The Top 400 Taxpayer: Now You See Him . . .

The media often treat the highest-income taxpayers as members of an exclusive club. Some club! Most members get thrown out after a single year.

The Internal Revenue Service has now published data on the top 400 taxpayers for 17 years. Over that period, according to the latest report, all but 27 percent of the highest-income taxpayers have been one-year wonders. Most of their income is capital gain, usually from the sale of a business.

Robert Frank's Wealth Report cites that rapid turnover as evidence that the ranks of the rich change rapidly. Not necessarily. The taxpayer who sells a business for $500 million or Lake Shore high rises for $300 million is already rich. After the sale – and a one-year membership in the Top 400 Club – the taxpayer is only slightly less rich and much more liquid.

And a much better prospect for investment services.