Short answer: it depends on your goals and on what you mean by “rate.” If your top priorities are reducing inequality and raising revenue for public goods with limited impact on growth, then yes—there’s a strong case for higher effective tax rates on very high incomes and large fortunes. If you prioritize minimizing behavioral responses (avoidance, shifting, migration) or think government should stay smaller, you’ll lean no. Most economists would say the details matter more than the headline rate.
How to think about it
•Define “wealthy”: top 1%? 0.1%? Billionaires? Policy effects differ a lot across those groups.
•Define “rate”: marginal vs average (effective) rate; income vs capital gains/dividends; corporate vs personal; estate/wealth taxes.
•Objectives trade off: equity and revenue vs efficiency, innovation, and compliance costs.
What the research broadly suggests
•Raising statutory top marginal income tax rates alone often yields modest revenue because much top-end income is capital-based and highly mobile in the tax code (avoidance, timing, shifting).
•Effective progressivity rises more reliably when you broaden the base and target capital-income preferences, not just when you raise the headline rate.
•Migration responses are a bigger issue across states than at the national level; internationally, the very wealthy can move some capital and sometimes themselves, but policy design and enforcement materially reduce this risk.
•Reasonable people disagree about the “optimal” top rate; estimates vary widely because they depend on values (how much weight you place on top earners’ consumption) and on behavioral responses that are policy-sensitive.
If you do want the wealthy to pay more, designs that work better than simply hiking the top wage rate
•Narrow preferential rates on capital gains/dividends for ultra–high incomes; curb income re-labeling and require longer holding periods for preferences.
•Limit step-up in basis at death or tax gains at death with safeguards for illiquid businesses; tighten estate/gift tax valuation rules.
•Strengthen auditing/info reporting (pass-throughs, trusts, and complex shelters); stable enforcement funding reduces avoidance without touching statutory rates.
•Minimum tax backstops for very high-income households that face low effective rates due to preferences and timing.
•Close well-known loopholes (e.g., carried interest recharacterization, aggressive pass-through loss uses) and coordinate with corporate/individual rules to avoid arbitrage.
•Make any rate hikes temporary or contingent (e.g., surtaxes above very high thresholds) if you’re worried about investment sensitivity.
If you don’t want higher rates, but still want fairness/revenue
•Broaden the tax base while keeping top rates similar: fewer exemptions/deductions, better enforcement, and simpler rules.
•Shift toward consumption taxation paired with rebates/credits to protect low- and middle-income households.
•Focus on pro-growth public investments with high returns so the same (or lower) rates fund more over time.
Practical bottom line
•If your goals are more revenue and lower wealth inequality with limited growth drag, raising the effective tax burden on very high incomes and large unrealized gains—mainly by tightening preferences and enforcement—likely dominates a big across-the-board top rate hike.
•If your goals are simplicity and growth, keep top rates roughly where they are and pursue base-broadening and enforcement instead.
If you share your priorities (e.g., revenue target, who counts as “wealthy,” which taxes you mean), I can outline a concrete package consistent with them.