The Ultrawealthy Are Sitting On $8.5 Trillion In Untaxed 2022 Profits: Report

Thanks to a tax code slanted toward billionaires and centimillionaires, the government is missing out on huge sums that could help fund critical programs.

Americans worth more than $100 million sat on a whopping $8.5 trillion in untaxed profits in 2022, a report released Wednesday found — money that may never be taxed unless Congress closes a loophole shielding the investments of the ultrarich.

These centimillionaires and billionaires made up just 0.05% of all American households in 2022, according to Federal Reserve data analyzed by the progressive nonprofit Americans for Tax Fairness. But they held one-sixth of so-called unrealized capital gains in the country.

Unrealized gains are the primary source of income for many elite families. Under current law, growth in the value of assets like stocks, bonds, investments, real estate or businesses is not taxable until they are “realized,” or sold. The ultrawealthy can nonetheless live off these gains by taking out low-interest loans against their exorbitant wealth. And when their fortunes become inheritances, the gains are no longer taxable.

“The superrich truly live in a strange and privileged world,” said David Kass, the executive director of Americans for Tax Fairness. While most households depend on paychecks — “income that is taxed all year, every year,” Kass noted — these untaxed gains make up the largest single source of income for the ultrawealthy.

“The scandal of tax-free billionaires,” Kass added, also results in billions of dollars less in tax revenue that could fund health care, housing, education and other public programs.