The federal tax fight is not about whether politicians want more money. It is about a tax code that lets capital slip through side doors while spending barrels through the front entrance. Ted Jenkin’s “Forget paying your ‘fair share’ of taxes. Here are 5 ways politicians want even more” on Fox News lists higher top brackets, capital gains taxed as ordinary income, wealth taxes, estate taxes, and surtaxes as five new assaults on taxpayers who already pay “enough.” He is right that “fair share” is a blank check. He is wrong to pretend the only question is how much more labor should pay while capital’s carve-outs remain politely out of frame.
Start with Jenkin’s 40 percent figure. The IRS reports that the top 1 percent paid roughly 46 percent of federal individual income taxes in 2022, a number often rounded to 40 percent in political arguments. That part is true. It also tells you one slice of the tax story while pretending to be the whole pie.
Federal individual income taxes are not the only money the government collects. There are payroll taxes, corporate taxes, excise taxes, estate taxes, and everything else that arrives through a different door. Payroll taxes fall hardest on wage income and stop at the Social Security wage base, which was around $168,600 in 2024 and rises with indexing. A nurse and a hedge-fund manager both pay the 6.2 percent Social Security tax on their first $168,600 of wages. The manager pays nothing on the next $50 million.
That is not a rounding error. It is a design choice.
When Jenkin says the top 1 percent “already pay enough,” he is measuring the burden on one dial while hiding the others. The tax code has been quietly rewritten so that capital pays less than labor in precisely the places where the difference matters most. “Fair share” becomes a moving target when one side is asked to pay through a wage stub and the other gets a menu of realization rules, trusts, valuation discounts, corporate forms, and inherited basis.
Here is the honest concession: Jenkin’s complaint about moving goalposts has merit. “Fair” is not a tax policy. Anyone who uses the phrase without naming a rate, a base, and a spending target is waving a blank check over the reader’s head. Congress writes the rules. Taxpayers who follow those rules are not villains for doing so. If lawmakers dislike a deduction or loophole, they should close it instead of moralizing at the people who used it.
Now let’s talk about what the rules actually do.
Jenkin warns that taxing capital gains at ordinary income rates would change investor behavior. Correct. People respond to incentives. They delay sales, move money, move themselves, and look for friendlier jurisdictions. Ask London.
But the warning is not an argument for treating every dollar of investment income as sacred. Qualified dividends and long-term capital gains are already taxed at preferential rates: 0, 15, or 20 percent, depending on income. A surgeon earning $700,000 from her practice can face the 37 percent top bracket on the next dollar. The investor next door whose stock sale or business-sale gain produces the same $700,000 may pay 20 percent.
Same dollar. Different rate.
Capital gains are not free money. A gain may reflect money that was already taxed, risked, and invested in a business. Taxing it again can create real distortions. Corporate income can be taxed once at the company level and again when distributed through dividends. Sell the company, and the proceeds may face another layer. An estate can then face a tax on what remains. The line between legitimate taxation and confiscation is not imaginary, especially when the same economic value is taxed three or four times over one lifetime.
But “capital was taxed once somewhere” is not a defense of every capital gain. Much appreciation is never taxed at all. Step-up in basis resets the cost basis of inherited assets to their value on the date of death. Decades of appreciation in a stock portfolio or family business can pass to heirs without ever being taxed as a capital gain. By some estimates, the revenue lost through step-up alone exceeds what the federal estate tax brings in.
The estate tax is the most defensible in theory and the most evasive in practice. Yes, the heir did not earn the money. That is an argument for taxing large inheritances. It is not an argument for pretending that every family business is a liquid pile of cash.
The Tax Policy Center puts the share of estates actually owing the federal estate tax at well under 0.2 percent. The exemption has not been chipped away; it has expanded—from roughly $675,000 in 2000, to around $5 million in the early 2010s, to about $15 million today. The scheduled post-TCJA reversion would still leave the threshold around $7 million.
Jenkin’s real warning is about what comes next: rolling the exemption back to where it stood before 2001, under $1 million. That is a serious question. The person who built a plumbing company may have paid income tax, payroll tax, property tax, and capital-gains tax along the way. If the heirs must sell the trucks and warehouse immediately to pay the tax, the business may not survive long enough to employ anyone.
If “fair share” means taxing the same dollar four or five times in one lifetime until the firm must sell its productive assets, that is confiscation wearing a cardigan.
The answer is not to preserve step-up as a permanent escape hatch. End it, or narrow it, while allowing deferral for illiquid family businesses. Let the tax be paid over time or as a percentage of income. Tax the inherited gain at least once without forcing a founder to liquidate the company on the courthouse steps.
Wealth taxes have the same problem in a different costume. Wealth is not cash. Imagine you own a plumbing company doing $8 million in annual revenue. The trucks, warehouse, inventory, and receivables are worth $4 million on paper. You have $300,000 in the checking account. A wealth tax on your $4.3 million net worth is a tax on assets you cannot simply withdraw from the business.
To pay it, you sell the trucks or borrow against them. Selling the trucks means the plumbers may not get to work tomorrow. Borrowing means more leverage, more fragility, and another company waiting for a bailout when the cycle turns. California is about to write the first chapter of that story on its November ballot. We will see how the chapter ends.
Jenkin’s concern is real. A wealth tax that ignores liquidity can force sales, distort investment, and raise less revenue than its advocates promise. The honest response is to design around liquidity with deferral, valuation rules, and payment tied to income. The fact that a tax can be badly designed does not prove that wealth concentration is harmless.
And then there are the “little” taxes. The 3.8 percent Net Investment Income Tax. The 0.9 percent additional Medicare tax. Massachusetts’ millionaire tax. California’s high-income surtax. Each one looks small in isolation. Together they are the marginal rate. A 37 percent top rate can quietly become 50 percent once the add-ons arrive.
Jenkin is right that nobody adds them up out loud. The reason nobody adds them up is that the cumulative rate is the actual policy, and the cumulative rate is unpopular.
But the surtaxes are also patches on a tax base customized to leak. The Net Investment Income Tax targets investment income that otherwise escapes payroll taxes. The additional Medicare tax reaches wages above the Social Security cap. They are not secret second taxes. They are repairs to a first tax structure that tells labor to keep paying while capital finds the side entrance.
There is another cause Jenkin does not want to linger over: spending.
Of course politicians want more money. Political institutions are not famous for discovering a new dollar and leaving it in the ground. But the larger problem is that federal spending has run so far ahead of revenue that every tax debate becomes an argument over who gets soaked next. The national debt’s interest bill is now larger than the defense budget. You can argue all day about whether 39.6 percent or 50 percent is fair. You cannot argue away the fact that spending moves.
When outlays grow 6 percent a year and revenue grows 4 percent, the bracket moves up. The bracket does not decide spending. Spending decides the bracket.
That is why “fair share” is such useful political language. It avoids the number. It avoids the deductions. It avoids the payroll-tax cap. It avoids step-up in basis. It avoids the size of the government the tax code is being asked to finance. It turns a budget problem into a morality play about the people standing nearest to the cash register.
So build something better.
First, write down a number. What share of total federal revenue should the top 1 percent bear? Twenty percent? Forty? Whatever the answer is, put it in the bill. Make the target a law, not a talking point. Count income taxes, payroll taxes, capital gains, corporate taxes, estate taxes, and surtaxes together instead of announcing victory on one dial.
Second, broaden the base and lower the rates where possible. Close deductions. End step-up in basis, with deferral for genuinely illiquid productive businesses. Lift the Social Security wage cap so high earners pay payroll tax on every wage dollar, the way everyone else does. That alone would close most of Social Security’s long-range shortfall, and it is the closest thing to a free lunch in federal budgeting.
Equalize top-bracket rates on wages and long-term capital gains and qualified dividends while preserving lower rates for retirement accounts and middle-income savings. Do not punish ordinary saving while allowing dynastic wealth to disappear through basis rules and trusts. The target is the carve-out, not the plumber’s truck.
Third, pair the revenue side with the spending side. Trade bracket rates for base broadening, then name what the government will stop doing, reduce, or reform. A tax code that has to fund a $7 trillion government will eventually punish somebody every election cycle. Pretending otherwise is not compassion. It is deferred arithmetic.
The “fair share” debate is what you get when spending is untouchable and capital’s escape routes are treated as natural law. The way out is to touch both. Tax the base you can see, at the rate you have named, with the same standard for labor and capital, in service of a budget you have actually confronted.
Anything else is just two words used to take another slice.