Is it time for an asset tax when top 1% own 38.1% of USA - since income

taxes (payroll plus FIT) seem to let the rich get away with paying a lot less that 38.1% of those taxes.

If an income tax can not be fair, isn't it time for an asset tax instead

blowing away the idea rich pay too much in tax - - If richest 40% own 95.3% of everything, and do not pay 95.3% of the cost of government, then the tax system is biased against the poor - Proving once again that our media does use Google:
Search terms were: 1 distribution of wealth in us, 2.wealth and distribution. 3. us distribution of wealth, 4.us and 1998 and stat or statistic or statistics gini coefficient

Here is a summary of the statistics for the distribution of wealth in the US as of 1998, the most recent information available that has been fully analyzed:

% of US Population % of Wealth Owned
==========================================================
Top 1% 38.1%
Top 96-99% 21.3%
Top 90-95% 11.5%
Top 80-89% 12.5%
Top 60-79% 11.9%
General 40-59% 4.5%
Bottom 40% 0.2%


You can find this illustrated in a graph at United for a Fair Economy (UFE):
http://www.ufenet.org/research/wealth_charts.html

You can also find additional graphs and charts on US income trends at the UFE site:
http://www.ufenet.org/research/income_charts.html

These figures are based on research by New York University Economics Professor Edward N. Wolff. In his April 2000 working paper titled "Recent Trends in Wealth Ownership, 1983-1998", Wolff used statistics from the Surveys of Consumer Finances to address several issues surrounding the concentration of wealth in America.

Working Paper No. 300
http://www.levy.org/docs/wrkpap/papers/300.html

According to Wolff's figures, about 70 percent of the wealth in the US is in
the hands of 10 percent of population. He also notes that the disparity
between the distribution of wealth rose from 1989 to 1998, although the pace of the inequity was slower in the 1990s.

In addition to the Surveys of Consumer Finances, there are two other major
sources of data on American wealth:

The U.S. Bureau of the Census Survey of Income and Program Participation
(SIPP): http://www.sipp.census.gov/sipp/pubsmain.htm

The Institute for Social Research's Panel Survey of Income Dynamics (PSID):
http://stat0.isr.umich.edu/psid/data-center/dcmain.html

The data and methodology for each of these sources varies. As a result, the
distribution statistics produced by each of these sources may also vary.

For the purposes of his analysis, Wolff defined wealth as "marketable wealth" or "net worth," meaning the current value of all marketable assets (real estate, cash, savings, bonds, stocks, pension plans, trust funds, etc.) minus the current value of debts. He excluded durable goods like automobiles and house wares and social security benefits from his definition of marketable assets.

While researching your question I found other graphs that detail the
disparities in income. It's important to remember that although wealth and
income are strongly correlated, they are different. More factors are taken into consideration when calculating wealth and as a result, it is probably a more accurate indicator of how money is distributed in the US.

Here are some additional resources on wealth and income:

US Census Bureau
http://www.census.gov/dusd/MAB/wp233.pdf
1999 report on the wealth of US families

US Census Bureau -- Census 2000
http://factfinder.census.gov/servlet/BasicFactsTable?
_lang=en&_vt_name=DEC_1990_STF3_DP4&_geo_id=01000US
Detailed table on income and poverty statistics

http://factfinder.census.gov/home/en/sf2.html
Additional statistics on households and families arranged by state

Understanding the US Distribution of Wealth
http://minneapolisfed.org/research/qr/qr2122.pdf
Comprehensive report based on 1997 data

Century Foundation
http://www.policyideas.org/Issues/Social_Economic/Household_Wealth.pdf
Graphs and analysis based on 1998 US Census data

Review of Income and Wealth
http://www.iariw.org/articlelinks.htm

Survey of Consumer Finances
http://www.icpsr.umich.edu:8080/ABSTRACTS/03155.xml?format=ICPSR
http://www.federalreserve.gov/pubs/oss/oss2/2001/scf2001.information.html
Comprehensive survey on consumer income, assets, debt, and major transactions

Unequal Income Distribution in the United States
http://home.rochester.rr.com/jerryfisher/income.htm
This is based on 1995 and 1996 data. Scroll down to the bottom for information on distribution by country

Center on Budget and Policy Priorities
http://www.cbpp.org/2-26-01tax.htm
IRS data on after-tax income trends

The L-Curve By David Chandler
http://www.davidchandler.com/lcurve/
Based on 1997 data income. Includes easy-to-understand graphs on income
distribution

Online Dictionary of the Social Sciences
http://datadump.icaap.org/cgi-bin/glossary/SocialDict/SocialDict?term=LORENZ%20CURVE
A definition of the L-Curve

Online Dictionary of the Social Sciences
http://datadump.icaap.org/cgi-bin/glossary/SocialDict/SocialDict?term=GINI%
20COEFFICIENT
A definition of the Gini Coefficient

If you are looking for a geographical breakdown of the distribution of wealth in the US, here are some additional links:

US Census Bureau
http://landview.census.gov/prod/1/pop/p60-189.pdf
An analysis of income, poverty and benefits based on results from the 1990
census

Center on Budget and Policy Priorities
http://www.epinet.org/studies/pullingapart/1-18-00sfp.pdf
A January 2000 state-by-state analysis of income trends. Based on data from
1978 to 1988

Forbes.com
http://www.forbes.com/2001/06/22/2001maps.html
Search for the world's richest people and click on the map for more information

and make only the first $10 million exempt.

Top 1 percent of FAMILIES control well over 50% of the wealth in America.

Chance of mobility into the highest 5th of America is down to 30% over 30 years.

the top 550 people make as much in one year as the bottom 50%

wish I could remember where I saw that one....

I think that this is the means to prevent oligarchy.

I won't hold my breath for the Democrats step up to the plate, however.

I've proposed a national property (land) tax, others (not here), suggested a national wealth tax (which would capture ridiculous situations like Bill Gates, one man, having a net worth of over 40% of Americans) these both have their problems, but yes, we should do something to address WEALTH, and not just INCOME...

to have an income tax RATE determined by your wealth.

So your wealth is not taxed, but it does determine your tax rate.

Obviously, the wealthiest would have a high tax rate, and vice versa.

The rationale is as follows: Your taxes are high only if you are rich. People who have one good year are not unduly punished. Also, the rich will have less incentive to reap more money because it will all be taxed, but the poorest will keep all of their income.

In general, this would have the effect of capping the wealth growth of rich while putting upward pressure on the poorest. Moroever, people's tax rates will not vary greatly from year to year. It becomes more predictable.

If you think about it, it really is the way to go...which is why it will never happen ;-)

:-)

of the professional and amateur economists out there. If you are one, let me hear it.

I also have a strategy for trade balance that beats anything I've read in the opinion columns. Far better strategy. To me, when I hear "experts" talk about what to do with the trade imbalance, they strike me as kind of dumb... to be frank (since this is more of a scientific forum, I'll take off the kid gloves).

Perhaps, my trade balance strategy is discussed in the academic literature. I should check that at ideas.repec.org

Also we need like a $25,000 personal exemption from state and federal income taxes, plus about $5000 more per child.

God! I'm glad to read SOMEONE else voice this!

I'm working on a website which will flesh this out some more, but I agree that this is an option, even though it has some problems like any other alternative, which should be "put on the table"...

I grew up in a nice suburban Connecticut town in a nice home on a nice peace of land. My father is a mechanic and my mother was a bus driver. Clearly not wealthy people. But they both worked extremely hard to raise my sister and myself in a nice area.

Having to pay massive property taxes would have made that impossible.

I hate sales tax because it is regressive. IMO the best way to do it is all income taxes with the first 25-50k (depending on cost of living in your area) of Everyone's income being tax free. I agree the wealthy do not NEARLY pay enough in taxes but a tax system based around property taxes would seem to hurt the poor and middle class who are trying to better the lives of their children.

for state and federal gov't.

Locally, I see no problem with property tax. It it only goes to local issues. Although, it seems to me that property tax should be based on acreage and should not punish reinvestment. Why tax people for improving their property? It makes no sense. It is simply tradition.

Moreover, other resources should be taxed as well. Not just land. This only makes sense, and takes the form of a water bill etc.

Again, tax policy is not based on sensible well-thought strategies, but on tradition and the bizarre process of politics.

I think states ought to pin it to Federal income tax. For example, your state income tax is 67.9% of your federal income tax.

The state knows how much money it needs, it also knows how much its residents are paying in Federal taxes, so why not divide the two and call it the state tax rate? That why you simply file your federal tax form along with your state income taxes. The states could use all the same software and resources for checking as the Federal gov't, saving even more money.

Moreover, the Federal amount is supposed to be progressive and "fair" so why reinvent the wheel?

Again, this just makes too much sense for it to be adopted.

>Again, income tax is the way to go for state and federal gov't.

Why would you want to discourage people making money? Why tax people for being productive? To quote: It makes no sense. It is simply tradition.

>Although, it seems to me that property tax should be based on acreage and should not punish reinvestment. Why tax people for improving their property? It makes no sense. It is simply tradition.

Most people agree that if you have a $1,000,000 insurance policy, you would pay more than if you're protecting a house worth $10,000. Does THAT make sense?

Now use that same logic to see how property tax is calculated.

As for government services, it is assumed that such services increase value (police, fire, roads) to property along with its improvements, and if we are to apply any reasonable definition of "fairness", those who receive the greatest benefit should pay the greater amount.

why should peopple be subsidized for having children?? This is a lifestyle choice.

I say no "child exeption" because every "exemption" that involves a choice is really a tax against people who choose not to live that way.

This is the "Free delivery, carry-out special" pizza joint spin. Delivery is free, but if you carry it out you get a discount. Sounds better than charging for delivery.

It is better to tax the dead than the living.

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>If you tax the people who own 95.3% of everything so that they pay 95.3% of the cost of government, it's only fair that their votes be revalued such that they get 95.3% control of the votes in any election

The reason the Boston tea party happened was to protest that large business (E. India Tea Co.) was given favorable tax treatment.

That's right. It happened not because of taxes in and of themselves, but because of UNFAIR tax breaks given to selected corporations.

In the writings of the Declariation and Constituion, they were very clear that there should be NO aristocracy, and as such, even though most of them were rich, gave rich men no more voting power than the poor.

I guess you should just call those founding fathers "commies", eh? But that's the spirit of the system we live in.

Government is supposed to CURB market deficiencies and excesses, not ENHANCE them.

Among the first taxes, for example, were import tarriffs which were intended to 'even the playing field' for American manufacturers against larger competitors from overseas...

So much has changed...

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voting and financial status (luckily now) are seperate. Of course those who own 95.3% of everything do have a much louder voice in the process but as far as voting goes we have learned to keep them apart.

It seems that a lot of you a pretty passionate in your anger toward the wealthy. I must ask, what's fundamentally wrong about wealth accumulation?

-Will

Do I have to explain how the rich, living off of their wealth, pay a lower rate of taxes than the poorest of tax payers? Please do your homework.

SERVICES RENDERED YEAR TO YEAR.

Consider there is no wealth tax, however small.

However, every state, every county, every city and town has some form of wealth tax as the wealthy own a disproportate amount of property. Some counties go beyond this, however, as I know that Arlington, VA has a annual tax on the value of automobiles as well.

The federal government, however, has no such taxing mechanism. But ask yourself: what does the federal government DO? The primary expense (not talking transfer payments ie: Social Security) is the Military. What does the military do? Protect lives and property.

I'm really rambling, but please bear with me.

Now, I have an insurance policy on my house. If my house were worth twice as much, I'd expect to pay more for the increase in service and protection, RIGHT? And I'd expect to pay that EVERY YEAR. EVERY YEAR.

OK, let's take a wealthy person.

First off, by the nature of your question I don't think it's necessary to distinguish between wealth and income, as it seems to be blurred many times here and elsewhere.

So, say that a person was LUCKY enough to have accumulated WEALTH. Say they buy a big house like Ken Lay, whose personal residence is worth like $40 MILLION dollars (true, btw).

OK, next year the bill for the military is going to be like what, $400 BILLION dollars? What's it for? To protect us and our property. What share of that $400 billion (every year) will Ken Lay pay to protect his personal house? NOTHING. NADDA. He'll pay taxes on whatever income he's making, but NOTHING for the disproportate wealth that our government's protecting and servicing.

Me, I'm for a FLAT income tax, along side a FLAT form of wealth tax (just property?).

Without the TWO however, the rich are basically getting a *FREE RIDE* on the backs of the lower classes.

A progressive tax would APPROACH compensating one tax with the lack of a wealth tax, but I personally think that taxing earn income a higher rates is basically unfair to those who live solely on their income, rather than their wealth.

People in the US don't want to make people less wealthy. It is a cultural issue.


I personally don't understand the notion of flat tax. It doesn't make collection any easier, or the system any simpler. A truly "flat tax" would mean charging every citizen the same amount. That is, $1000 per person, for example. Is that fair?

So is it an absolute flat, a percentage flat, a logarithmic flat? I mean really, let's not be small minded about this. There are many notions of "fair" that could be used. Perhaps we should be more pragmatic and adopt tax policy that helps us to achieve our goals as a nation, rather then a tax policy based on somebody's idealogical notion of "fair."

That's about as well said as I can do.

You will see that wealth is not taxed. This notion is not popular in the US. However, it is possible to determine somebody's tax RATE from their wealth, and then tax the INCOME.

It doesn't "steal" from Bill Gates and the Walton's but it does say, "you've got your share." Moreover it would encourage the rich people to invest because if they compensate themselves it's just going to get taxed anyhow. Which is what they should be doing anyway, if they felt any sense of civic duty...

The notion of taxing wealth has beenvery popular in the US from before the revolution.

There is not a state, county or town that doesn't tax property.

Taxing Property, a form of wealth tax, existed in this country before the American revolution, and indeed, it was because people were being excluded from paying property tax (English aristocracy) that Ben Franklin joined the revolution.

As it was with the Boston Tea Party, the founding fathers didn't mind taxes as such, it was the unfair treatment of the wealthy and politically connected that got them so pissed.

After the revolution, if you were to total all taxes collected by both local, state and federal, property (wealth) taxes accounted for the vast majority.

The federal gov't at the time was insignificant, and certainly the framers weren't psychic enough to predict the radical changes the future would hold (the mass production of guns, for starters).

I *DO* like your idea about wealth setting the RATE, however...

... the mere abolishment of taxation on investment gains. Didn't it retract the tax of investment income?
Your idea is good. I am for income redistribution and closing the gap and there is in my view nothing wrong with being rich, as long as you realize that being poor is a disadvantage that makes it hard or sometimes even impossible for you to get rich. So in order to level the plain field, I believe everyone should have to opportunity to get a fair share of the pot.
Taxing on wealth is okay, if the rich are okay with it, if not you will find an exodus of rich people. Why would they stay if their burden gets in their view overbearing? They will bring their assets over the Atlantic to Monaco and become visitors of the US with foreign passports. So what has to change is the mentality that you can gain endlessly without having to help out or pay back. The common believe in getting a quick buck while having a free lunch is a notion that doesn't rationally work out. In order to get something you have to take it away from someone. If that someone feels you take too much, you will lose either your tea or as in France you head!
Personally, I love the Swedish system, but than again I know that social welfare societies are not look keen upon in this country!

Nice table, Papau!
Top 1% 38.1%
Top 96-99% 21.3%
Top 90-95% 11.5%
Top 80-89% 12.5%
Top 60-79% 11.9%
General 40-59% 4.5%
Bottom 40% 0.2%

>Taxing on wealth is okay, if the rich are okay with it, if not you will find an exodus of rich people.

Oh, yes. They're right on the EDGE! Jeeves! Pack the bags! We're moving to anywhere else, because US taxes are the HIGHEST!

BUT THE PREMISE IS NOT TRUE.

http://www.huppi.com/kangaroo/8Comparison.htm
"You might be surprised to learn that the United States has long had the lowest tax rates of any industrialized nation."

and:
http://www.straightdope.com/columns/001201.html

Are you sure they won't go off-shore if they are threatened to pay higher taxes?

:-)