The Tax Pitch That Could Spell The ‘End Of America’

United Airlines CEO Scott Kirby called for a national wealth tax earlier this week, but investment banker and political commentator Lou Basenese warns that taxing wealth could spell the “end of America.” 

Kirby also backed inheritance taxes approaching 100% for certain estates, a separate proposal from a tax on wealth held during a person’s lifetime.

“You can’t do 100% wealth tax because what does it do? Everyone that has wealth will find a loophole to get out of here,” Basenese said. “And everyone that is pursuing the American dream is just going to give up. Why bother? Why work hard today to save for future generations if the government’s just going to confiscate it?”

Kirby did not propose a specific rate for a wealth tax.

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The debate is no longer theoretical in California, where voters will decide in November whether to approve Proposition 40. If passed, the measure would impose a one-time 5% tax on the net worth of qualifying billionaires, with an option to spread payments over five years at an additional cost. California Democrat Gov. Gavin Newsom openly opposes the measure but came out in favor of a national billionaire tax after he failed to keep the state version off the ballot.

According to Basenese, the wealthy aren’t waiting around for the outcome. He estimated that people with a combined net worth of about $1.8 trillion have already left California, and he said millionaires, not just billionaires, are now fleeing too, fearing they will be targeted next. 

He also challenged the idea that the tax would remain a “one-time” levy. “First, they’re not saying it’s one time. They want to do it every year,” Basenese said. “But they want to confiscate all your wealth that might not even be liquid.”

The California measure itself provides for a one-time tax, not an annual levy.

The liquidity problem, he argued, would hit hardest in California’s Silicon Valley, where startup founders’ wealth is often tied to private company stock that they can’t easily sell.

“Guys that are doing startups, men and women, very innovative Americans, are now going to have to pay a wealth tax on paper valuations, right? They don’t have liquidity in the stock because they’re private companies,” he said. “So it’s a total redistribution. And the answer to wealth inequality is broader ownership, not concentrating power with the government.”

Basenese pointed to employee ownership at major tech companies as an example of how capitalism can spread wealth. “Jensen Huang, 25% of NVIDIA’s employees are now millionaires,” he said. “That’s the result of capitalism, not confiscation of wealth like some of these Democrats want.”

European countries have also debated, and, in some cases, abandoned taxes on wealth. France got rid of its wealth tax in 2018 and replaced it with a narrower levy on real estate. Sweden scrapped its wealth tax in 2007. Last year, Swiss voters overwhelmingly rejected a 50% inheritance tax on estates above $62 million. That proposal concerned wealth transferred at death, rather than a tax on wealth during the owner’s lifetime.

Many of the wealthiest Americans, Basenese argued, are already giving their money away voluntarily. He named Warren Buffett, Bill and Melinda Gates, MacKenzie Scott and Michael and Susan Dell. Elon Musk also announced on Monday a plan to give a SpaceX share to every child in America in 2027, a pledge valued at an estimated $10.5 billion. 

“It’s not a zero-sum game where if you make it, you got to take it from someone else,” Basenese said. “The smartest people in America, the best, the ones living the dream, are giving it away in droves. So let them do that, not confiscate it and force it from the government.”

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