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Writing for the New Yorker, James Surowiecki floats an idea that we’ve discussed here before: instituting a new tax bracket on earnings in excess of $1 million. Clusterstock’s Joe Weisenthal isn’t entirely disagreed, but is skeptical that it would “move the needle” much in terms of revenue.

Fortunately, it only takes a few minutes to come up with some good working estimates, using data from IRS Tax Stats.

In 2007, essentially the last non-recession year (although technically the recession began in December that year), there was $1,244 billion ($1.24 trillion) in taxable income reported from 390,820 filers earning $1 million or more. However, a millionaires’ tax bracket would affect marginal income only, so we have to subtract out the income below $1 million earned by these filers, which is $391 billion. That leaves a pool of $853 billion per year from which to draw taxes. If you taxed it at 3 percent, you’d bring in $26 billion per year, or $256 billion over ten years. If you taxed income above $1 million at 5 percent, you’d produce $43 billion per year, or $427 billion every ten years.

If you were interested in instituting a further tax bracket above and beyond this at say $5 million in income, you’d have a basis of $436 billion in marginal taxable income from which to draw. A 3 percent levy there would produce $13 billion per year, or $131 billion per ten years, in revenue. A 5 percent levy would raise $22 billion per year, or $218 billion per decade.

Let’s say we go with the plan of taxing marginal income above $1 million at 3 percent, and marginal income above $5 million at an additional 3 percent. That would produce a theoretical $39 billion per year. However, there would be some productivity losses, and perhaps some additional offsets resulting from people finding ways to transfer their income into more tax-advantageous activities, so perhaps revenues on the order of $35 billion per year, or $350 billion per decade, are more realistic.

Is that a “lot” of money? Perhaps it doesn’t seem like it in comparison to some of the major spending programs of the past 24 months. But obviously it isn’t trivial either. This may be a helpful comparison: it would bring in slightly more money than if we were to increase taxes by 1 percent on incomes above $50,000, which would raise $28 billion per year before productivity losses.

Squeezing the super-rich is not a panacea. Although the inequity in the income distribution is pretty stark in America today, there just aren’t that many people earning over $1 million, or over $5 million, and you probably can’t squeeze them that much further before you start to run into some serious issues with productivity losses, particularly if the Bush tax cuts for high-income earners indeed get rolled back and the tax increases that we’ve seen at the state and local level over the past couple of years tend to stick, which I think is likely.

Nevertheless, at least based on this back-of-the-envelope sketch, creating one or more tax brackets at $1 million and up, and levying taxes upon them at a 3-5 percent marginal rate, could fairly easily offset a 1 percent or perhaps 1.5 percent tax increase on the middle class. That doesn’t mean that we wouldn’t eventually need to consider middle-class tax increases as well, although my preference would be to achieve them by means of a carbon tax, which would fall fairly heavily on the middle class if it weren’t offset, rather than an increase in marginal tax rates. But it can certainly be a part of the solution and it seems irresponsible not to discuss it along with other ideas.

Nate Silver is the founder and editor in chief of FiveThirtyEight.

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