If America Taxed Billionaires One Extra Percent, How Much Could the Average Household Gain?
Written by
Jordan Rosenfeld
Edited by
Molly Sullivan
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When the average U.S. household is struggling with increased costs of living, it’s hard not to cast an eye toward the extreme wealth held by billionaires and imagine how their money could be shared with the masses.
While a universal tax on billionaires of even an additional 1% is unlikely to happen, we did a thought experiment to imagine how much the average household would gain if the U.S. taxed its billionaires an extra percent and that money could be shared with Americans.
How Much Wealth Do US Billionaires Have?
The 400 richest Americans hold a collective net worth of about $6.6 trillion, according to Forbes. One percent of that total equals roughly $66 billion. Spread across approximately 130 million U.S. households, based on Census and Federal Reserve estimates, that amount would come out to about $508 per household per year.
What That Actually Means for Households
On a monthly basis, $508 works out to roughly $42 per household. That could help cover a small grocery trip, part of a utility bill or be added to savings or retirement accounts where it could grow over time through compounding. Still, it is not a life-changing sum for most families.
Why This Often Surprises People
Billionaires hold enormous wealth, but the U.S. population is also very large. Once redistributed widely, even tens of billions of dollars thin out quickly. That’s why policy debates often focus less on whether to tax billionaires and more on how any new revenue would be used, whether the taxes would be recurring, and who would actually receive the benefits.
Being strategic about it could make a difference. For example, if $50 billion were distributed only to lower- and middle-income households rather than to all households, the per-household benefit would rise substantially, potentially doubling the impact without raising additional revenue.
Taxing Billionaires Alone Won’t Fix Wealth Inequality
An extra 1% billionaire wealth tax may sound massive, but for the average household, it would not amount to a financial overhaul. On its own, it would also do little to address long-term wealth inequality. In practice, several existing tax credits and benefit programs already deliver more meaningful support to eligible households than a broadly distributed wealth tax would.
- Child Tax Credit:
The child tax credit is currently worth up to $2,200 per qualifying child under age 17. For families with two children, that can mean up to $4,400 per year, which is far more than the roughly $500 per household an evenly distributed billionaire tax would provide. - Earned Income Tax Credit (EITC):
The EITC provides targeted support to low- and moderate-income workers, with benefits ranging from several hundred dollars to several thousand dollars depending on income and family size. Because the credit is focused on households with tighter budgets, the impact would be more noticeable than a small universal payment. - Other Dependent Credit:
Households supporting older dependents who do not qualify for the child tax credit may be eligible for the other dependent credit, which can help offset caregiving and household costs. - Healthcare subsidies and cost reductions:
Programs that reduce healthcare premiums or out-of-pocket medical costs often save eligible households thousands of dollars per year. Because these policies lower unavoidable expenses rather than adding income, they would feel more valuable than modest cash bonuses. - New Deductions and Tax Breaks:
Beyond direct credits, One Big Beautiful Bill Act tax policies provide new deductions and tax breaks. These include a deduction for qualified overtime pay, allowing workers to deduct the portion of overtime compensation above their regular rate, as well as a new deduction for interest paid on certain personal auto loans for vehicles assembled in the United States. These provisions apply for tax years 2025 through 2028 and are subject to income limits.
Finally, while some of these tax changes don’t directly send checks like refundable credits, they can reduce costs in ways that feel as valuable as cash. Lowering annual tax burdens can help households keep more of what they earn.
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