The point isn't whether they should pay a higher tax rate (probably they should!) -- it's whether it would be massively transformative to our society if/when we enacted that. I argue it is not. Pretending it is, is the Marxist fringe's version of the welfare queen or the illegal immigrant murderer that the right-wing people try to bamboozle their base with. We could eliminate all welfare fraud and all immigrant criminals by magic and it wouldn't make our society wildly better. It would be a small improvement.
when they see diminishing returns for increasing their net worth, they might think "hey, maybe instead of using my immense resources to further enrich myself i should do... anything else"
You're correct on the fact that taxing billionaires doesn't generate meaningful revenue. You're wrong that it would prompt a stock-market crash.
If one raised top tax rates in a revenue-neutral way, one would expect it to massively boost the economy and thus the stock market. You'd have unlocked more money for high-velocity spenders.
It certainly would.
Where do you think those billionaires would get the money to pay the tax? It’s not like they have billions of dollars in cash somewhere; they’d sell assets. Those assets are predominately stock. Selling off that much stock at once would absolutely disrupt the markets.
...don't do this.
The combined net worth of America's billionaires is about $7tn. Let's assume half of that is in public stocks. That's $3.5tn. That's about what retail investors alone bought "in the first six months of 2025" [1].
Given the fundamentals of the companies wouldn't have changed, this would be a massive opportunity for institutional investors to deploy capital. (If you didn't do the tax in a revenue-neutral manner, you'd free up tonnes of capital from Treasury demand.)
One might expect a dip in companies where a single billionaire holds a large fraction of the float, e.g. Tesla, Amazon, et cetera. But broadly speaking, these aren't numbers which–even if compressed to a single year, which isn't how you'd pass such legislation–would cause a crash.
There are good arguments against super taxes. Crashing the stock market isn't one of them.
[1] https://invezz.com/news/2025/07/07/retail-investors-defy-hea...
But yeah, the imaginary tax proposals invented in this thread may or may not work out, i wouldn't call anything about them "certain" though