Class disparity is a hot topic that shows no signs of cooling down in public consciousness. From politicians to people on TikTok, everyone has an opinion about the role the super-wealthy should play in society — with much of the conversation focusing on the tax rate billionaires should be obligated to pay.
Learn More: I Asked ChatGPT What Would Happen If Billionaires Paid Taxes at the Same Rate as the Middle Class
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That chatter made me wonder: What would happen if billionaires paid taxes at the same rate as gig workers?
Looking for a quick and broad overview, I turned to ChatGPT and asked it directly: What would happen if billionaires paid taxes at the same rate as gig workers?
AI wasted no time in responding.
“If billionaires paid taxes at the same effective rate as gig workers (who often pay a relatively high percentage of their income in taxes due to self-employment taxes and limited deductions), the economic, political, and social impacts would be significant,” ChatGPT wrote.
Then it gave me a breakdown of what might happen.
Increased Government Revenue
The first point ChatGPT made was that billionaires often pay lower tax rates than many middle- and low-income workers.
It attributed this discrepancy to “preferential treatment of capital gains (usually 15% to 20% vs. up to 37% for wages),” as well as “use of tax shelters, loopholes, and deductions.”
Conversely, gig workers — like ride-share drivers or freelancers — can pay between 30% and 40% of their income in combined federal, state and self-employment taxes.
So, what would happen if billionaires were taxed at a similar rate? ChatGPT said the U.S. government “could collect hundreds of billions in additional revenue over a decade.”
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Redistribution and Public Investment
ChatGPT next postulated what the government might do with that additional revenue from the ultra-wealthy. It even listed areas where the funds could be allocated:
- Universal healthcare
- Education (such as free community college)
- Infrastructure (clean energy, public transit)
- Social programs (child care, housing, food assistance)
It noted that a financial lift in these areas “could reduce inequality and improve overall economic mobility.”
Reduction in Wealth Inequality
Using the example that “the top 0.1% of Americans hold more wealth than the bottom 80%,” ChatGPT suggested that adjusting tax rates could help rebalance this inequity.
It outlined several possible outcomes:
- Slowing the concentration of wealth at the top
- Strengthening the middle class
- Narrowing the wealth gap between racial and economic groups
While this is a broad assessment, it’s worth noting that outside organizations — like Oxfam — also argue that a wealth tax could reduce the wealth gap among working families while generating funds to address issues like the climate crisis.
However, groups like the Peter G. Peterson Foundation caution that a wealth tax may not be the simple, sweeping solution ChatGPT makes it out to be.
In an article debating the fairness and feasibility of a wealth tax, the foundation wrote:
“Enforcing a wealth tax is further complicated by the need for IRS auditors to assess the value of a wealthy household’s financial and non-financial assets like yachts, paintings, homes, etc., which is likely to involve a degree of subjectivity and dispute.”
Potential Economic Trade-Offs
ChatGPT also acknowledged that taxing billionaires at the same rate as gig workers could come with economic trade-offs. It listed several common concerns:
- Capital flight risk: Some billionaires might move assets abroad or relocate to lower-tax countries.
- Investment slowdown: Critics argue that taxing capital at higher rates could reduce business investments.
- Behavioral shifts: More complex tax strategies or lobbying against reforms.
As a caveat, ChatGPT noted there’s debate among economists about how serious these effects would be. Some argue many billionaires wouldn’t give up U.S. citizenship or stop investing entirely. It added that “productive investment is driven more by demand than by after-tax returns alone.”
Still, when the Peterson Foundation examined whether wealth taxes were successful in other countries, it found underwhelming results: “The revenues raised from wealth taxes in those countries represented relatively modest proportions of their total revenues.”
Political Shifts
ChatGPT was blunt in its assessment that this kind of tax change would require “major political will,” likely sparking opposition from wealthy donors, corporations and some lawmakers — even as it could intensify the larger debate around economic fairness.
Bottom Line
ChatGPT was useful in creating a broad set of talking points that helped me understand this debate a little better. Still, instituting a tax change of this magnitude wouldn’t be as easy as it seems — and in real life, it might not have the sweeping impact supporters hope for.
As always, it’s best to use ChatGPT as a springboard into your own research.
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This article originally appeared on GOBankingRates.com: I Asked ChatGPT What Would Happen If Billionaires Paid Taxes at the Same Rate as Gig Workers
