Soak the Rich II dollars and no cents. Thousands, Millions, Billions and Trillions.
More information on what I mean in terms of dollars (and no cents I round)
The median household income according to the census was $46,326 in 2005 (Nationally, 2005 marked the first year since 1999 in which real median household income showed an annual increase.)
The 80th percentile was between 92,000 and 92,500
About 3% of households report income over $ 200,000.
Both facts from this *.pdf
the census does not give information on the richest 1.8% of households because their highest category is "over $250,000". They do this to preserve anonymity as otherwise it might be possible to guess who the respondents are given a specific very high income and all the other
information they collect (it's not just a rule it's an obsession).
To get information on the richest 1% one has to look at tax returns, which means one sees income after the rich have hidden some using tax shelters
The best source for such data is the web page of Emanuel Saez at UC Berkeley
It also means that one looks at families not households (unrelated room-mates are in the same household but not the same family
the census has a lovely category person of the opposite sex sharing living quarters (posslq) for girl(boy)friend) there are more families and, of course, less income per family.
He (and co-author Thomas Piketty) report that the richest 1% of families got 17% of total reported income in 2005 (total was about $ 6.8 Trillion)
and that the richest 0.1% got 7.45% or about 500 billion total. Confiscating all income over the threshold that puts one in the top 0.1 % (1.3 million) would give about 300 billion if one ignores the supply side incentive effects (which would be huge for confiscation come on).
The cutoff for getting in the top 5% of families is $ 130,000 of reported income. That is where I would begin to soak. I know some of you live in families with such income and don't think you are rich, but you are.
all information from the first link marked "new" in red on the web page (if I click it to get the URL it invokes excel instead).
you know I went to wikipedia first so I might as well admit it. This is the link
the $130,000 is the top 5%. The reason the number is low is that it is based on tax returns not the CPS and so unrelated individuals sharing housing and living expenses count as separate units. I'd say they are rich. I didn't say how hard I planned to soak them (because I don't know) but I certainly didn't imagine anything confiscatory (that would be dumb).
The idea would be to eliminate the income tax on the lower 50% have marginal tax rates slightly higher than currently up to the 80th percentile but low enough that they gain from having income up to median income taxed at 0 and then raise marginal tax rates from $130,000 on up to balance the budget.
People who make $131,000 aren't going to get hammered as only the top 1,000 is taxed at the high rate.
Effective tax rates (average not marginal) are 30% for the top 1% (incomes above roughly $300,000) going up to 35% for the top 0.01 % the rates are calculated on reported income (that is post much tax sheltering).
The top 1% of tax units (roughly families) get around 17% of reported income which was about 6.6 trillion in 2005 so they get over 1.1 trillion. raising the average effective rate on them from 30% to 55% would eliminate the 2006 budget deficit if there were no behavioral response (as of course there would be).
If the tax increase were applied only to incomes above the top 1% that would mean an increase in the effective marginal rate from around 30% to very roughly 67% always assuming no behavioral response (this calculation is from the cutoff for the top 1% is about half the average income from 99th percentile to the 99.9th and the 0.1 percentile is about 13 times the cutoff or stuff which I don't remember and I have been up all night.
To me that means that paying for the tax cuts for the non rich and balancing the budget and paying for more social spending etc etc means taxing families in percentiles 95-99 too.
I have only mentioned the income tax. Increases in the capital gains tax and the inheritance tax have a role too.