest 400 families actually paid less in taxes than the bottom 50% of households, according to NBER data.
An even starker example came from Oxfam, which found that in 2021, the wealthiest 400 families paid just 8.2% in federal income tax, compared with a national average of 13%.

Experts say this gap exists largely because of capital gains tax advantages, legal loopholes, and sophisticated tax planning strategies that ordinary taxpayers cannot access.

How Much Could Equal Tax Rates Raise?

When asked to run the numbers, ChatGPT estimated that equalizing tax rates between billionaires and working-class Americans could generate anywhere from $500 billion to $1 trillion per year in additional revenue.

Smaller adjustments would still have a major impact. For example:

• Increasing tax rates on the top 1% by just 10 percentage points could raise about $300 billion per year, or $3 trillion over a decade.

• A more aggressive change—raising billionaire tax rates by 25 percentage points—could yield as much as $800 billion annually.

What Could That Money Fund?

Even the most conservative estimate—$500 billion a year—could fund a range of large-scale public programs. According to ChatGPT’s analysis, such revenue could cover:

• Free public college tuition

• Universal pre-K programs

• Comprehensive childcare support

• Major infrastructure projects

• Expanded healthcare access and food assistance

In short, the additional tax revenue could transform public services and reshape what the federal government is capable of providing.

Policy Proposals on the Table

Several lawmakers have floated proposals targeting the wealth gap:

• Sen. Elizabeth Warren’s wealth tax could raise about $113 billion per year.

• Sen. Ron Wyden’s billionaire income tax might generate $56 billion annually.

• Oxfam’s proposal for a comprehensive global wealth tax on millionaires and billionaires projects $664 billion per year.

Challenges and Pushback

Opponents argue that higher taxes on billionaires could discourage investment or drive wealth offshore. However, ChatGPT’s analysis noted that Scandinavian countries, which tax the wealthy at higher rates, maintain strong economies and high innovation levels.

The AI also pointed out that global cooperation on tax policy—such as international minimum tax agreements—could make it harder for billionaires to move money across borders to avoid taxation.

Still, the political resistance to such reforms would be significant. Powerful lobbying interests, legal complexities, and constitutional questions have historically made wealth taxes difficult to implement. Economists also warn that overly aggressive tax hikes could slow economic growth or reduce overall revenue.

A Global Ripple Effect

If the United States were to adopt stronger taxes on billionaires, other major economies might follow suit. That could reduce global tax avoidance, encourage international coordination, and put pressure on tax havens to reform their systems.

The Bottom Line

Equalizing tax rates between billionaires and working Americans could bring in anywhere from hundreds of billions to over a trillion dollars annually—enough to dramatically expand public services.

But making it happen would require deep political will, major legal reforms, and a shift in global tax norms. As ChatGPT’s analysis concluded, the current system didn’t arise by accident—and changing it would face some of the fiercest resistance imaginable.