The total U.S. wealth surpasses $100 trillion. The richest 10% hold 77.1% of that amount, and the next 10% hold 11.2%, which means that the rest of the nation holds less than 12%. The richest 1% holds 38% of all the wealth. How many households are there? In 2018, there were 127.59 million.
So the richest 1% consisted of 1.2759 million, and those held 38% of 100 trillion dollars, or 38 trillion, meaning that each household held an average of $30.209 million. The next 9% richest (11.831 million households) had 39.1% of the wealth, or 39.1 trillion dollars total, an average of $3.3049 million each. And the next 10% (12.759 million households) had 11.2% of the wealth, or 11.2 trillion dollars, which would be $877,800 each.
Suppose we taxed the second 10% a wealth tax of 5% for all amounts above $500,000. They would be taxed $18,890. The government would collect $241,017,510,000.
From the 9%, suppose the government collected 5% for all wealth between $500.000 and $2 million and 10% for amounts between $2 million and $5 million. It would collect an average of $205,409 from each household, or a total of $2.4 trillion.
Finally, for the wealthiest 1%, they would be taxed 15% for every dollar above $5 million. On $30.209 million, they would be taxed $4,531,350, and the government would collect $5.785 trillion.
The total amount of tax would be $8.426 trillion. At present, the federal government spends $4.407 trillion annually. The wealth tax would be nearly twice as large.
Personally, I would like to see this tax poured into Medicare for All. And, by “for all” I really mean everyone, whether they live within or outside the U.S., so long as they are a U.S. citizen or legally resident. And what will Medicare for All cost above present rates? Bernie Sanders says $1.38 trillion a year. Others say $2.4 to $2.8 trillion. But if we have an extra $8.428 trillion in the till from the wealth tax, we have at least the amount to cover the extra amount for around 4 years. And, of course, there may really be no shortfall.
How can we make it work? Simple. Pass out cards to everyone for Medicare for All as soon as the wealth tax is collected. Medicare for All will pay on the same scale as the present Medicare. All private health insurance is immediately cancelled. Hospitals and doctors just bill Medicare and get paid promptly according to its schedule. No one can bill or pay privately. And off we go. We’ll find out soon if there’s enough money to keep the system going.