Monday, April 26, 2021

Redistribution of Wealth

The top 1% of households in this nation holds $34 trillion in wealth, which sounds really appalling. We should, we are told, take some of that wealth away from them (Elizabeth Warren says 2%) and give it to the 99% who are not wealthy.

Defining a “household” as three people (definitions run from 2.6 to 3.4 persons) there would appear to be 110 million households in the US, of which 1.1 million are in the top 1%, leaving 108.9 households as recipients of the largesse.

So let’s call Elizabeth Warren a piker and take all, not part, of the wealth of the top 1% and give it to the 99% equally. Each household would get $31,313 as a one-time bonus. Elizabeth Warren's 2% would give each household a $631 bonus.

If we decided to give it only to the bottom 50% then each household would receive a $62,000  bonus. One time only, remember. There wouldn't be any more, because we took 100% of their wealth.

Don’t spend it all in one place.


jez said...

A trillion is a million times bigger than a million, isn't it? I think you might be adrift by a few orders of magnitude.

Jayhawk said...

Noted and corrected. Still, pretty paltry stuff. Warren's plan would not even put food on the table for a month.

jez said...

I think there are still some order-of-magnitude errors. I agree that 2% of 34T (680B) split between 110M households (around $6k per household) doesn't seem like all *that* much, although maybe it would to one of the bottom 20% households earning less than $20k a year.
It goes without saying that Warren does not intend to distribute the proceeds from any wealth tax directly in this manner, but I approve of these types of sums as they help us develop a sense of scale. Who can truly grasp the meaning of "trillions" of dollars? -- "thousands" are far more intuitive.

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