In my hypothetical situation, the USA population takes enough money away from the top 1% so that they are no richer than the average person. That money is then redistributed to the lower and middle class in the country. How much better off would the lower and middle class be if this happened?


I assume the following:

  1. We redistribute wealth (not income) from the top 1% to the bottom 99%
  2. Everybody among the bottom 99% receives the same amount.

Source for my data: World Income Database

In 2014, the average personal net wealth among the top 1% was around \$11 million in 2017 prices. The total wealth to be distributed is hence (3.3 million people in the top percentile $\times$ 11 million) = \$36.3 trillion ($3.63\times10^{13}$).

This means that everybody among the bottom 99% receives around \$111,000. How much this makes you better off depends on your initial state. Concepts of low- and middle-class are somewhat ambigious. According to the WID data, net personal wealth among the bottom 50% is essentially zero, and \$205,000 among the 50 to 90th wealth percentile.


Please note that this is a purely mechanical and unrealistic exercise. For starters, it ignores legal and administrative hurdles. A major concern is also that a substantial share of the private wealth of the top 1% is invested in productive firms which employ millions of people. What happens to their employees if you expropriate the owners of these firms?

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    $\begingroup$ Although this answers the specific question, it should be noted that a) it ignores the costs of administration and enforcement, and b) the indirect economic effects of the redistribution via changes in incentives, propensity to consume, etc. $\endgroup$ – Adam Bailey Jul 8 '19 at 9:54
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    $\begingroup$ point taken. I qualified my answer a little bit. $\endgroup$ – E. Sommer Jul 8 '19 at 9:58

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