More on the wealth tax

Many of the people who now make $50,000 or more have to pay very substantial taxes, consisting of a combination of federal and state income taxes and federal wage tax (social security), plus local real estate and sales taxes. If the taxes on this group could be substantially lowered, it is certain that it would push their total wealth upward. If the group making $100,000 to $200,000 or more had their taxes lowered, their wealth would begin to approach or exceed one million. One million dollars per family becomes the magic number!

When a family reaches this level of wealth, a wealth tax would kick in. It could be based on the idea that the first one million of wealth is not taxed. But all wealth greater than one million would be taxed at 1%. If you had 2 million, you would pay a tax of 1% on the second million, or $10,000.

This would be in addition to whatever other taxes you might owe. In 2003 the number of millionaires (plus a few hundred billionaires) is about 3.8 million (NFO Financial Services). . The number of households with wealth of $500,000 to $1,000,000 is about 3.6 million.

The total wealth of the top 10% of US families is about 70.9% of $42.1 trillion, which is $29.8 trillion. The total wealth that would not be taxed under the one million exemption rule would be 3.8 million families times one million dollars each, which equals $3.8 trillion. Subtract this amount from the $29.8 trillion and you end up with about $26 trillion subject to the 1% tax. One percent of $26 trillion is $260 billion. Remember, this is a tax of only 1% on the wealth of families who have more than one million.

This is the amount that could be used every year to lower income taxes, reduce the wage tax to near zero, provide universal health care, and do other things.