[Jinto]

Originally Posted by Bri

Nope, 100% tax rate on the top 5% wage earners would solve the deficit problem completely, in theory.

Top 5% incomes average $250,000
115 million households in US, 5% of that is 5.75 million households
US deficit in 2011 roughly $1.3 trillion

So 100% taxes on top 5% of incomes is 5.75 mln x $250,000= $1.44 trillion, which would give a theoretical surplus on the federal budget.

Off course this is not a realistic example. High incomes would simply stop working or leave the country.

Originally Posted by Wikipedia

The aggregate income measures the combined income earned by all persons in a particular income group. In 2007, all households in the United States earned roughly $7.723 trillion.[26] One half, 49.98%, of all income in the US was earned by households with an income over $100,000, the top twenty percent. Over one quarter, 28.5%, of all income was earned by the top 8%, those households earning more than $150,000 a year. The top 3.65%, with incomes over $200,000, earned 17.5%. Households with annual incomes from $50,000 to $75,000, 18.2% of households, earned 16.5% of all income. Households with annual incomes from $50,000 to $95,000, 28.1% of households, earned 28.8% of all income. The bottom 10.3% earned 1.06% of all income.

At least in 2007, the agregated income of the top 5% must have been somwhere between 2.2 trillion $ and 1.35 trillion dollars. Since 3.65% is less than 1/2 of 8% but still 61% of the money, one could estimate that the top 5% income was something like > 1.5 trillion $. Now there was the dollar inflation since 2007... and all the bailout money that had to agregate somewhere, I think one could assume this sum to be in the 2 trillion $ region this year.