In a technological age, labor no longer plays the central role it once did in the nation’s economy. Instead, automation has become more ubiquitous. This economic transformation has important and far- reaching consequences for the nation’s tax system and, in particular, the means by which to fund public expenditures.

Under current law, the central underpinning to automation— namely, capital—yields income that is either lightly taxed or, in some instances, escapes taxation altogether. This puts tremendous stress on the nation’s coffers and further perpetuates wealth disparities. Yet, levying a heavier capital gains tax burden might (i) dissuade taxpayers from realizing their gains and (ii) in a global arena, result in capital flight to lower tax jurisdictions.

Another possibility exists. Congress should impose a meaningful estate tax. Such a tax is essentially the equivalent of a deferred tax on capital income. A reimagined estate tax can help restore fiscal solvency, promote greater wealth equity, foster capital gains recognition, and minimize capital flight risk.