DSA Challenge: Not Enough Rich People

There aren’t enough rich people to tax to fund what Democratic Socialists of America candidates are promising.

When the DSA says "tax the rich," they want us to think of guys like Thurston Howell III, the "Gilligan's Island" millionaire with the condescending upper-class accent.

They want us to think the rich have the finest clothes, homes and cars — and gobs of money that can be confiscated to fund their new government-program dreams.

But that just isn’t so.

According to "The Millionaire Next Door" by Thomas J. Stanley and William D. Danko, 80 percent of America's millionaires were not born millionaires.  

Most are first-generation affluent. They earned their money by providing some product or service that other people need or value enough to pay for.

We might classify some of their businesses as "dull," say the authors: "welding contractors, auctioneers, rice farmers, owners of mobile-home parks, pest controllers, coin and stamp dealers and paving contractors."

Most millionaires get by on an annual income that is only 7 percent of their total wealth.

They typically saved or invested 15 percent to 20 percent of their income.

They aren't speculators, either. They invest for the long term.

They wear inexpensive suits and drive American-made cars. Only a minority drive the current-model-year automobile. Only a minority lease motor vehicles.

"You probably don't see them around much,” write the authors. “Nearly two-thirds work between 45 and 55 hours per week.”

According to the 2026 UBS Global Wealth Report, America now has on the order of 24 million millionaires — if you factor in their paid-off homes and 401(k) savings.

After the nearly 22 percent increase in inflation during the Biden years — and the 5 percent increase during Trump’s 19 months in office — being a millionaire isn’t what it used to be.

You need about $1.30 million today to match what $1 million could buy you in 2020.

Put another way, $1 million that sat in a bank account since 2020 now has the buying power of about $770,000.

Sen. Bernie Sanders and Rep. Ro Khanna’s Make Billionaires Pay Their Fair Share Act would impose a 5 percent annual wealth tax on net worth above $1 billion. Rep. Alexandria Ocasio-Cortez has long backed the same idea.

There are about 1,000 billionaires in the country. Even if you could get the mega-rich to cough up 5 percent of their net worth — good luck with that — you’d generate about $370 billion a year.

That is roughly one-third of the $1 trillion Washington already pays in interest on a $40 trillion debt — a drop in the bucket.

That is why taxing the billionaires usually turns into taxing the millionaires, which then turns into taxing us all.

Socialist New York Mayor Zohran Mamdani understands that concept better than most.

He wants a 2-point city surcharge on incomes of $1 million or more — roughly 34,000 households — to fund his socialist dreams.

Two percent sounds nominal until you realize it is a 51 percent increase on the city tax they already pay.

They already pay 37 percent of all city income taxes — the increase will make them pay about 47 percent of all city income taxes.

He claims the increase would generate an additional $3 billion a year — a drop in the bucket when you consider the city budget is already a massive $126 billion.

Interestingly, New York City’s bloated $126 billion budget is about $8 billion more than the budget for the entire state of Florida — even though the city has 8.6 million people and Florida has 24 million.

Mamdani’s unrealistic projections fail to point out that the New Yorkers he is targeting had already been moving to low-tax states like Florida.

According to the Citizens Budget Commission, New York City’s share of the nation’s millionaires fell from 6.5 percent to 4.2 percent between 2010 and 2022. Had the city kept its old share, it would have collected about $2.5 billion more in income tax in 2022 alone — while Florida’s millionaire count quadrupled during the same period.

Mamdani’s plans will surely accelerate the trend.

Billionaire hedge-fund manager Bill Ackman warns that Mamdani’s “tax the rich” plans will expedite the “flight of businesses.”   

Citadel billionaire Ken Griffin says that shifting jobs to Miami was a “direct consequence” of Mamdani’s tax video, which targeted him personally.

The transformation from broke to financially secure is much easier to accomplish in a state such as Florida, which keeps taxes and regulations reasonably low and lives within its means.

Despite this obvious economic truth, DSA candidates want to turn America into Western Europe — high taxes and lots of government programs — even though that model has lagged on growth.

Consider: Twenty years ago the U.S. and the European Union were in the same economic weight class.

Today, thanks to our pro-growth strategies, the U.S. economy has grown a staggering 50 percent larger than the EU’s.

Personally, I want to live in a country and state that gives every American the opportunity to become the millionaire next door.