Help! Did I hear this correctly? I understand that last Friday portions of a recorded campaign speech were broadcast on the radio. Did Vice President Joe Biden really tell an audience that the Republican platform included a $500T tax break for the wealthy?
The entire personal wealth combined for all households in America is only about $56T. And for the more than 115 million households in this country the total realized personal income for 2012 will be approximately $8.5T. In fact, the $500T figure exceeds the entire personal wealth held by all households in the world!
Is there some hidden underground economy that accounts for the $500T figure? If there is, please let me know.
What if the government “taxed/confiscated” all the personal wealth and all the personal income in America? The resulting figure still could not come close to the $500T tax break alluded to by Mr. Biden.
Dr. Stanley,
Clearly Biden misspoke and meant $500B, not $500T. I watched the clip and I’m guessing that he’s talking about the vote against letting the Bush era tax rate for family incomes over $250,000 expire and return to a rate of 39.6% from 35%.[1]
Simple arithmetic shows that 120,000 families splitting $500B would be a tax break of ~$417,000. Now using the 4.6% tax break we’d get that the average income for these families would be ~$9.25M.
Now your expertise comes in and let me know if it’s reasonable that there are 120,000 in the US that could be making about that average income a year.
Please don’t let your politics get in way of your common sense. That “analysis” took me all of ten minutes.
@Chase,
The point is not that Mr Stanley couldn’t do that same math, but rather that the VP would have such a poor grasp on his own arguing points to make such an enormous error adding to the extreme exaggeration being utilized by all of our political candidates. Unfortunately many who heard that Biden comment don’t have the logical reasoning skill necessary to do the math you did and will take it at face value only increasing their dislike for those who are wealthy (for the record I am not wealthy as all who defend them seem to be lumped into the same category, I make less than 39k a year).
Chase, thank you for that excellent point.
I’m disappointed when this blog veers into political discussions. I’ve always believed that millionaires next door are connected by their desire to be financially independent and their frugal lifestyles that allow them to reach that goal. One’s political affiliation is not a defining characteristic of a millionaire next door, and I like that.
Certainly Dr. Stanley has the right to say what he will on his blog, I just never thought that it was the forum for political shots (particularly cheap “gotcha” rants like this one).
@ Mark – I agree with you. I was disheartened to see a political message on this board, whether it was pointing out a mathmatical error or highlighting a politico’s misspoken phrase. That’s not what I’ve come to expect from this forum.