LET’S THINK THROUGH A 1% SUPER WEALTH TAX TO FUND CRITICAL SOCIAL AND HUMANITARIAN PROGRAMS. White Paper from The caring world.

Written By david wecal

As President Trump seeks to control spending on Congressional approved budgets for social services and humanitarian aid, the American people need to investigate and seriously consider alternative funding for programs and agencies that impact human life in this country and in foreign nations that we have helped for decades. We are looking at a 1% super wealth tax on the richest of richest Americans that could raise in excess of $70 million per year. The rationale is that these richest of richest have made their fortunes because of the U.S. economy. Many have made billions doing business with the U.S. government. Also the lifestyles and business operations of this group has a much greater effect on the environment and climate change that the average American. What follows is an executive summary followed by a more detailed white paper.

Executive Summary: A 1% U.S. Billionaire Wealth Tax to Close the Humanitarian Aid Gap

Objective. Create a dedicated, stable revenue stream to permanently eliminate the current $9 billion shortfall in U.S. humanitarian aid by enacting a narrowly targeted 1% annual tax on the net wealth of U.S. billionaires.

Scale. As of 2025, America has roughly 900+ billionaires. Their combined wealth surpassed $7 trillion in June 2025 (based on Forbes data compiled by Americans for Tax Fairness). A 1% levy on that base yields about $70 billion per year—nearly 8× the identified shortfall, even before behavioral or market adjustments. ForbesAmericans For Tax Fairness

Use of funds. Establish a Humanitarian Aid Stability Fund (HASF) at Treasury that:

  • Automatically transfers the first $9 billion each fiscal year to USAID/State humanitarian accounts (IDO/Humanitarian Assistance, Migration and Refugee Assistance, Global Health, etc.).

  • Smooths volatility via a rolling three-year reserve so appropriations remain steady through market cycles.

Administration & design. The tax applies to U.S. tax residents with net worth ≥ $1 billion, defined as worldwide assets minus liabilities. Public assets are mark-to-market; private assets follow standardized valuation safe harbors with third-party reporting and audit. Anti-evasion tools include information reporting, penalties for under-valuation, and an exit taxto discourage tax-motivated expatriations (modeled on prior proposals). OECDElizabeth Warren's Senate Website

Legality. The Supreme Court’s 2024 decision in Moore v. United States upheld a tax on undistributed, realized business income and explicitly did not resolve whether “realization” is constitutionally required for all income taxes, leaving space for alternative designs (e.g., minimum-tax approaches, mark-to-market) and for a direct wealth tax debate in Congress. Multiple legal analyses argue a properly drafted federal wealth tax is constitutional. Supreme CourtPoliticoRoosevelt InstituteGeorgetown Law Scholarship

Revenue reality check. Even under conservative assumptions—−20% market drawdown and 15% avoidance/non-collection—a 1% levy still nets about $50–60 billion/year, leaving ample headroom to fully backstop the $9 billion aid gap. (Baseline: ~$70 billion.) Global work for the G20 suggests a 2% minimum levy on billionaires could raise $200–$250 billion/year—scale that underscores feasibility. Americans For Tax FairnessGabriel Zucman | Professor of economics

Why 1%. International evidence shows that low-rate, broad-base designs minimize distortions and are administratively manageable—particularly with modern information reporting. The OECD’s design guidance and European experience inform the safe-harbor valuation, reporting, and audit playbook proposed here. OECDTax Foundation

White Paper: Designing a 1% Billionaire Wealth Tax to Permanently Fund U.S. Humanitarian Aid

1) Policy Goal & Rationale

  • Goal: Permanently close a recurring $9 billion humanitarian aid funding gap without touching middle-class taxes or annual appropriations battles.

  • Mechanism: 1% annual tax on the net wealth of U.S. billionaires (≥ $1 billion), with proceeds dedicated to a new Humanitarian Aid Stability Fund (HASF).

Scale & sufficiency. U.S. billionaire wealth topped $7 trillion in 2025; 1% produces ~$70 billion gross annually. Even with conservative haircuts, net collections handily exceed needs, ensuring predictability in aid budgets and allowing a reserve to buffer market swings. Americans For Tax Fairness

2) Tax Base, Rate, and Threshold

  • Threshold: Net worth ≥ $1 billion (averaged over two consecutive year-ends to reduce cliff effects).

  • Rate: 1.0% on net wealth above $1 billion.

  • Base: Worldwide net wealth (all asset classes) less bona fide liabilities.

    • Included: Public equities and bonds; private business equity; carried interests; derivatives (net); cash; real estate; alternatives (PE/VC funds, hedge funds); art/collectibles; trusts and foundations where the taxpayer retains beneficial interest or control.

    • Excluded: Personal-use household goods under a de minimis threshold; defined-benefit pension rights already taxed at entity level.

  • Residency: U.S. citizens and long-term residents; treaty provisions respected.

International context. Only a handful of OECD countries levy recurrent net wealth taxes today; the OECD provides detailed design guidance, which this proposal follows (broad base, low rate, robust reporting). OECDTax Foundation

3) Valuation & Information Reporting

  • Publicly traded assets: Daily mark-to-market; end-year valuation for liability, with average-of-quarter option to dampen volatility.

  • Private business equity: Safe harbors: (i) last arm’s-length financing valuation, (ii) formula based on EBITDA and industry multiples, or (iii) NAV for investment entities; taxpayers may elect the highest to deter under-valuation.

  • Real estate: Assessed using appraisal safe harbors (recent transaction; standardized capitalization rate tables).

  • Alternatives, art, and collectibles: Certified appraisals or fund manager NAVs; penalties for lowballing.

  • Reporting: Create Form 1099-W ecosystem (brokers, banks, custodians, funds, registries) with automatic information exchange; leverage post-FATCA frameworks and beneficial-ownership registries. OECD

4) Administration, Compliance & Anti-Avoidance

  • IRS Wealth Tax Unit: Specialized valuation teams; ≥ 30% audit rate within the covered population during rollout, then risk-based selection.

  • Under-valuation penalties: Accuracy-related (20%); gross misstatement (40%); civil fraud (75%).

  • Trusts & pass-throughs: Look-through rules to beneficial owners; attribution rules for family/entity webs.

  • Cross-border: Matching with CRS/FATCA data; penalties for non-filing; cooperation agreements.

  • Expatriation deterrent: An exit tax assessed on net wealth above the threshold for covered expatriates (modeled on prior federal proposals at ~40%), which evidence suggests materially reduces avoidance via migration. Elizabeth Warren's Senate WebsiteEconometrics Laboratory

5) Alternative Legal Framings (If Desired)

While a direct net wealth tax is a straightforward instrument, lawmakers can also consider:

  • A billionaires minimum tax pegged to a percent of wealth (e.g., “effective tax = max[regular income/capital-gains tax, 1% of wealth]”), which can be administered through income-tax machinery and reduce constitutional risk.

  • A mark-to-market regime for ultra-high-wealth taxpayers’ tradable assets with a deferral charge on non-tradables—approaches debated around Moore and in Senate proposals. Moore left the “realization” question open, preserving congressional flexibility to design such instruments. Supreme CourtPenn Wharton Budget Model

Multiple constitutional analyses (Roosevelt Institute, leading academics) argue a well-drafted federal wealth tax can pass muster; Moore did not foreclose these paths. Roosevelt InstituteGeorgetown Law Scholarship

6) Revenue, Volatility, and Sensitivity

  • Baseline: ~$7 trillion × 1% = $70 billion.

  • Conservative case A (market −20%): $56–60 billion (depending on base composition).

  • Conservative case B (−15% enforcement haircut): ~$59.5 billion.

  • Double-stress (−20% markets & −15% haircut): ~$47–51 billion.

Global modeling for the G20 suggests a 2% billionaires minimum tax would raise $200–$250 billion annually worldwide—consistent with the scale implied by U.S. estimates. Gabriel Zucman | Professor of economics

7) Humanitarian Aid Stability Fund (HASF): Guardrails & Governance

  • Structure: Treasury account with statutory first-call transfer of $9 billion each FY to USAID/State humanitarian lines (sub-allocations set by Appropriations).

  • Stabilizer: Three-year rolling reserve target of $12–18 billion to cover downturns.

  • Transparency: Quarterly public reports (collections, fund balance, transfers); GAO audits; Inspector General oversight.

  • No crowd-out clause: Wealth-tax funds supplement, not supplant, base humanitarian appropriations.

8) Economic Effects & International Experience

  • At 1%, with a narrow base (billionaires only) and modern information reporting, expected distortions are modest. OECD work emphasizes that design (reporting, valuation, base breadth) is the driver of administrative success, not merely the label “wealth tax.” OECD

  • Europe’s mixed history reflects high rates and narrow/porous bases; today’s surviving models (e.g., Switzerland, Spain, Norway) show operational feasibility—useful lessons, not templates. Tax Foundation

9) Interactions with Philanthropy & Capital Formation

  • Philanthropy: Charitable transfers reduce wealth and thus liability organically—no new deduction needed. To align incentives with the policy’s purpose, Congress may cap a non-refundable credit up to 25% of annual wealth-tax liability for verifiable, arm’s-length contributions to qualified humanitarian organizations; cap prevents wholesale erosion of the base.

  • Investment: For founders with illiquid stakes, offer deferral with interest (e.g., AFR+200 bp) secured by liens/escrow; mandatory pre-payment on liquidity events.

10) Implementation Timeline

  • Year 0–1 (Setup): Stand-up IRS Wealth Tax Unit; finalize valuation safe harbors; build 1099-W reporting; issue regs and FAQs.

  • Year 1 (Assessment): First valuation date at year-end; initial filing due the following Oct. 15 with electronic asset statements.

  • Year 2 (Collection): Begin HASF transfers monthly (pro-rated) once collections commence; backstop with a one-time seed transfer from general revenues repayable from first-year receipts.

11) Legislative Outline (Sketch)

  1. Definitions & Scope (covered taxpayers; residency; aggregation rules).

  2. Tax Imposition & Rate (1% over $1 billion; two-year averaging).

  3. Valuation (public mark-to-market; private safe harbors; elections; substantiation).

  4. Information Reporting (1099-W; third-party penalties; cross-border exchange).

  5. Anti-Avoidance (trust/look-through; related-party rules; GAAR-style catch-all).

  6. Expatriation (exit-tax mechanics; security interests).

  7. Administration & Enforcement (audits; penalties; interest; appeals).

  8. HASF (automatic transfers; reserve mechanics; transparency; no-crowd-out).

  9. Sunset/Review Clause (five-year independent evaluation).

12) Risks & Mitigations

  • Market volatility: Three-year averaging and HASF reserve smooth revenues.

  • Valuation disputes: Safe harbors + third-party reporting + penalty regime.

  • Migration/avoidance: Exit tax, look-through rules, FATCA/CRS-style data. Elizabeth Warren's Senate Website

  • Litigation: Alternative legal framings (minimum tax / mark-to-market on tradables with deferral charges) offer fallback paths while Moore leaves room for congressional design. Supreme Court

Key Sources (select)

 

david wecal
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