Here's What 'Income Equality' Would Look Like

Take about $4 trillion from the top 40% of families and give it to the bottom 60%—voilà, no more inequality.

WSJ article by Scott Hodge, 2-14-14. Excerpts:

"in 2006," the CBO found that those in the bottom fifth, or quintile, of the income scale received $9.62 in federal spending for every $1 they paid in federal taxes of all kinds"

" households in the top fifth received 17 cents in federal spending for every $1 they paid in all federal taxes"

"the middle class—also got more back from government than they paid in taxes. These households received $1.19 in government spending for every $1 they paid in federal taxes"

"federal tax-and-spending redistributed $1.2 trillion from the top 40% of households to their fellow Americans. Half of this amount benefited the bottom 60% of non-elderly households while the rest benefited seniors.

The Tax Foundation study, "The Distribution of Tax and Spending Policies in the United States," used postrecession 2012 data for all 150 million U.S. families (as opposed to households). It put the amount of federal redistribution from top earners at $1.5 trillion, with state and local governments redistributing another $500 billion. These results don't include the latest hike in top marginal tax rates to 39.6% from 35% or Affordable Care Act subsidies"

"the average market income for American families in 2012 was $81,600"

"A typical American family in the lower income quintile, on the other hand, has an average market income of $9,560 and gets $21,158 more in spending than they pay in taxes. Thus we would need to give them roughly $50,882 more in federal transfers to raise their overall income to the average market income of U.S. families. A family in the middle quintile has on average a market income of $56,885 and gets $7,376 more in spending than they pay in taxes"

" to raise their overall income to the U.S. market-income average, the government would need to give them $17,339 in transfer payments above what they are currently getting."

"Families in the fourth quintile have an average market income of $100,240 and pay $4,089 more in taxes than they receive in spending. Thus, we would need to take an additional $14,551 from these families to bring their market incomes down to the national average."

"Families in the top fifth have an average market income of $311,400 and pay $65,573 more in taxes than they receive in spending. Thus we would need to take an additional $164,227 from them in higher taxes to lower their market incomes to the national average."

"o guarantee everyone in America an average income, the federal government would have to take an additional $2.4 trillion in income from the top 40% of families—in one year. This would bring the total amount of income redistributed from the top to nearly $4 trillion."

"the current amount of redistribution already takes 21% of the top quintile's income. That would have to soar to 74% to make every family in America "average.""