Millionaires and billionaires are in the news a lot these days. The political left sees them as the funding pool for all its social goals. We are told Republicans see them as their buddies despite the fact many of these folks are about as far left as you can get. No matter, the point is, can taxing the “wealthy” solve our fiscal woes?
Let’s look at this group. According to a Spectrem Group study, there are now 7.8 million millionaire households in the U.S. This is a total net worth of the household which includes the value of all assets except their primary residence. Remember, that is not income, it is the total accumulated during one’s life – savings, cars, 401(k) accounts, cash value life insurance, etc. less debts. A million dollars is not what it used to be. If you had a net worth of one million dollars in 1950 you need $9,186,000 today to be a real millionaire.
Keep in mind too that being a millionaire does not mean you have bundles of money under the mattress. And, it does not mean you have an income of $1 million or anything near it. Many “millionaires” have quite normal incomes, even less than the magical $250,000 we hear so much about. Many people in the millionaire category are there because of the value of their businesses or farms.
According to IRS data, 323,069 income tax returns out of some 144,000,000 filed (2008) showed an adjusted gross income of $1 million dollars or more. That is roughly 0.3% of all households. Only three percent of all returns have an AGI over $200,000 (that’s households, not individuals). The top 1-percent Adjusted Gross Income (AGI) break point (TY 2008) was $380,354. The state with the most such returns was California…imagine that, not New York with all those greedy Wall Street types, more like high-tech entrepreneurs and Hollywood celebrities.
As for billionaires, best data I could find shows there are 403 billionaires in the US, remember, that’s net worth that includes stocks, real estate, etc. not income. Their income is included in the 323,069 number mentioned above.
I don’t suppose we should feel sorry for any of these folks and I guess how they achieved this status is irrelevant, hard work, risk taking, saving and all that stuff.
However, what we should be asking is do we believe that balancing the budget and reducing the deficit while expanding government programs can or should be funded by three hundred thousand Americans or even the top three percent of all American households?
Think about that each time you hear the rhetoric about millionaires and billionaires.