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1% of the population with 20% of the wealth?!
Sounds like a job for Taxation Man!
Or does it?
The problem with those numbers is that while they make good headlines, they're almost irrelevant in the larger debate.
Imagine if you effectively taxed that richest one percent, and took away half their money. So far so good! You've freed up 10% of the nation's wealth. Then, when you try to redistribute that wealth, you discover than an extra 10% really doesn't keep very many of the other 99% out of trouble.
For someone earning $5.00 an hour, $5.50 is not a "get out of wage-slave jail free" card. $9.00 might be, but you don't get there by confiscating 50% (or even 100%) of the income of the nation's richest. The maths just doesn't add up. But let me just make it clear that I'm not advocating voodoo economics, either.
The "real killas" in economy terms, and certainly in income redistribution terms, are the middle classes. Policies that enable them to rack up huge household debt (which Andrew mentions), to believe that their long-term financial interests are served by highly leveraged purchase of 2nd and 3rd properties, to easily lose health insurance and thus slam straight to the bottom of the asset tree --- those are the problems.
Not the richest 1%. That's just the go-nowhere politics of envy.
Convincing the middle classes to invest wisely and vote for safety nets, though, is really, really tough. Getting them to vote in their own interests is tough enough -- getting them to act in their own interests may well be the very definition of a Sisyphean task.
