Meanwhile, no reasonable scenario, starting from the present, forecasts sustained increases in household income sufficient to swell income tax receipts meaningfully. In stark contrast, household incomes likely will remain under assault given foreign outsourcing opportunities and proliferating options to replace human labor brought to the fore by advancements in technology. To cure our fiscal woes, why rely primarily on income or new, far-reaching consumption taxes, when there may be a politically "painless" alternative? According to estimates prepared quarterly by the Federal Reserve, the pile of wealth (defined as "net worth") controlled by American households and nonprofit organizations stood at $74.8 trillion on June 30, 2013, 16.3% higher than the previous peak level of $ 64.3 trillion on Dec. 31, 2007. Why boost income taxes by gigantic percentage amounts to close annual government deficits when one might tap all households for a "measly" 1.5 % of total household net worth, or just the truly rich for a higher percentage? After all, according to one estimate by Professor Edward N. Wolff, the top 20% of American households held an average of 84.1 % of total net worth and an average of 92.3 % of net worth excluding personal real estate, measured every three years between 1989 and 2007. Figure 2: Estimated Shares Held by the Top 20% of all U.S. Households of Net Worth and Household Income
Source: The Size Distribution of Wealth and Income, 1983-2007 in Edward N. Wolff, "Recent Trends in Household Wealth in the United States," published in March 2012 by the Levy Economics Institute at Bard College. This heavily skewed distribution of wealth is far less egalitarian than the frequently decried distribution of American household income. According to the same study cited above, household income for the top 20% averaged "only" 57.3% at slightly different measuring points every three years from 1988 through 2006. Could the richest among us be enticed to cure America's vexing economic ills by "contributing" a small portion of their monumental holdings?