Wealth tax or stealth tax?
by Chuck Flint · The Washington TimesOPINION:
One hundred billion dollars for IRS enforcement: That is what a congressional proposal wants to hand the IRS, and it is only the beginning.
There is a movement to tax money you have not made, on assets you have not sold, and to use a turbocharged IRS to collect it. We are told it is about making the ultrawealthy pay their fair share. History tells us who actually pays when the IRS is given more power.
Sen. Elizabeth Warren, Massachusetts Democrat, is the primary driver of the crusade to realize unrealized gains. Her “Ultra Millionaire Tax of 2026” targets taxpayers with a net worth of $50 million or greater and relies on class warfare language that plays to the emotions of Americans so they do not pay attention to the fine print.
Ms. Warren says the ultrawealthy “rig” the system, and she pledges to “level the playing field.” Her plan involves arming the IRS with $100 billion.
If this sounds familiar, then it is because it is a move straight out of the Inflation Reduction Act playbook. The Inflation Reduction Act gave $80 billion to the IRS to hire more than 87,000 employees. Congress has since clawed back more than half of it.
Now, Ms. Warren is back to give the IRS more.
Ms. Warren — whose April 2025 Senate financial disclosure valued her assets at more than $8 million — is not subject to her own tax. Ironically, she purports to be doing this to fix a rigged system. If the government can tax your unrealized gains, can you deduct unrealized losses? Will the IRS send you a check if your portfolio drops 30%?
Taxing unrealized gains will require IRS agents to appraise the value of everything you own, at their discretion and on their timeline. They are already invited into your bank accounts, but if you are a farmer, they will be coming to your barn door. That land in which your money is tied up will be arbitrarily appraised.
Advertisement Advertisement
What happens if your wealth fluctuates? Bitcoin was trading at $125,835.92 on Oct. 6, 2025. Five months later, it was trading at $60,000. Under an unrealized gains tax, you owed the IRS on the peak. The collapse is your problem. You are stuck with the gain but cannot do anything to offset your loss.
Apparently, that is leveling the playing field — just not for taxpayers.
Some 63% of new IRS audits targeted middle-class filers in 2023 (taxpayers making $200,000 or less), according to a Treasury Inspector General report cited by The Wall Street Journal. The IRS shifted focus under political pressure. It always does and always returns to form. The IRS can be in your life forever. Once it is there, it will never leave.
Small-business owners face a more acute threat. Most have the bulk of their wealth tied up in their businesses. It is illiquid, privately held, and its value is not set by a stock market. An annual mark-to-market appraisal would force these business owners to pay taxes on paper appreciation they cannot access or sell equity in their own company to satisfy the IRS.
That is not a tax on wealth. That is a tax on the act of building something. The person who spent 20 years growing a business is not a billionaire sitting on stock options. He is likely a middle-class taxpayer with a gym membership and a Netflix account (those might be next).
Advertisement Advertisement
This is not a progressive fantasy. Look no further than New York City. There, Mayor Zohran Mamdani campaigned on taxing the wealthy. His opening budget move was threatening a 9.5% property tax increase on every homeowner in the five boroughs. When New York Gov. Kathy Hochul balked, Mr. Mamdani held the middle class hostage until Ms. Hochul handed him a $4 billion bailout.
Citadel CEO Ken Griffin, whom Mr. Mamdani targeted by name, is leaving anyway. At the state level, Americans can move.
There is no such escape from the federal government. Ms. Warren’s bill would include a 40% exit tax on anyone who renounces citizenship to avoid it. You can run, but you cannot hide.
Seventy percent of Americans already believe they pay too much in taxes. Congress must stop this now, before the enforcement structure is built and the IRS army is hired. The American taxpayer simply cannot afford to wait for Washington to fix a problem it created.
Advertisement Advertisement
• Chuck Flint is the CEO of the Alliance for IRS Accountability.