The Ultra-Millionaire Tax Act is sponsored by Elizabeth Warren, Pramila Jayapal and Brendan Boyle, with roughly sixty co-sponsors, all Democrats plus Bernie Sanders. Its press release says the money is "to pay for investments like universal child care, free community college, Medicare expansion, and more." Jerry Cayford's proposal is that half of it be pledged to paying down the national debt instead. On the bill's own terms, that is a betrayal. On Cayford's, it is the only way any of it ever passes.
The number behind his argument is forty trillion dollars. The national debt has passed that mark, is now larger than GDP, and its interest consumes a quarter of the federal budget — more each year than social security, more than the military, more than Medicare. Interest alone costs more than comfort, protection or health. That is not a left-wing talking point. It is the traditional property of the fiscal right, which is why Cayford thinks it can be traded with.
But put that trade next to Wolfgang Streeck and the picture changes. Streeck's claim is that beneath the "polycrisis" of the rich world sits a long-simmering fiscal crisis of the state: the growing demands placed on society by contemporary capitalism clashing with the declining ability of democratic politics to secure the resources to meet them. The demands are not exotic. For Germany he lists stagnant growth, deteriorating railways and bridges, a housing shortage and rising urban rents, failure to adapt to climate change, no immigration policy to offset an ageing population and falling birth rates, decay in primary schools, indebted municipalities, rising inequality — single mothers worst hit — and a general anxiety about cuts to services that are becoming harder to finance.
Beneath the 'polycrisis' of the rich world sits a long-simmering fiscal crisis of the state.
Every government, of any coalition, faces roughly that list. All of it, Streeck says, is the product of latent austerity and a failure to invest in public goods. The promises leaders make about it are impossible to keep before the next election. And one consequence is the parallel rise, across all the affected countries, of new-model opposition parties threatening to displace the ageing postwar ruling parties.
The mechanism is not recent. Since the 1970s a widening gap opened between the overhead costs of capitalism — R&D, human capital, environmental cleanup, the social wage that buys legitimacy — and what capitalist firms are willing or can be compelled to contribute. Taxing workers further endangers the work ethic and the patriotism; taxing capital further is hard because globalization and financialization let capital vanish when the tax authorities call. So the advanced states borrowed from the deregulated financial sector, cumulatively rather than cyclically, to satisfy both classes according to their bargaining power.
This suited capital owners, who can live very contentedly with government debt. When the state needs to borrow, it turns to people who would otherwise have paid that money in tax. They hand it over temporarily; it remains their private property, the state holds it safely and pays a competitive interest rate, and they can bequeath the claim. Three decades of tax cuts for business and high earners followed. Streeck's sequence runs from tax state to debt state to consolidation state, and in Germany the reckoning arrives with the Merz government's "special funds" for infrastructure above the constitutional debt limits, and an open-ended defence budget.
Now set the K-shaped economy on top. Piketty, Saez and Zucman put the top 1 percent's pretax income share at roughly 10 percent in 1980 and 22 percent today; the same top 1 percent's share of wealth went from about 20 percent to 32 percent. Saez and Zucman with two colleagues found that the wealth of the 400 richest Americans rose from 2 percent of GDP in 1982 to 20 percent in 2025. Nineteen households — nineteen — added a trillion dollars in 2024. The bottom 50 percent of households saw their share of national wealth fall from 3.4 percent to 2.6 percent between 1989 and 2024. CEO pay went from about 20 times the median worker in the 1960s to well over 200 times. Three hundred billionaires supplied 19 percent of all contributions to House, Senate and presidential campaigns in 2024.
The tax proposals are an attempt to catch up with that. Washington state's Democratic legislature passed a 9.9 percent income tax on earnings above $1 million; Rhode Island's governor proposed 3 percent above the same threshold; New York State lawmakers advanced 0.5 percent above $5 million, less than Mayor Zohran Mamdani's 2 percent above $1 million. California volunteers are gathering signatures for a one-time 5 percent wealth tax on billionaires, and San Francisco and Los Angeles for municipal measures taxing corporations whose CEOs out-earn their median workers by 100 times or 50 times. In Congress, Sanders and Ro Khanna have a billionaire wealth tax; Chris Van Hollen would end income tax below $46,000 for individuals and $92,000 for couples; Cory Booker would double the standard deduction.
The Massachusetts precedent matters more than any of the federal bills. In 2022 the state passed a 4 percent tax on income over $1 million by ballot. The wealthy did not leave en masse. The revenue funded free breakfast and lunch for all students. Mamdani has cited it in New York. And the blue states are moving at once, which means no single one can be cast as uniquely anti-business — the Wall Street Journal's headline was that red and blue states are growing further apart on income tax. Miles Trinidad and Matthew Gardner of the Institute on Taxation and Economic Policy write that income tax levels have little impact on where the wealthiest taxpayers choose to live, because the rich don't need to consider cost of living and typically have business and family ties holding them in place.
Gavin Newsom and Kathy Hochul oppose their states' provisions on the usual grounds that the rich will flee. Howard Schultz has announced he is moving to Miami; Google's founders are leaving California. But Washington's current tax structure, per ITEP, has the poorest fifth of families paying 14 percent of income in taxes and the wealthiest 1 percent paying 4 percent. That is the status quo the governors are defending.
The international half of the story is worse. Stiglitz and Ghosh describe a global program to replace democratic governance with rule by the extremely wealthy — 21st-century Caesarism, in their phrase, invoking Spengler's "forces of dictatorial money-economics." At the OECD/G20 Inclusive Framework in January, more than 145 countries agreed to give big US multinationals a free pass. American energy, technology and pharmaceutical firms, after intensive lobbying, secured sweeping exemptions from the 15 percent global minimum tax agreed in 2021 after a decade of negotiation. G7 leaders pre-negotiated the terms in June under threat of US retaliation, and the Inclusive Framework rubber-stamped them.
Against that, France's proposed 2 percent minimum tax on the ultra-rich, associated with Gabriel Zucman, commands almost 90 percent public support even after the National Assembly rejected it. Tunisia approved a 0.5 to 1 percent levy on the worldwide assets of residents holding more than $1 million. The African Union is championing a UN Framework Convention on International Tax Cooperation, with a framework and two early protocols due for General Assembly approval in 2027. The current rules for taxing multinationals were devised in the 1920s.
Cayford's wager is that a wealth tax can survive only if it is not spent on the priorities of the party that passes it. Streeck's is that the fiscal crisis outruns any such arrangement either way. The gap between them is the real subject. Not whether the rich should pay more, which majorities including a majority of Republicans already accept, but whether democratic politics retains the capacity to make them — or whether, as Streeck put it, the outcome is capitalism or democracy.