It'd be pretty easy to levy completely fair and progressive tax structure that only directly impacts the wealthy, and is sufficient to cover the spending.
- Tax capital gains >1m a year as regular income.
- Fix loopholes that allow for equity as collateral for perpetual loans without ever selling the underlying.
- Remove step up in cost basis on inheriting assets.
- Tax stock buybacks at same level as dividends.
- Don't bring back SALT deduction.
Pretty easy to justify. Why should capital gains get favorable tax treatment over income, especially for wealthy who have this as a primary income source? Overall, proportion of assets allocated to investment capital would not dip due to change in tax, where else would they put the money?
Buybacks are effectively a technique to consolidate wealth primarily for the CEO and board of a company, who are paid primarily in equity comp. Very few companies do buybacks for legitimate operational reasons, like purchasing stock when it's undervalued to reduce operational expenses re dividends. It's mostly a buy at any price to juice valuations. I'm not against companies returning money to shareholders, but buybacks shouldn't be tax advantaged vs dividends.
SALT is a direct handout to wealthy homeowners. The fact that this is even in the spending bill shows how far the narrative of fixing wealth inequality has deviated from the actual legislation.
I suspect Congress doesn't do these things because it would actually impact their own finances. And of course they need unilateral agreement on any approach.