Lagging Growth Leaves Latino Families With A Smaller Piece of the Pie

Latino wealth as a share of national wealth shrank by over  20%  from 2016 to 2025, according to a new analysis by Americans for Tax Fairness (ATF) of Federal Reserve data. The Latino share of national wealth stood at 2.9% in the third quarter of 2016, shortly before President Trump took office for the first time; and at just 2.3% in the third quarter of 2025. If their wealth share had remained constant over that period, Latino families would be a trillion dollars richer today. Latinos make up nearly 20% of the American population. 

“Latino families’ declining share of national wealth is a clear signal that the Trump-GOP economy favors the billionaire class—who are almost exclusively white,” said David Kass, ATF’s executive director. “Trump’s tax giveaways to billionaires and big business have failed the working and middle class while hurting Latino communities and enriching elites at the expense of the vast majority of Americans. To reverse this trend and build wealth in Latino and working-class communities, we must unrig our tax system and create a just tax code that works for all—not just the wealthy few.”

The relative wealth of Latinos is shrinking in part because Latino wealth growth is considerably lagging that of white households. The inflation-adjusted wealth of the average white household grew by over a third (34%) between 2016 and 2025, but the average Latino household’s wealth grew by only 12%, little more than a third as much. (The Latino share of national wealth remained flat during the Biden administration.) Also, while the share of national wealth held by Black households has similarly shrunk, the “other” category of racial and ethnic communities has gained in relative wealth.

The record of Latino growth in two important wealth categories–corporate stock and private business–is even worse. Adjusted for inflation, Latino households hold about 25 percent  less wealth in stocks in 2025 compared to 2016. And on an inflation-adjusted basis, Latino ownership of private businesses has not grown at all since 1989, the year the Federal Reserve began tracking household wealth. 

The total wealth of all Latino families–18.7 million households–is less than 20% of the total wealth of the nation’s richest 0.1%, which consists of just 136,000 households (only a tiny percentage of which are Latino).

Future Latino wealth growth will likely be slowed by the Trump-GOP tax-and-spending law enacted last year. That law cut taxes by trillions of dollars mostly for the wealthy–a group in which Latinos are underrepresented–and partially paid for them with cuts to healthcare and nutrition aid. Losing those benefits will strain Latino family budgets and make it all the more difficult to build wealth. 

The bad news on relative wealth comes on the heels of earlier ATF reports on the collapse of Latino job growth in 2025 and the average net financial loss workers in heavily Latino industries will suffer from the combination of GOP tax and service cuts and President Trump’s erratic tariff policy. 

The relative wealth loss of the Latino community contrasts sharply with the expanding fortunes of the billionaire class (to which few Latinos belong).  The collective wealth of America’s billionaires grew by 22% in 2025 alone–their combined fortune skyrocketing by $1.5 trillion, from $6.7 trillion to $8.2 trillion. Under current law, none of that wealth growth may ever be taxed (see below).

SOLUTIONS

Reversing this trend of relative Latino wealth loss requires progressive tax reform that uses the revenue raised to lower costs and increase opportunities for workers and families. Among the tools available to more closely equalize the wealth of Latino households with that of white households are a wealth tax, a billionaires income tax, capital gains reform and a restored estate tax.

Wealth Tax

A wealth tax requires the super rich to pay a small portion of their wealth each year. Sen. Elizabeth Warren (D-MA) has proposed a 2% annual tax on the portion of fortunes exceeding $50 million. While only affecting the richest one of every 2,000 families (0.05%), this tax would raise at least $3 trillion in revenue over 10 years. That’s money that could be used to lower the cost and improve the quality of child care, meaning Latino parents could more easily build careers that build wealth. 

California voters will decide this fall on an initiative that would levy a one-time 5% tax on the state’s 200 billionaires and use the money to better fund education and nutritional assistance. 

Billionaires Income Tax

Unlike a wealth tax, a billionaires income tax–or tax on unrealized capital gains–taxes only the increase in wealth, not the wealth itself. So any year in which the fortune of a billionaire or other super-wealthy person declined–no matter how rich he remained–no tax would be due. 

A plan in Congress co-sponsored by the top Democrat on the tax-writing Senate Finance Committee would annually apply the capital gains tax to the winning investments of the ultimate rich–those consistently worth $1 billion or with income over $100 million–whether or not the underlying assets were sold. Though applying to fewer than 1,000 taxpayers, the plan would raise more than $500 billion in revenue over 10 years. That’s money that could be used to make healthcare more affordable, which would lower costs and stabilize the finances of Latino families, allowing them to better accumulate wealth. 

Capital Gains Reform

The most prevalent forms of investment income–capital gains and dividends–are currently taxed at little more than half the top tax rate on wage income. That means an investor living off millions of dollars of unearned income can pay a lower tax rate than a construction worker, police officer or nurse.

Inherited capital gains simply disappear for tax purposes because of a loophole called “stepped up basis”. Example: say stock purchased for $100 is after 25 years worth $1,000. If the original owner had sold just before death, capital gains would be due on the $900 ($1,000 minus $100) profit. If the investor’s heir sells it immediately upon receipt, no tax is due because the original cost–the “basis”–is adjusted to the value at time of inheritance. 

President Joe Biden proposed closing both these loopholes for the highest-income taxpayers. The top tax rate on investment income greater than a million dollars would be equalized with the top tax rate on ordinary (mostly meaning wage) income. And inherited capital gains greater than $2 million per couple would be subject to capital gains tax based on the original purchase price of the underlying asset. 

It was estimated five years ago that these paired reforms would raise nearly $400 billion in revenue over a decade–the potential revenue figure by now is undoubtedly higher. That’s money that could be used to make housing more affordable, promoting greater Latino home ownership and reducing rent so that Latino families can build more wealth faster.

Estate Tax

The estate tax is the only federal curb on the accumulation of dynastic wealth. But it’s been severely weakened over the past few decades, both through Republican legislation and the aggressive opening of loopholes by advisors to the wealthy. 

In 2026, a couple can pass along $30 million to their lucky heirs without paying a penny of estate tax–and that figure will grow with inflation. The estate tax is paid only by the roughly eight richest families out of every 10,000. Despite constant claims to the contrary, almost no family businesses or farms are threatened by the tax for the simple reason that they are not valuable enough to trigger it. 

While the amount of estate completely exempt from the tax has been climbing, tax lawyers and accountants have devised ingenious schemes to shield the fortunes that exceed the exemption. Special trusts are established to obscure ownership of assets, valuations are artificially depressed and other strategies pursued to prevent the richest households from paying their fair share. 

The recent extension of the 2017 Trump-GOP estate-tax rules will cost us an estimated $167 billion in lost revenue over the next 10 years. The estate-tax dodging practiced by the wealthy will cost us tens of billions of dollars more. That’s money that could be used to improve education and lower college costs, making it easier for Latino students to get ahead in life and accumulate more wealth.