Inequality and Taxing the Rich

March 18, 2026

The seeming rise of inequality is a big concern. “Tax the rich” a frequent refrain. Billionaire Warren Buffett once famously said he pays a lower tax rate than his secretary. Bernie Sanders talks as though billionairehood should be disallowed.

There’s a lot of plain old envy. A friend obsesses that Bill Gates just has too much, you’d think it makes her poorer. Indeed, it’s often said the rich “take” their wealth from the rest. But while some may be “robber barons,” the real route to riches has always been creating value for others — goods and services people want or need and willingly buy.

In contrast, zero-sum thinking assumes anyone gains only at someone else’s expense. Forgetting that no transaction happens unless benefiting both sides. Enlarging the pie for everyone. That’s basically how Gates got rich.

So the ultra-rich’s existence is not a problem. Not by itself impairing the well-being of the masses, which should instead be our focus. And in fact, notwithstanding extremes of wealth, ordinary people have become much better off.

For most of our history, nearly everyone was squalidly poor, with very few rich. And practically no economic growth. That’s changed dramatically in the two centuries following the Industrial Revolution. Not only producing economic growth, but spreading it, with mass affluence replacing mass poverty. Compared to the past, today’s inequality is really an inequality of riches. And while it’s said the middle class…