Is it just me or is there is something wrong with calling people "wealthy" who make $200,000 a year when in the United States there are about 400 billionaires (and a single billion is 1,000 times a million - and not many of those people have a single billion, but many billions) and over 9 million millionaires! I found quotes that put the richest 1% of households in the United States owning between 34-38% of all of the wealth in the country.

Consider that Warren Buffet pays about 15% in tax but his secretary (who only makes about $60,000 a year) is in the 35% tax bracket. He issued a challenge to members of "The Forbes 400" billionaires saying he would donate $1 million to charity if the collective group of richest Americans would admit they pay less taxes, as a percentage of income, than their secretaries. That's very nice, but I would have liked to have had him voluntarily pay the same percentage in taxes as his secretary and challenged the other wealthiest Americans to do the same.

Meanwhile it looks like it's time for a divorce for a bunch of Americans...as a married couple your taxes will go up if your income is over $250,000 a year, but if your spouse turns into your "significant other" you can each make up to $200,000 a year before your taxes will go up. That's a combined income of $400,000 without an additional tax hit.

I came upon this old interview from 2003 that I found interesting...here is a portion of it and I've given the link if you'd like to read the entire thing.

The Multinational Monitor

May 2003 - VOLUME 24 - NUMBER 5

The Wealth Divide
The Growing Gap in the United States
Between the Rich and the Rest

An Interview with Edward Wolff

Edward Wolff is a professor of economics at New York University. He is the author of Top Heavy: The Increasing Inequality of Wealth in America and What Can Be Done About It, as well as many other books and articles on economic and tax policy. He is managing editor of the Review of Income and Wealth.

http://www.multinationalmonitor.org/mm2003/03may/may03interviewswolff.html

"If you think about taxes that reflect a family's ability to pay, a family's ability to pay is a reflection of their income, but also of their wealth holdings. A wealth tax would not only produce more tax revenue, which we desperately need, but it would be a fairer tax, and also help to reduce the level of inequality in this country."

MM: Do you favor a wealth tax?
Wolff: I’ve proposed a separate tax on wealth, which actually exists in a dozen European countries. This has helped to lessen inequality in European countries. It is also, I think, a fairer tax. If you think about taxes that reflect a family’s ability to pay, a family’s ability to pay is a reflection of their income, but also of their wealth holdings. A broader kind of tax of this nature, would not only produce more tax revenue, which we desperately need, but it would be a fairer tax, and also help to reduce the level of inequality in this country.

MM: In broad outlines, how would you structure such a tax?
Wolff: I would model it after the Swiss system, which I think is a pretty fair system. It would be a progressive tax. In the United States, the first $250,000 of wealth would be exempt from the tax. That would exclude 80 percent of all families. The tax would increase at increments, starting out at .2 percent from about $250,000 to $500,000. The marginal rate would go up to .4 percent from $500,000 to $1 million, and then to .6 percent from a $1 million to $5 million, and then to .8 thereafter.

It would not be a very severe tax. In fact, the loading charges on most mutual funds are typically of the order of 1 or 2 percent. It would not be an onerous tax, but it could raise about $60 billion annually. Eighty percent of families would pay nothing, and 95 percent of families would pay less than $1,000. It would really only affect very rich families.