# Tax code changes may be more practical than a wealth tax

Markdown copy of https://realalpha.app/s/tax-code-changes-may-be-more-practical-than-a-wealth-tax/ on Real Alpha, the best minutes from long interviews with the people building AI. Cite and link the page, not this copy.

- Speaker: [Neera Tanden](https://realalpha.app/people/neera-tanden/) · Neera Tanden is president and CEO of the Center for American Progress. · Helped found CAP and led Biden’s domestic policy agenda, including prescription-drug cost and insurance initiatives.
- Host: [Ed Elson](https://realalpha.app/people/ed-elson/)
- Host: [Scott Galloway](https://realalpha.app/people/scott-galloway/)
- Show: Prof G Markets
- Episode: [The American Affordability Crisis — ft. Neera Tanden | Prof G Markets](https://realalpha.app/v/hTjxNoxEc6U/), Feb 6, 2026
- Moment: 30:06 to 35:08 of the episode (5 min), playing on https://realalpha.app/s/tax-code-changes-may-be-more-practical-than-a-wealth-tax/; the episode from there: https://realalpha.app/v/hTjxNoxEc6U/?t=1806

## Quote

> “We shouldn't, you know, we shouldn't make it so much easier to have **benefits of capital over labor**. You know, you should reward work.”
> — [Neera Tanden](https://realalpha.app/people/neera-tanden/) at [33:38](https://realalpha.app/v/hTjxNoxEc6U/?t=2018) · Prof G Markets

## Takeaways

1. She sees wealth inequality as a threat to democracy as well as the economy.
2. A wealth tax could face serious legal and enforcement challenges.
3. She favors taxing capital and inheritances more fairly.

## About this segment

Neera Tanden says a wealth tax faces legal and practical hurdles, but argues that inequality also concentrates political power. She points to changes to capital gains, estate taxes and stepped-up basis as more feasible ways to rebalance the tax code.

From “The American Affordability Crisis — ft. Neera Tanden | Prof G Markets”, Feb 6, 2026. [Watch the full episode](https://realalpha.app/v/hTjxNoxEc6U/)

## Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

[30:14](https://realalpha.app/v/hTjxNoxEc6U/?t=1814) I would add one proposal to the lightning round. This has gotten a lot of tension. recently. It's very controversial. It was proposed in California, and that is a wealth tax. Specifically, the one that was proposed in California would be a one-time 5% wealth tax on billionaires. Basically, for those wondering what is a wealth tax, it's just take your net worth and lop off 5%. What do you think of wealth taxes? Do you think they make sense?

[30:46](https://realalpha.app/v/hTjxNoxEc6U/?t=1846) Do you think they will address inequality? What do you make of them? Well, I think it's hard to do at a state level. I will say that. I think the fundamental impetus to me is how you address the inequality in the country. And I want to say a little bit more about that, which is I think we've had an important conversation about inequality for over, you know, 15 years. Piketty's book came out like 15 years ago.

[31:11](https://realalpha.app/v/hTjxNoxEc6U/?t=1871) And I think that we lose sight of how it's a corrosive effect, not just on our economy, but our democracy. I mean, and that billionaires today have the ability to have a billion times wealth of other people is one thing, but they also have a billion times more political power. So I think it is very corrosive. Now, you know, I hate to be a policy wonk here, but there is some concern that a Supreme Court will never approve of a wealth tax because we needed an amendment to even get an income tax.

[31:49](https://realalpha.app/v/hTjxNoxEc6U/?t=1909) So I think to me, the most important question is how do we use, how do we, what ideas can we have, which there are many, to reduce the kind of overwhelming political power and economic power of the very wealthiest people in America. And, you know, I would just also note, you know, if you just look at, say, the 1995 tax code, okay, it was in the heart of the Clinton administration. It had pretty high taxes and the economy was doing very well, okay?

[32:22](https://realalpha.app/v/hTjxNoxEc6U/?t=1942) We were still able to have a tech boom. We had pretty high tax rates on income. We had pretty high tax rates on the highest end and on capital gains. And, you know, we didn't do these three rounds of tax cuts that George Bush did on dividends and all these other things. We're just a wealth of areas that we have cut taxes on over the last 20 to 30 years that we could undo without the Supreme Court.

[32:49](https://realalpha.app/v/hTjxNoxEc6U/?t=1969) court challenge or other challenge that a wealth tax would raise. And so it might be easier to start doing those and see where we'll end up. I mean, yeah, I think this is hitting on what Scott often talks about, which is the difference between being right and effective. And, you know, maybe a wealth transfer fixes things, just a one-time wealth tax, but is it actually going to get done? To your point, probably, almost definitely not. Are you proposing higher taxes in general, just higher tax rates, what are some of the ideas that you think are more likely to happen that would be more effective, more probable than a wealth tax?

[33:31](https://realalpha.app/v/hTjxNoxEc6U/?t=2011) So I think we should start with what our values are, right? Like, I think, you know, we should reward merit in our country. We should ensure that, like, people can rise, et cetera. We shouldn't, you know, we shouldn't make it so much easier to have benefits of capital over labor. You know, you should reward work. So if you like those values to me mean that you would eliminate things like stepped up basis, which is a way in which really wealthy people kind of hide money from taxes and enrich their errors.

[34:10](https://realalpha.app/v/hTjxNoxEc6U/?t=2050) You should have a higher estate tax, in my view. You should have raised capital gains, you know, increase, not lower taxes on dividends. You know, there's just a whole way, there's a whole range of ways the tax code, particularly over the last 30 years, has benefited super wealthy Americans and benefited capital over labor. People are investing instead of people who are, like, working paycheck to paycheck.

[34:37](https://realalpha.app/v/hTjxNoxEc6U/?t=2077) And from my perspective, I think we should start. I mean, like, you know, I think we should have a rich debate about a wealth tax. Sure. But it's complicated. It's really hard to do. It's people can still hide assets and income. And so I think we could just start off making the tax code a lot fairer by unrigging it in many ways that it's been rigged over 30, at least particularly the last 30 years.