Tax Wealth on households with more than $50 million in net worth

We propose a 4% tax on all wealth of all households with more than $50 million in net worth. Households with net worth of less than $50 million would not be subject to this tax. Presently the wealthiest 0.1% of households, 124 million households, own 21.5% of all private wealth or net worth. The total wealth of the nation stands at $80.660 trillion; therefore the collective wealth of the 0.1% of households is $17.2 trillion, and the average among the wealthiest 0.1% is $138.7 million per household, and this entire amount would be subject to a 4% annual tax. Households with less than $50 million would not be subject to the tax.

(Sources: on wealth: http://toomuchonline.org/weeklies2014/apr072014.html, and
http://www.businessweek.com/articles/2014-04-03/top-tenth-of-1-percenters-reaps-all-the-riches)

In the last few decades income inequality has fed a growing wealth inequality. Lawrence Mishel at the Economic Policy Institute reports that between 1979 and 2007 the top-earning 1% of households captured 59.9% of all income gains, while the lower 90% of households captured 8.6%. The additional tax revenue, 4% of the total wealth of $17.2 trillion, would be $688 billion annually. The federal budget was $679 billion in deficit in 2013, so this new revenue would balance the budget, and in subsequent years would serve to lower taxes on the less affluent majority. $688 billion is approximately 4% of annual GDP.

Since 2008 wealth in the U.S. has increased by $23 trillion, according to the Federal Reserve's Flow of Funds report, from $57 trillion to over $80 trillion. (See Flow of Funds report from the FRB, latest iteration for data on the $80 trillion, page 2.) That's $185,000 added wealth for all 124 million households in a five year period when most households saw their incomes decline by 7%, and millions lost their homes in foreclosure, and the total national income in 2009 declined for only the second time since 1934. The $23 trillion in new wealth increases the average per household net worth from $498,000 to $690,000, though maybe only 5% of households own the average or above net worth. The windfall in new wealth runs contrary to expectations since the unstable financial sector self-destructed causing the economic collapse, yet the financial elites are now major beneficiaries of a windfall. The top-earning one percent earn more collectively than the lower-earning 60%, 21.6% vs 21.3% according to Citizens for Tax Justice report Who Pays Taxes in America. (http://ctj.org/ctjreports/2014/04/who_pays_taxes_in_america_in_2014.php#.U3piQSghxlI)

It is due to this imbalance of economic gains that a 4% tax on wealth over $50 million per household seems equitable, constructive, and economically productive.