“I’m interested in how things work,” Galle added, “and right now, it [capitalism] doesn’t seem to be working well.” Speaking to Fortune about his forthcoming new book, How to Tax The Ultrarich, Galle said one of its central arguments is that domination by a small number of families leads to “bad economies” that grow more slowly and often have crippling inflation and stagnation.
Galle, who recently moved to California after a decade at Georgetown Law, helped write the legislative text for the wealth tax bill introduced by Assemblymember Alex Lee to address the state’s significant budget deficit, something the press (including Fortune) called “the billionaires tax.” While previous versions of the bill received little notice, Galle said he believed this one drew intense scrutiny, especially from ultrawealthy Californians, because it actually has a “pretty good chance of passing.”
The main thrust of Galle’s book, of course, is the “how” to make this actually happen. The California billionaires tax is really just a one-off, for one state with a $100 billion funding gap, he explained. He (and his co-authors) see a federal-level solution, explained in detail in his forthcoming book, called “FAST.”
Under the FAST plan, the government would wait until wealthy individuals sell their assets to tax them, complying with likely Supreme Court requirements. However, the government would charge an interest rate that retroactively eliminates the financial benefit of delaying the sale. By charging an “economically accurate rate of interest,” Galle argued, the plan removes the incentive to hoard assets to minimize tax bills, encouraging the wealthy to sell sooner (this also explains the “FAST” title). This measure would apply only to the top tier of wealth holders, likely those with more than $30 million in assets.
FAST also tackles the cost basis step-up by replacing the estate and gift tax system with an extra tax bracket for inherited property, “in effect switching to an inheritance tax and carryover basis at death, but again with extra interest charges for taxpayers who delay sale.” This would solve both problems with one fell swoop, he explained.
Galle acknowledged that the Supreme Court signaled with the 2024 Moore ruling that it may not permit taxing unrealized gains, and explains that his proposal is designed in accordance with what is likely to be legal. But he insisted that these proposals should be seen not as a way to punish success, but as essential maintenance for a capitalist system that is currently skewed by “disproportionate billionaire power.” He argued that functioning capitalism requires a “fair, functional tax system” rather than the current setup, which allows the wealthiest to opt out of paying their share. While he admits there are no “magic wands,” Galle insisted that the current tax code is making economic inequality worse, and incremental progress is vital to restoring a healthy economy.
