Recap: Wealth is the sum of all assets, minus liabilities and debt. Assets are specific items of value one owns. Liquid assets are cash or “cash-equivalents” - items easily converted into cash without significant loss of value - such as bank accounts, money market funds and stocks (less so for stocks owned by billionaires – see explanation below).
Illiquid assets are investments or properties that cannot be quickly converted into cash without a significant loss in value or a lengthy, complex selling process. Examples of illiquid assets include real estate, private equity, venture capital, collectible art, and restricted securities*. Selling Illiquid assets quickly is hard because these assets rarely have a ready pool of buyers and would likely require slashing prices, leading to substantial financial loss.
So where would billionaires get the cash to pay a wealth tax? Mostly from their liquid assets, which comprise around 31% or their asset holdings, on average (Altrata, 2024, Cato Institute, 2025). See Post I of this series for more details.
Method: I’m ultimately interested in how a billionaire wealth tax would impact the US economy and American people. To answer that question, even tentatively, requires answering a lot of other questions. My method will be to ask AI a question, review AI sources to confirm accuracy of response, and then tweak the AI summary for brevity, neutrality and relevance, occasionally incorporating AI information from related inquiries. I’m using AI in this series, because AI does a decent job of capturing the gist of its source material. However, I don’t assume the source material reflects the whole range of expert opinion on these issues.
Question 3: If the super-rich had to sell of lot of company stock to pay a wealth tax, who would buy the shares?
If the super-rich sold large amounts of stock for a wealth tax, the shares would likely be absorbed by institutional investors (pension funds, mutual funds), sovereign wealth funds, corporate share buyback programs, and the broader, high-net-worth market. Given the immense concentration of wealth—where the top 10% own roughly 90% of stocks—liquidity might be absorbed by other wealthy individuals and institutional managers*.
Institutional Investors: Large-scale sales would likely be absorbed by mutual funds, pension funds, and index funds, which constantly seek to diversify holdings.
Corporate Buybacks: Companies themselves might buy back shares to avoid a depression in stock prices.
Market Absorption: Because the top 1% hold about half of all corporate equities, a sale of this magnitude would be redistributed among the remaining top 10% of investors and global investment entities, rather than shifting entirely to retail investors.
Sources: Tax Justice Network, 2024, Institute on Taxation and Economic Policy, 2025, Poole College of Management / North Carolina State University, 2024.
Take-Away: There will likely be a market for however much stock billionaires have to sell to pay a wealth tax, assuming the tax is not so high that the market is flooded with sell orders and the tax itself doesn’t scare off investors. The question for me is whether the companies would change as a result of the new mix of investors and if the changes would benefit the companies and the US economy.
Next Question: How do the investment strategies of the super-rich differ from other types of investors? (and then, later: how do investment strategies impact company and economic growth?
—
* The original AI summary listed “wealth tax trusts” as potential buyers of stock, a suggestion of the Tax Justice Network. The idea is that the US government would own the trusts, which could accept stock in-kind, holding them in a trust rather than forcing an immediate market sale. However, since government-owned wealth tax trusts don’t actually exist, I left out this option. I also eliminated reference to the “Treasury potentially managing the influx of assets to maintain market stability”, because its source was addressing a wealth tax on corporations, not individuals.