Why Should Rich People Have To Pay More Tax?
In light of the recent debate regarding the expiration of the Bush tax cuts, I thought I would air my thoughts on this subject. With due deference to Karl Marx, I seek not revolution, nor the eradication of class structure, as I feel that heavy handed social engineering comes loaded with it's own control issues– be it from the left or the right. Neither do I want my thesis to be doctrinaire, or to divide people by defining them as either "bourgeoisie" or "proletariat" – class divisions in America in 2010, I believe, are infinitely more complicated than they were in Royalist Europe in the mid nineteenth century. But also I want to write this in the language that we all speak, day to day, because despite our inherent individualities (which my gypsy nature is predisposed to advocate) the way we express our feelings, and the kind of world in which we want to live are probably not so dissimilar from our neighbors, rich or poor. I think simple fairness is what we are all looking for, nothing more complicated than that. It is how we define fairness that gets us into trouble. And so in the spirit of coming to an equitable definition of the word, I offer this:
MY LITTLE MANIFESTO OF SOCIALISM LITE
So why should rich people have to pay more taxes?
On the face of it it doesn't seem such an unreasonable question, People work harder to make more money– why should they be punished for doing more, when less productive people receive all the benefits? If everybody paid the same percentage, then wouldn't rich people be paying more anyway? Seems fair... no?
Okay, let's leave aside the idea of tax loopholes for the wealthy, and assume that we could come up with a simple flat tax for everybody that had no loopholes. I know that I am fantasizing here, but for the purposes of this discussion it doesn't really matter how the very wealthy can manipulate the tax code. That topic can be saved for another day. The issue here is, simply, "should they keep the same percentage of the money that they have earned as those less wealthy?" Or, "should they have, in fact, earned so much in the first place?"
So now we've hit another obvious question: what do we consider wealthy? Obama has set the dividing point at families who make over $250,000 a year. To my mind, putting $251,000 a year into the same category as someone who earns $80 billion a year is a little arbitrary. It may be an attempt to diminish the egregious feeling most of us get when we think of somebody actually getting paid that much. But there really is a big difference. Look at it this way... 1 billion is 4 thousand times 250 thousand. The year that Bill Gates made $80 billion, he made 320 thousand times as much as a family that makes $250,000 per year. And that's what we define as a very wealthy family (remember, if you get minimum wage you earn about $15,000 a year– many families still earn less than $30,000 a year combined). To put it another way, they would have to keep working until the year 322010 in order to earn the same amount. I doubt if our species will be around until, then but hey!
Does this seem fair to you? Probably not... but wait, we don't want to be running a country based on what seems fair to some people. Is there some rational reason why this may or may not actually be fair? Let's take a closer look at this situation... but first lets see what we used to think was fair:
In 1965 the average CEO in the U.S. earned about 24 times as much as the average worker in his company. By 1978 that ratio had grown to about 35 times as much. By the 1990s that ratio had surged to 300 times as much, but then dipped in 2000 when the stock market took a fall. In 2005 it had resurged slightly to where the average CEO was now making ($10,982,000) 262 times that of the average worker ($41,000), but 821 times as much as a minimum wage earner (who at the time was only making $5.15 per hour).
Now this is of course only the average and doesn't fully describe the wealth of the very richest people who make thousands of times as much as that proverbial CEO. The aforementioned Mr. Gates, along with Warren Buffet, Paul Allen, and the entire Walton family whose combined earnings blow everyone else out of the water– so to speak, do make it hard for us mere mortals to understand how they could possibly have worked so hard to have made so much money... legally.
Americans tend to have an extremely strong work ethic; perhaps the legacy of the Puritans who founded this rock. In the early 20th Century, many Christian religious leaders condemned the stock market as being ungodly... a form of gambling. They believed it was not right to take money for which you had not worked. I believe that many of us still have that ethic, somewhere deep down. I think many of the "Tea Party" people feel this way, but have naively succumbed to the manipulations of the very same wealthy class whom they aspire to denounce. They are cajoled into condemning those in poverty, whom they see as being lazy and looking for a handout, and revering those who are successful and affluent, because they "worked hard to get where they are and deserve to keep their success." It is a convoluted nightmare of sloppy thinking, and yet it pervades a good portion of the country. But before we try to untie the knots of all these unreliable categorizations, let's first ask ourselves this question: is a strong work ethic necessarily a good thing?
Let's consider the alternative– even from a strictly capitalist perspective. People who earn money without producing anything, are not actually contributing anything to the system which supports them. They are in essence a parasite upon their community. Now I make no judgment about parasites, in nature, a parasite is not always a bad thing. Many parasitic creatures supply a service to the host. They clean or remove other, less useful parasites. In business, you may not create the product, but you sell it. That is a useful role. You may do the paperwork, you may hire the staff, you may fetch the coffee... all these roles are necessary, and require a certain amount of work. But what role does a stockholder play? And what work do they perform? Are they somebody who was just lucky enough to have the cash to invest in something that has a good payout? And what rights does that bring with it, as compared with someone who actually does the work.
If we had no system of stocks and bonds, we could still have a functioning society. Trade existed for millennia before the stock market came into existence. But if we only had a stock market, and no production, well...
So perhaps this is one way in which we can compare the respective value of elements of our economic system. Another way would be to examine what it is that Americans value on an emotional level. Kit Carson, Buffalo Bill, Davy Crocket, Thomas Edison, Henry Ford, Bill Gates... these were and are people– whatever you might think of their morality– who did a lot of stuff. That good old American get-up-and-go, and that good old American ingenuity. Yes it involved the genocide of the native peoples, the extinction of the bison, the wholesale destruction of nature, the pillaging of other countries, and the pollution of our own air and water... but we are mostly willing to overlook those little details because that kind of attitude accomplished the creation of this great big thing we love to call America.
Well then, which is more important– ingenuity... or get-up-and-go? Is it the idea, or the execution which has the most value. My father always used to say, "genius is ten percent inspiration, and ninety percent perspiration." So by his reckoning the act of building the damn thing was nine times as valuable as thinking up the stupid idea in the first place. "Any idiot," he would say, "can have an idea," (I'm sure we can all remember a few doozies that we've come up with) "...it's the guy who goes out and builds it that is doing something worthwhile."
I'm sure if you or I came up with that perfect mousetrap, but never did anything about it, and then later discovered that someone else had also thought of it... but built it– we would not begrudge them the profit. After all, we could only blame our own laziness for not having achieved anything. But what if we had an idea that we couldn't build, and we met someone who could? How would we share the profits from such a collaboration? According to my father's calculations, that would have to be split 90/10 in favor of the other guy. (I'm not sure my father himself would go along with such a deal– unless of course he was the other guy.) This doesn't take into account that some ideas may be very simple, and the construction process might be hellishly arduous, whereas other ideas may have taken years of hard work to come to, and the construction process is fairly easy. Let's just say, for the sake of argument, that both contributions are equally important, and we split the dividend 50/50.
Okay now we run into a problem with the construction. We need a part that the builder, José, does not have the strength or know-how to build... or the right equipment... or whatever. We need a third person, a specialist without whom we cannot continue. We get a guy whose name is Vishnu, but he wants a third of the profit. We tell Vishnu that he's out of his brain... we'll give him 20%. This leaves us 80% to split. José thinks he's getting half of that, but I tell him that it should come out of his share because he was supposed to be able to build the damn thing by himself. Anyway, after a bit of back and forth he agrees to 35% leaving me with lion share at 45% – which makes me feel good. It was my idea in the first place, and I should make the most. (Right now my father is rolling over in his grave.)
Now we all realize that we're none of us making a hell of a lot out of this if we just make one item. We need to produce a lot of these things in order to make any money. José tells me he's got a bunch of family members who are just sitting around the house who can help out. But I don't want to cut anybody else in on our profits– which is fair enough, he tells me, his family just wants to be payed for their time... decent pay... and, oh yes, benefits. Man... they need health care, and a living wage. Well, we don't have any money to pay them with, so we go to a rich dude, Wolfgang, and ask him for some investment. He thinks we got a good idea here, so he says he'll buy in and fund the factory if we sell him 60% of the company. We think Wolfgang is a nut-job so we go somewhere else. After endless meetings with other investors, we realize that Wolfgang was offering the best deal we could get, so we break down and sell it to him. We can't figure out why he deserves to have such a large share, but he's got the power, and we've got no choice.
Capitalist doctrine might tell us that if our product has enough value, then we will get the right price for it if we shop around. But this is not true when dealing with the very wealthy. They didn't get wealthy by paying a fair price for a fair deal. They got wealthy by paying less than it was worth, and selling it for more than it was worth.
The first thing Wolfgang does, is to tell José that we can't use his family. He just made a deal with a factory in the Philippines who can make the same item at half the cost. The workers in the Philippines don't have the same rights as they do over here. José is a bit peeved at first, until Wolfgang explains to him that his percentage is worth more when costs are lower. His obvious happiness regarding this issue creates problems at home.
So now we've gone from something that was a fairly negotiated settlement between comparative equals, to a situation where one person has a completely unbalanced amount of power, and a group of people (the workers in the Philippines) who have almost none. How then is there going to be any fair negotiation made now regarding how the profits are dispersed? Clearly, neither the person who had the idea, nor the people who built it are going to be the main beneficiaries of this deal. Ingenuity and work ethic are both losers here. The winner is just some guy who was lucky enough to have a bunch of moolah to invest. And his luck now also endows him with some pretty amazing rights, the least of which is that if his company does anything illegal, he can't be prosecuted.
The Libertarians will tell you that it doesn't matter. We live by the law of the jungle, and that the lion will rip off the biggest chunk of meat and then the hyenas will share whatever is left. But even a lion doesn't eat four thousand times as much meat as the smaller animals, and when a lion does get too greedy, twenty or thirty hyenas will take him down... and that will be the end of that lion. Now I'm not suggesting that we kill and eat very rich people, but the Libertarian idea that we all deserve whatever we can grab does seem rather easy to refute. By that definition if somebody beats you up and takes your wallet, they deserve the money they get. Essentially, they are saying that we should abandon all the laws that prevented the robber barons of ancient times (and also of American times) from continuing their greedy ways. I don't know about you, but I don't see that it's in my interest that Andrew Carnegie built himself a golden palace on a hill overlooking the Atlantic Ocean.
On the other hand, the Libertarians should acknowledge that if a group of us hyenas do want to take down the rich and mighty, well maybe that's also the law of the jungle at work. Surely we have the freedom (and in fact the duty) to gang up on those who are messing with our lifestyle, who are wielding inordinate amounts of power over us and others, and taking a bigger piece of the communal pie than we all think they deserve. Let's face it, you just can't come up with a rationale for any one person at a corporation making even a hundred times as much as the average worker... let alone a thousand! Do you really think that's fair? The way we little hyenas gang up in our culture is to put laws on the books that control that kind of wayward behavior.
There are many supposed Libertarian Tea Party members who have no objection to laws that take away freedom from other people. They don't mind telling people they can't marry, or serve in the military if they are gay, they don't mind laws telling people that they can't smoke marijuana, but they don't want to be told they can't carry their handguns when they are getting drunk in a bar. They don't mind huge government spending for the military when it deprives people in other countries of their lives, their freedoms and their civil rights, but they don't want to be deprived of their own freedom to discriminate against blacks or Mexicans. They don't mind their tax dollars supporting the industry of corrupt mercenary corporations, and corrupt construction corporations who steal from them, but they don't want that money being spent to feed homeless kids in the ghetto. They don't want to bail out banks or auto companies, but they don't want any regulations upon those companies either, and they can't stand the idea of taxing people who are insanely wealthy, because then they might be considered "socialist."
It's not socialism people. it's not communism either... it's just self interest.
None of those issues are right wing or left wing. Freedom should mean freedom for all. Fairness should mean fairness for all. Why are we regulating people who don't do us any harm as a society, and deregulating those that do? Everything is topsy turvy because America has a mental problem with a word. But the mental problems that America has are exactly what the unfairly wealthy will exploit in order to remain just that. And that will never change as long as money... huge unchecked amounts of it, are funneled to small groups of extremely powerful people.
Firstly, before anything else, we need campaign finance reform with teeth.
Again, it is not a socialist idea, it is in some ways quite capitalistic, and definitely very patriotic to regulate how money flows in order to benefit your country the most. So once again I ask:
Why Should Rich People Have To Pay More Tax?
And the answer is this:
Because they make too much stinking money in the first place.
In a capitalist system, money chases money, and money attracts money. Over a short period of time, most of the money will end up in the hands of a few people, and the system will collapse in on itself. When one person ends up with all the money in a Monopoly Game, the game is over. It ALWAYS happens that way because that's the way the game is set up. For the good of the system, money HAS to be redistributed in some form or fashion. That's where government steps in. This redistribution allows the masses of people to buy the products of the capitalists. When rich people get too greedy and forget that money has to be redistributed for their own good, then they end up destroying the goose that lays the golden eggs. And here we are again.
ReplyDeleteA few random thoughts.
ReplyDeleteThe communal pie isn't either communal or fixed.
People who save and take risk through buying stock or other investments which provides capital to others aren't parasites any more than a person who decides to use the same money to buy something today. There are people who have saved and invested who are worth millions who have made not one penny more than people who have squandered and spent. We tax savings at the Federal level but we don’t tax consumption. Maybe that’s why our economy is built on consumption?
There is no need to demonize those with ability, foresight or luck for their good fortune, it is their good fortune that creates their increased stake in a stable society. That increased stake is reason enough to tax higher income at a higher rate.
I would also suggest that a vast majority of the people don't think the government is providing value for the amount that is spent. That in itself is a good rational to be suspect of those who want to increase taxes.
Hey Mario and Tiffany!! Bob, aka drummer for VERGE here. I liked what you had to say but I want to address one subject you brought up and make a few comments. You asked, "What role do stock holders play?"
ReplyDeleteThere is one basic fact about all businesses, no matter what type of business it is or what product or service it sells or offers. The one basic fact is that an overwhelming number of ALL new business startups, and I mean approaching 90%, FAIL. The business owner has a good idea but a bad business plan. Or he may have a good idea and good business plan but no market for his product or service. Or he may be a terrible business person. Whatever the combination, most businesses fail and fail within the first year. So, the first role stock holders play is that they assume RISK. They assume risk, in effect make a bet, on whether a business will succeed for fail.
So, this bet that stock holders make, when they buy shares in a company, they provide the company or business owner with CAPITAL. All businesses require capital to function. If you're a baker, you need pots and pans and ovens and flour and a place to put your ovens. If you're a car mechanic, you need tools, expensive tools, and a place to fix the cars in. If you write software, you need computers, probably quite a few of them... etc... Businesses need capital.
Before stock markets, most businesses were either sole proprietorships, individuals providing a service in order to scratch out a meager living or in the case of manufacturing or other capital intensive businesses, started by people who were already rich and had their own money to invest. You could form partnerships or try to find investors on your own but in the end, all businesses were by definition, private companies.
Stock markets introduced the concept of a public company. And all modern stock markets have embraced the concept of transparency. And stock markets have become business engines; a means by which people, who 100, 200, 250 years ago would have been unable to get their business ideas off the ground, can bring their ideas to fruition.
Granted it's not perfect. Even with the transparency rules we are still plagued with scandal and fraud.
So stock holders assume risk and provide capital for prospective business owners.
Stock markets spread that risk across larger groups of people and act as business engines to provide access to bigger pools of capital so business owners can expand their businesses.
So stock holders and stock markets have given opportunity to people who never would have been able to the start businesses the needed tools to do so (whether some or even most people SHOULD start a business is a different discussion). This has also had the effect of a widening the distribution of wealth. Granted the disparity in income distribution is a serious issue. One one worthy of serious discussion. But before the advent of capital markets, income distribution could best be illustrated by a the image of a giant hourglass, granted one with a much larger bottom than top, but clearly almost no middle. Capital markets have helped create a large expansion of middle.
Going forward however, the real problem as I see it is that we may be returning to the image of the hourglass, only this time, besides the disappearing middle, income disparity will make the top many times lager that the bottom. Eventually, top heavy things, trees, boats, you name it, fall over and die or sink.
Here is a 10 minute video that address the basic idea of capitalism and it's benefit to society, as well as touches on some aspects of the Tea Party movement:
ReplyDeletehttp://www.youtube.com/watch?v=KkXI-MNSb8Q&feature=related
your example of a guy with an idea, then a guy who can make the thing, then the guy who finances it, etc... are all well and good, but what if i do it all? what if i have this brilliant idea for a product, pay to have a small batch of them made, and they sell. so i make a bunch more, and more, and the business grows, and i dump my life savings into it, and then get a bank loan, and build my own factory, and ship everything out myself, and hire all local people and pay them above the average income for unskilled laborers with benefits, and in the process i get filthy stinkin rich? do i not deserve the large amounts of money i made? should i get taxed at a higher rate than you just because i have the ability to produce wealth and you dont? should the government have the right to come to my house, and under threat of jail, demand that i pay another 10% of all my money? 20%? 50%? should a gun be placed against my head if i refuse to give away most of my hard earned money just because the masses are jealous that i created a better life for myself and my family than they did or could? because this is what you are talking about. you are talking about the have nots, out of jealousy for their meager means using force to take from me that which they have not earned. the example you used was a very narrow examole, but the end result suggested here, of over taxing the rich affects everyone, regardless of how they came about their money.
ReplyDeleteHi Bob,
ReplyDeleteI am not in any way suggesting that having stock is bad or should be done away with. All I'm asking is that we keep some kind of balance on what is a fair return. When Michael Eisner at Disney (who was earning $100,000 per hour) refused to give workers in Burma who live in bamboo shacks a 46 cent per hour raise, because "Disney doesn't negotiate with Unions" I think most Americans would have been horrified to hear this. But the stockholders didn't want to lose one penny of their dividend. It's just simply not fair, but it is greedy. More regarding stockholders see below:
Anonymous
ReplyDeleteI'm not sure if you are the same anonymous in each posting but regarding the last one:
First of all, I am not arguing against capitalism - just unchecked profiteering which to me (and I think to most Americans if they took the time to examine it) is akin to piracy or mugging.
Anyway, I don't know if you have ever worked in a corporate setting or not, but it seems to me if you did, or if you simply chose to research it a little with honesty, you would see that that is not how business works.
If you did use all local workers, paying them a fair wage, giving them the kind of benefits and security they should have, if you followed all the laws regarding toxic dumping, air pollution etc., and got your product price point to a place where consumers would be willing to purchase it, the odds that you would be earning 200 to 1000 times as much as your workers, are low. You're also not defining what you mean by "filthy stinking rich." A million, ten million, a hundred million. Bill Gates is worth 500 times as much as that last one. Doesn't some part of you feel just a little queasy about that? Doesn't it seem a little greedy? Wouldn't you be just a little selfish to want that in the first place?
This comment has been removed by a blog administrator.
ReplyDeleteRegarding taxes... are you saying that the government should not have the right to force you to pay whatever taxes that the population of this country deems fitting? They are, after all the representatives of the people of your country. Are you not enough of a patriot to live by the laws of your own country. Or are you saying that somehow they do not truly represent the people? Perhaps their opinions have been corrupted, bought and payed for by... who, I wonder? Lobbyists? Lobbyists who work for... who? Oh yes... major corporations with CEOs who make anywhere from 200 to 5000 times as much as you do. And you really think your vote means as much as their's does?
ReplyDeleteThey have huge marketing machines that are very good at selling you the ideal of an impossible American dream. One in which you own this great corporation which makes you stinking filthy rich even though you haven't broken any laws, and have been fair to everybody that works for you. That's a nice little fantasy you got going there Anonymous. But it's not going to happen to you or to most of us. The people who sell us the fantasy can guarantee that, by getting us poor suckers to support them against our own self interest by dangling this dream that maybe one day it will be us making all that money, and then we don't want the evil government– that we helped them to buy– coming in and holding a gun to our heads. We're working against ourselves here, anonymous people!
Sure, go ahead, make yourself a good profit... I have nothing against that. Just leave a little for the next guy. Just be fair to those around you. Not just in business, but in relationships, in life. That dream of being filthy stinking rich, and having more than everybody else is just a childish fantasy that many people never grow out of. What's wrong with just being comfortable?
Mario - Bill Miller here. How else can I respond to this (Socialism)? My response is a lot more than your character limit.
ReplyDeleteBill Miller here. My apologies for the delay in this response. I just completed an exhaustive review of the convoluted, misguided, fundamentally flawed “My Little Manifesto of Socialism Lite.” Serpentine logic is not only time consuming but physically draining as well.
ReplyDeleteI have decided the best approach is to address each paragraph or associated paragraphs based on their content rather than chase the flailing tail of the dragon. But first I would like to establish the basic premises on which the United States was founded as a free, capitalist society. Those premises are: a) Private Property and ownership and b) freedom of opportunity, not guaranteed outcome.
Having said that, here goes…
Who are these wealthy and what tax loopholes are they exploiting. Well to be sure, the term “wealthy” fluctuates almost daily in its dollar-value definition. But, whoever they are, they don’t seem to be exploiting their enigmatic loop-holes to the extent one might imagine. If we go to http://ntu.org/tax-basics/who-pays-income-taxes.html or just go to the IRS directly, we see that the top 1% of earners ($380K/yr and up) pay 38% of the income tax burden to the federal government. In fact, the top 10% ($115,000 and up) pay a total of 70% of the income tax burden. That means essentially those who are the other 40% of the top 50% pay 30% of the income tax burden. How can that be you ask? Simple: Because the bottom 50% of the working population essentially doesn’t pay income taxes. So right away there is a fallacious argument as to what’s “fair” and what isn’t. The truth is you either pay income taxes or you don’t and half the working population in the country does not pay income taxes. And just in my humble opinion, if you don’t pay income taxes you DO NOT HAVE A SAY IN HOW THOSE TAX REVENUES ARE SPENT. You are not vested in the country. Just like if you don’t vote, you don’t have a say.
Now in reality we do know that anyone who spends money on anything pays some kind of “sales” tax regardless of their income level. After all, corporations don’t pay taxes, now do they? They pass on their tax burden to the consumer by adding it to their pricing. Basic economics 101 here. And a double-whammy to the consumer. So perhaps in reality…this type of consumption tax is the fairest means of taxation. Remove all top level taxes on productivity and simply tax at the base “retail” level on consumption. That is another argument for another day…
Continuing...But I digress. So let’s see… those wealthy, “should they have in fact earned so much in the first place.” Well at least it is acknowledged that they earned their money. But really do we have an average CEO making $10 Million+? Me thinks not and also at least according to the AFL-CIO executive pay watch http://www.aflcio.org/corporatewatch/paywatch/. They say $1.1 Million. And who are we to argue with the union guys. We all know how forthright and honest they’ve proven to be over the years. I, for the life of me, don’t know why everyone likes to pick on Bill Gates or Warren Buffet. The two of them give $30 Billion to charity…what’s to pick on? Gates has built the most impactful company of the last 30 years and certainly one of the top 10 in the last century. He has made hundreds of millionaires of people who work for him and have invested in his company. What’s to hate? I know you Apple guys have been unhappy over the years because Gates made the right decision and Jobs didn’t…but at this point in time I’d have to say Jobs is up there now too. So why can’t we pick on him for a change?
ReplyDeleteLet’s see…so in 1965 we had CEOs at 24 times Average Joes and today we have them at 300 times Average Joes (at least so you say, according to AFL-CIO that’s probably not true.) Well, the GDP in 1965 was $700 Billion. Today it is $15 Trillion. Any questions? http://www.forecasts.org/data/data/GDP.htm
And what about the Rock stars and Sports stars and Hollywood movie stars? How about all the compensation they receive? It’s just not fair. I think everyone should have free access to music and movies and sports events without having to pay. At least the Gates’ of the world have built something productive and contributive to society as a whole. Their money is earned on their vested interest in a company and stock ownership. Their successful stewardship of the company and its growth and profitability for other stockholders, more and more of whom are Average Joes, is what gains them “value” to the company. They don’t “earn” your purported “$80 Billion” in salary as is implied by the flawed comparison to an Average Joes wages. They have value via stock (ie. company) value.
And more...The American work ethic remains strong to this day. But in fact, the public has begun to question more and more whether certain elements fall into the category of those “They believed it was not right to take money for which you had not worked.” And of course I am referring to the hooligans and thieves on Wall Street. Even I myself find the thought of the money they make without producing a single thing of intrinsic value, to be corrupt and usurious. I suppose it is the complete charade that was the “.com” era that leaves a bad taste in most people’s mouth…compound that with Fannie Mae, Freddie Mac, AIG etc. etc. and we all get it. Then we pay to bail them all out and they refuse to lend money so small businesses; the bulwark and back-bone of this capitalist society, might be able to grow. It’s enough to piss-off a die-hard Friedmanite. But even those unctuous snakes (having surpassed even lawyers at the bottom of the devolutionary scale) serve a purpose. The reality is the vast majority of earnings on Wall Street come from management and growth of massive trust and investment funds such as IRAs, Roths, Keoghs etc to the tunes of trillions of dollars. This is where more and more of the Average Joes have put their money for investment purposes: To gain value and income in the hopes that someday they will have enough to retire. And the faith of that Joe is in a) the Wall Street wolf’s ability to pick the right companies and b) the ability of the overpaid CEOs to manage, grow and keep profitable those companies. So this, as you pointed out in your subsequent blog is also a matter of perspective. Is it not? As the old saying goes…it’s a dirty job but someone has to do it. It is thankless, but it sure pays well. Sadly, the vast media exposure of the Wall Street rich has tarred and feathered all the rich as they are lumped into this category. The truth couldn’t be more diametrically opposed. The “rich” more and more are just Average Joes who have worked hard, earned and saved their money. They have built small companies and invested in themselves to grow something worthwhile and for which they have found a niche. They have put people to work here, not overseas as you suppose. In fact your Jose’ – who is probably here illegally – and Vishnu who is probably not here at all, are just pieces of the puzzle as an entrepreneur struggles to overcome onerous regulations and tax burdens that seek only to keep him from being successful. And ya know what, more often than not he will fail. But the American spirit is about getting back up until you succeed. Thank heavens for that. So what if he finds an investor who wants 60% of the company? When you buy a car don’t you expect to own it? A company is no different. And that means the guy who puts up the most money gets the most say. He owns the largest share. The objective is to get the product to market and grow the company. The way to mitigate ownership, profits etc. is through stock dispersals, bonuses etc. This is Finance 101.
ReplyDeleteStill more...And it is the incentive for all to work together to the common goal. They have a stake. Employee stock ownership is how Gates made so many hundreds into millionaires. But seriously…why does the 60% investor have to be “lucky” to have the money? “The winner is just some guy who was lucky enough to have a bunch of moolah to invest. And his luck now also endows him with some pretty amazing rights, the least of which is that if his company does anything illegal, he can't be prosecuted.” Is that your presupposition…the rich are that way by luck of the draw? How about that 26 year-old Facebook kid…luck of the draw? Or the Twitter guys? The Google guy? How about the guys developing the ZENN car? These are people who have come up with viable, marketable ideas. They managed to convert that 10% into the other 90% with the help, time, energy and investment of others. But anyone who gets involved a) believes in the idea b) believes it can be successful and c) is aware of the multitude of risks involved at all levels, including the FACT that if they are senior leadership and officers of the company they are liable for the actions of the company. God bless them for having the guts, because 99% of the people don’t have what it takes. Instead they sit back and whine expecting the government to redistribute from the makers to the takers. We have generations built on a victimization mentality fostered and stoked by a political class that promises all, delivers none and keeps expecting to be re-elected based on hope. I believe these people have been smoking hope! This is not a “communal pie” this is a private pie reserved for those who have earned it. If you want pie, get off your ass and bake it.
ReplyDeleteAgain more...And again a flawed concept: “Trade existed for millennia before the stock market came into existence. But if we only had a stock market, and no production, well...” How would a stock market exist without a productive company in which stock is held? Stock markets exist because of productive companies. Not the other way around. Just as productive companies exist to produce a product and a profit. This premise is the grounds for creating jobs. A company does not exist to create jobs; it does not owe jobs to society. It does not owe anything to society except to be a good neighbor and be profitable for its stock holders. Jobs are an incidental result of that success.
ReplyDeleteI do have to say though; I am a staunch believer that these banks should be returned to the segregated, regulated form they used to have; S&L or Commercial or Investment. Not all three at once as they are now.
As to final matters…I will bullet point these.
• As to laws against marijuana: I say decriminalize it, have the government regulate growth production, quality standards etc. then tax the hell out of it. It’s only fair.
• As to gays in the military: Have you served in the US military? No? Hmmm. Me, I don’t care one way or the other but having served, I would think we should at least let the guys getting shot at have a say. It’s only fair. And let me say from a personal level: As someone who has friends in harm's way and friends who have died, I find your characterization of our military to be repugnant. These are the people who die for your right to sit and be smug via a blog. They do not start wars; politicians do. But they finish them and die in the process, cleaning up the mess. Shame on you and your ignorance.
At last...• As to gay marriage: Gays are the ones making the word “marriage” the issue. Please define marriage for me. It is a term that comes from the church and as long as that is the battle they want to fight, they will probably lose. In fact the “legal” part of a marriage; the civil union, is allowed in more and more states and is in effect what resolves all estate, benefits etc. questions. Personally, I don’t care. Civil unions for everyone! But caveat emptor…divorce is the flip-side. It’s only fair.
ReplyDelete• As to all those other terrible things that you say we here in the US represent I ask: Why are you here? You clearly are not from here, as we know. No one is stopping you from leaving. Why not go back to one of the other utopian states in Europe or perhaps the new utopia China…or India? Honestly, to anyone who has nothing better to do than complain: Leave. No one cares. No one will stop you. But be sure to pay your taxes before you go. Because this is the US…and if you have earned income here, you owe, no matter where you are in the world.
And finally I ask this: Who are you or anyone else to say who makes too much or enough money? I dare say if it were you earning big bucks, you would probably have a mattress stuffed and shipped to an off-shore account. This country was founded on freedom of opportunity. No one has ever been guaranteed an outcome; if someone else makes more money, then so be it. That should be one’s impetus to work smarter and harder, not to steal from the successful because you don’t like the results. Everyone should pay some tax because government is a necessary evil if we want common public services. The real question is the degree of onerous wasteful spending on extraneous government services and entitlements at a level that we as a productive society can no longer afford. It’s not that we don’t pay enough taxes. In fact we pay far too much. The more we pay, the more government is inclined to waste the revenues. And THAT is the problem.
"The problem with socialism is that you eventually run out of other people's money."
— Margaret Thatcher
Dear Bill, sorry you were so upset by my Manifesto.
ReplyDeleteUnfortunately, your emotionalism appears to have made it very difficult for you to clarify exactly what point it is you are trying to make. You said you would respond to each of my paragraphs with a specific answer, but I cannot see that happening here. Instead I see a confused rant by someone who hears the word "socialism" and immediately loses all sense of perspective. You didn't really respond to what I said, because you simply did not hear what I was saying. We need to be open to each others ideas in order to have a conversation. Your use of personal attacks suggests to me that this is not the case with you .
If you could organize your thoughts more clearly whilst keeping yourself open to the viewpoint of others, perhaps we may be able to communicate. But having had conversations with you before I think this might be difficult for someone with your personality.
Briefly, regarding people in the armed forces... I am extremely sympathetic to those kids who get shipped off and are made cannon fodder for the the profit of large US corporations. This doesn't mean I have to respect their intelligence. I really don't feel they are protecting me, or anyone in the US from the hundreds of thousands of innocent victims of their carnage. If anything they are endangering the inhabitants of the US by making more people angry at us. By the way, we do not ask the members of the armed forces if they would be willing to serve with black people, or any other segment of society… so why should we with gays?
Lastly, the word "Marriage" has many definitions. I am just about to go outside and marry my garden hose to the water spout. Only religious extremists insist that the word has a solely religious meaning– it is a display of insecurity to insist in such narrow definitions of things. This country, after all, was founded upon the principle of many cultures with diverse viewpoints coming together and being able to hear each other. True patriots do not tell those with whom they disagree, to leave the country. If you cannot tolerate the American ideal of freedom of thought and expression, then perhaps it is you who should leave. There is a state that might be just perfect for you… it has a narrow minded rightwing government with an overly religious zeal, that is intolerant of sexual diversity or dissent of any kind. It is called Iran.