I got to thinking that maybe he was talking about the top 1/10 of 1 percent, as Paul Krugman mentioned in his editorial in the New York Times. Here's a paragraph or two:
But these same politicians are eager to cut checks averaging $3 million each to the richest 120,000 people in the country.
What — you haven’t heard about this proposal? Actually, you have: I’m talking about demands that we make all of the Bush tax cuts, not just those for the middle class, permanent.Well, whether you agree with making all of the rate reductions permanent, or just some, the problem I have with Krugman, Nobel prize or not, is the above statement is hyperbole. He doesn't mention until later in the article that the $3 million dollar check would actually be 10 checks over 10 years, averaging about $300,000 per year.
Also, the figures I saw from the Tax Foundation (using IRS data), the number of people in the top 1/10 of 1 percent is 141,000 not 120,000, so I'm not sure what source he's using.
The average income of the top 1/10 of 1 percent is $7.4 million. Currently, the tax bill on that is $2.56 million. If the cuts expire for the top bracket, the tax bill goes to $2.865 million, an increase of $305,081. Here's Krugman's $3 million -- over 10 years.
He probably chose the $3 million over 10 years just to inflate the numbers. He doesn't mention the $3 million is over 10 years until later in the story, almost as an after-thought.
When reading Krugman, you must remember that he is a liberal, a self-admitted liberal who believes in big government. After complaining about deficits for so many years, he now supports even more government spending.
But I believe his economic theories aren't working. Nobel prize or not.