An experiment using ChatGPT shows that making billionaires pay taxes at the same rate as average Hawaiians (around 14%) would generate billions in additional revenue, but the actual impact is far more complex than simple math suggests. The AI’s analysis reveals a mix of potential gains, behavioral responses, and political hurdles that shape the true outcome.
The Hawaii Tax Baseline
Hawaii residents face some of the highest combined state and local taxes in the U.S. — roughly 14% of income. Applying this rate to billionaires’ earnings, according to ChatGPT, could yield substantial revenue. However, the calculation hinges on how billionaires make money. Wealth sitting in assets (stocks, real estate) isn’t taxed until sold or realized as income, creating a major accounting difference.
The AI modeled two scenarios:
- Conservative (1% wealth realization): If billionaires convert just 1% of their $5.5–6.6 trillion in wealth to taxable income yearly, that’s $55–66 billion. At 14%, this generates $7.7–9.2 billion in taxes annually — an extra $6.6–7.9 billion compared to current estimates of around 2% effective rates.
- Higher (5% wealth realization): A 5% conversion yields $275–330 billion in taxable income, resulting in $38.5–46.2 billion in taxes. This would bring in $33–39.6 billion more than billionaires currently pay.
Real-World Complications
These figures assume billionaires passively accept higher taxes. The AI predicts otherwise. Tax avoidance would surge: wealthy individuals would use sophisticated strategies to defer income, shift assets, or structure deals to minimize liabilities.
“Higher statutory rates typically increase avoidance efforts unless enforcement and law design get tightened simultaneously.”
The AI also notes that taxing income is easier than taxing wealth directly. A 14% wealth tax, while potentially generating hundreds of billions, would face severe legal challenges. More feasible options include raising capital gains rates or increasing top brackets.
Money and Priorities
The projected billions could fund significant programs: childcare, housing, climate initiatives, or deficit reduction. For context, $35 billion annually isn’t transformative compared to total federal spending but could make targeted improvements.
Political and Legal Obstacles
The AI doesn’t shy away from the political reality. Any attempt to raise billionaire taxes would trigger immediate litigation, lobbying, and media backlash.
“Billionaires and their companies have political influence; policy would likely face litigation and strong lobbying.”
The Bottom Line
Making billionaires pay Hawaii-level taxes on their income would raise billions (potentially $7–40 billion annually), but enforcement, avoidance, and legal battles would diminish the actual revenue collected. Taxing wealth directly is even more difficult and faces steeper political resistance.
The AI suggests that while increased revenue is likely, it won’t fundamentally reshape government finances. The real outcome would be a complex interplay of policy, economics, and political forces.
