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.
QUINNSCOMMENTARY 
Here we go again. Sucking up to the rich. To begin with, If one has the cash to pay for tax lawyers, one can hide practically all their income, as witnesss the myriad of books entitled “how not to pay any taxes legally, etc.,” you could fill a whole library with such crapola, therefore nobody knows what their income is since secrecy in their world is the most valued commodity, it could be more than 10 times their stated income, who knows? And what about the offshore loopholes and so-called “foreign” corporations? Why don’t you really make yourself useful and find out what the true income is of those purporting to be just one short day behind the bread line. As a matter of fact, why don’t we start “passing the hat” for all those poor unfortunates. If their “real” income doesn’t reach into the trillions I’ll eat my hat…and yours. And what about those making over $250,000, that’s rich brother, you better believe it, some more brainwashing? And while we’re at it, why don’t we use this occasion to again pronounce how half of the population don’t pay any taxes? Uh, huh. Maybe it’s because they’re in that category called “the poor?” I would like to, here, for the first time, announce a new category of tax payers, the highest rate of all, we’ll call it the poverty tax. And how would you like to be paying that tax. you pay it from the day your born till the day you die, and you pay it every day of your life, over, and over, and over again, and you NEVER get a rebate. Thank you, Mrs.McGillicuddy.
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No sucking up to the rich, just some real life facts. It makes good press to verify the wealthy, it appeals to some people, but it solves nothing when the real problem is not revenue, but spending.
How does a successful person take anything from the average Amercan, rather in most cases they create more opportunities or at the very least create demand for goods and services with their spending. How many people are there whose jobs depend on what most of us see as lavish spending?
The wealthy donate half of all the money given to charity, is that money better directed to the government?
Most of the Amercans who pay no income tax are not poor, but rather they are able to take advantage of numerous tax deductions, tax credits and the like, just like the rich only the rich loose most such deductions under the AMT. The super rich such as Buffet only have a low tax rate because their income is from dividends and capital gains. What needs to fixed is the entire tax code applicable to all Americans.
Most of us have a fair chance in life, we make decisions, live in a certain way, plod along content or strive to constantly achieve more. We spend and save prudently or we do the opposite. After forty years of work we look back and draw conclusions, whatever those conclusions are we have ourselves to hold responsible not those who have achieved less or those who have achieved substantially more.
I have a great deal more than some of my peers and a great deal less than others who all started at the same point in life…so be it. How does railing against a friend who achieved a great deal more than me accomplish anything?
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perfect…
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FEDERAL DEBT ELIMINATION
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I don’t think taxing millionairies will solve our problems in the US what if every multi-millionaire gave 100.000 thousands dollars to 10 people out of there money do u think it would make difference in todays economy .maybe or maybe not my husband and I work every day we struggle to pay our housenote car note and utilities every month but we r one of the lucky families that still has jobs . giving people money to spend helps the economy
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Not sure exactly what you guys are saying The point of the article is to pint out the fallacy of rhetoric that misleads people into believing that it is wise or practical to think we can tax millionaires only and solve our problems.
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This is so much right wing spin. Their trick here is to use the words Adjusted Gross Income.
Exxon Mobil , General Electric and many others Adjust there Gross Income by transferring it off shore to phony subsidiaries. They payed zero in taxes in 2009. Which was the last time I checked up on it. Some even profit from the tax code. (have a negative tax). They claim losses at the 35% tax bracket and shelter all profits off shore or in the stock market which is taxed at only 15% . Warren Buffet only claims about $100,000 in salary every year. The rest of his vast wealth goes into his investments. Buffet, is the 3rd richest man in world .
Or corporations transfer a lot of their corporate profits to the owners who can file it on their individual income taxes, which is taxed lower than the corporate 35% rate. This is probably why the Republicans protect the $250,000 tax bracket all the time. Not because they care about people who only make 250k a year, but because it is a tax shelter for their much richer buddies. Some even take out loans from a subsidiary and get a tax write off on the interest expense. Which really isn’t an expense is it ? Because they are paying themselves (their phony subsidiary). If what the author of this rag said is true about most of the top 1 % returns coming from California not New York, It is probably because the Hollywood crowd can’t or won’t “Adjust” (hide) their gross incomes like the crooks on Wall Street do, or our unethical corporate leaders do, who support the Republican Party at a ratio of 2 to 1 over Democrats. Articles like this, and the electorate who read and fall for this spin is the reason this country has been losing ground to other countries in the global economy for the last 2 decades.
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You miss one point, adjusted gross income includes income from capital gains such as in Buffets case where it makes up the bulk of his current income. His issue is the tax rate on those earnings is fixed at 15% and of course that applies to everyone. However, the real point is, if anyone thinks just this group of people can or should fix everything they are mistaken. Besides just increasing revenue while Congress keeps spending doesn’t really solve the fundamental problem does it?
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I have to agree with Ishmaelsfolly
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Repealing the Bush tax cuts (if that’s what you’re talking about) impacts a much larger demographic than millionaires and billionaires; to suggest anything else is disingenuous.
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