If we taxed the "Super Rich" at 100% of their income, would that close our budget deficit? An interesting look at those numbers here...

There has been a lot of talk about putting an additional tax on millionaires to increase revenues to the Federal Government.  Let me be more radical. Let's take ALL their taxable income for one year!

Below are data from the IRS (year 2009). Look at the incomes for "$1,000 under $1,500" on down to "$10,000,000 or more". The data are in "thousands", so add 3 zeroes to the end of the numbers to get millions.  The third column shows "Income Tax Paid" and the fourth column shows "After Tax Income (What is left)" for each of the benchmark levels of income. 

In addition to to what they have already paid in the third column, let's go ahead and take the amount in the fourth column too (the amount the rich have left over after paying taxes).

That total is $549,411,208,000 (billions).


Look at the data below, specifically the "Deficit (-) or Surplus (+)" line of numbers. If, in 2009, we took what rich taxpayers already pay in taxes PLUS what they have left over (in others words tax them at 100%), it would still not come close to closing the budget deficit for the fiscal year 2010 (or 2011 or 2012). Add the $549 billion number to the negative number--it becomes LESS negative.

The budget deficit would be very small in 2013, and indeed, it be gone by 2014... BUT that assumes there would be ANY millionaires around anymore to tax.

Far be it from me to defend the rich. Not one and never will be.  My goal here is to show the scale and scope of our budget issues at the Federal level. If taking all money from the rich does not come close to solving the problem, then what IS the problem? (Art--I DO already know the answer :) )

Do the Super Rich need to be subjected to higher taxes? That is a political question. It might make people feel better, but it is not the solution to our long term budget problems.  Can't we have a better class of politicians (Dem/Reps) working on our behalf? Rhetorical question, needs no answer....

Nice graph contrasting educational attainment and employment levels. I also see income inequality, don't you?

It is generally accepted that the mantra "the more you learn, the more you earn" is still valid even in our changing economy. Perhaps more so now.  How much of the increasing income gap in the US can be attributed to the "knowledge gap". The graph below contrasts college graduates (use scale numbers of the left) with high school dropouts(use number scale on the right) and their respective employment levels. These represent the extreme ends of educational attainment, so you have to assume the other levels (HS grad, some college, Associates Degree, Trade School, etc) are somewhere in between.  Notice the relatively constant upward trajectory for college graduates--I see an explicit knowledge gap and an implicit income gap. 

Source: Carpe Diem

In the chart below, look at the income data on the right. While this is just a snapshot of income comparison in one year, I am going to go out on a limb and guess if you take data 15 years before and 3 years after 2009 you will find the same trend---increasing income inequality based on level of education. 

Source: Wikipedia

Where Wall Street Money is going this campaign season...Well, Mr President, you did not actually think they would be grateful...did you???




Source: WSJ

 The trend prior to 2010 is interesting and probably not what people would guess. Hedge fund managers and their employees have been relatively more generous to the Democrats than Republicans over time.  Does Wall Street know something we don't?? (Rhetorical question, I already know the answer...)

Class Warfare---Athenian-Style...the more things change the more they stay the same...

Class warfare, Athenian-style...



Source: The New Arthurian Economics

  The more things change, the more they stay the same. 

HT: The New Arthurian Economics