What If We Took All the Income of the Rich?
In 2009, the top 1 percent of all income tax returns with a positive adjusted gross income pulled in a total of $1.3 trillion. Of that amount, 24 percent was paid in federal income taxes, or $318 billion.
Here’s the arithmetic. Only $1 trillion is left because they’re already paying $318 billion in taxes. Since the official federal deficit is estimated at $1.315 trillion for the 2011 fiscal year, it should be clear that even if the top 1 percent paid 100 percent of their income in taxes, the federal budget would not be balanced.
More on taxing the bottom 99 percent versus the top 1 percent.
But it worked so well for Lenin and the Bolsheviks…
The interesting part would be in years two through, say, year 10. The rich would stop earning money as capitalists moved their money offshore. Business would experience a liquidity squeeze and the economy would slow. Industry would lay off workers as the economy slowed. As tax revenue fell the deficit would slow. Eating the rich doesn’t sound like a very effective strategy.
I’ve heard that all the off-shore money would be a major boost to the economy if it were brought back untaxed.