Thursday, March 4, 2010


Bill Gates is rich.

No one would deny that.

How did he get rich?

Like most rich people, he earned his money.

He did not "win life's lottery. " He did not receive a great inheritance. He worked hard, took risks, was very innovative and it paid off for him.

While earning his money, he gainfully employed a great number of people in his business and helped support a great many others who sold his product(s) in their retail outlets at a profit.

Question: Why should I get one whit of what Bill Gates worked for and earned via the government?

Question: Why should Bill Gates pay any more for the roads I use, the firemen who protect my home or the police who protect me?

Question: If Bill Gates should pay more for some things, why not all things? Should Bill Gates pay $15.00 for a gallon of milk while I pay only $3.00? Should Bill Gates pay more for a given make and model of car than I do?

Just because he can?

That makes absolutely no sense in any way, shape or form.

It is pure class envy, nothing else.

Some people think, "He has a lot, so should I. "

That, my friends, is the difference between liberalism and conservatism.

You want more? Go earn more!

It is the government's job to provide you with the opportunity, not the things.

And it is wrong for the government to take a greater percentage of somebody's earned money just because they can.


Tom said...

I see you devoted a post to the "punish success" idea. For the record, my partner and I earn in the 98th percentile, so you're arguing a very large reduction in our federal taxation and a rise (probably) in yours.

There is no right or wrong answer to the philosophical question of whether wealthy people should be more wealthy, and middle class Americans should make do with less. However, it's a rather Darwinian view of society.

We sort of cringe at tax time every year, because the bill is more than what millions of Americans earn in a year by a very large margin. In fact, it's about $160K a year, depending on how business goes for year. But I look at it this way.. if the tax burden drops to say.. 10K, I could go out and buy a Lamborghini, and that would be a nice toy.

However, I understand that the fed has to take in a certain amount of revenue, and without arguing how much is enough, it does stand to reason that a reduction in our taxes means a rise in lower income Americans taxes. I've thought about it and while an extra new Lambo every year might be kind of cool, that would come at the cost of other people being able to.. buy a home.. put kids through college.. eat. You know.. essentials. I don't like that idea from a moral point of view. We're willing to pay more because of the tremendous benefits the rest of American society has provided to us. Even paying 30+% a year in fed taxes we're still comparitively wealthy.

I suspect the idea of a flat tax advocated by people in the middle class sounds good on paper.. but when it comes time to actually pay the bill... not so much.

Joe said...

Tom: "...cost of other people being able to.. buy a home.. put kids through college.. eat. You know.. essentials."

Where did you get the idea that owning a home is an essential?

I happily rented for years before I bought. Then I sold, rented, bought, sold, rented and now am in a house I (and the bank) own.

Where did you get the idea that college is an essential for kids, or that parents should foot the bill, let alone the governemnt?

As I said previously, I will be the last man standing defending the idea of helping people who CANNOT work due to physical limitations or mental limitations to get food, shelter or know the essentials. But I do not condede that we OWE a house to people, tht we OWE an education to people.

I think you should enjoy a reduction of your tax burden and should be able to buy a Lambo if you want one.

I think you should be able to keep at least 87% of what you work for.

Maybe you don't think so, or don't want that, but I want it for you.

Not one single able bodied, mentally suffectient person in America should be prevented from earning in the 98th percentile if they are willing to do what it takes to get there.

I am not willing to do what it takes to get to the 98th percentile, and therefore do not deserve to be in that category. I DO deserve to be whererever I want to be, without restrictions imposed by the feds.

If the fed did what it was mandated to do, there would be plenty of revenue if the tax rate was between 10% & 11%.

On the other hand, if the fed takes on the responsibilities that should belong to individual citizens, then we can say "Good-bye" to the American dream.

I hope you get that nice day.

Krystal said...

Joe, you are so on target! We are expecting #6. If any of our children want to go to college, they can do well at school to get scholarship money and then get a job to cover the rest ... the same way we did.

Tom, I appreciate that you don't mind paying more to help people. However, you'd help a lot more people if the government didn't tax you and then spend 50%+ on red tape. I say let you keep YOUR money and let YOU decide who YOU think deserves help!

As a conservative, I believe you're a smart enough man to make those decisions on your own. A liberal says you're not, so the government takes you money and redistributes it the way THEY see fit.

Joe said...

Krystal: The typical liberal has the idea that he/she can do whatever he/she wishes with the money left over after the government confiscates its 30%+.

The typical flat-tax conservative thinks that same liberal should be left with a constant, known amount (90%, or so)and should be able to keep it to do with as he/she pleases.

Conservatives think he/she is even smarter than he/she him/herself believes.

Alas, the liberal thinks the government is smarter than he/she is or than you and I are.

That's not very smart.

Tom said...

Ya.. home ownership and college was a bad example. Those aren't essentials, that's true. I think there are some essentials that would be impacted though.

Still, I think taxing everyone the same rate is a bad idea for a number of reasons. You might think it's "fair", but you are in a very small minority I would guess.

I still think that the people who advocate for it are just blowing smoke. It's easy to say when the tax bill doesn't actually show up. It's just a mental exercise in any case. We all know it's not going to happen.

I wonder what you think about anti-trust laws? By similar logic, shouldn't large corporations be able to price fix, or merge to form monopolies? Isn't the government meddling in the "free market"?

Leticia said...

I am also against the inheritance tax. It is very wrong and unfair. Think of it, parents work their butts off to leave something behind for their kids and the government believes that they have entitlement to that money. Wrong in so many ways.

JMK said...

The current U.S. tax burden is far too high, especially for a nation devoted to limited governance, the pursuit of happiness/property and free enterprise.

The top 10% of income earners in America pay over 71% of U.S. income taxes.

They garner appx 44% of all aggregate annual income.

The income tax period is an extremely dysfunctional tax. It punishes, or burdens productivity/work/entrepreneurialism and doesn't tax the truly "rich" (those who do not rely on income for wealth) much at all.

Income is the least effective wealth generator, which is why there is so little overlap between the top 15 of income earners and the richest 1% of Americans.

Sadly, the Flat tax is still an income tax that punishes productivity and disincentivizes work. Yes, even a 20% Flat Tax would be an improvement for the vast majority of full time workers in this country.

A better option would seem to be the Fair Tax ( 23% national sales tax on most products (medicines and some basic food stuffs are exempted) that replaces the Income Tax, the Corporate Sales tax that we the citizens pay, not Corporate entities, all FICA taxes, the Capital Gains and Dividend taxes.

JMK said...

CORRECTION: "Income is the least effective wealth generator, which is why there is so little overlap between the top 1% of income earners and the richest 1% of Americans."

Joe said...

JMK: I know you believe the Fair Tax is the way to go, and you are not alone.

In my own life, there are hundreds of things I would love to have that would be out of my ability to purchase if a 20%-23% point of purchase tax were added to it.

I have read and many other explanations of the Fair Tax and I do not support the concept (although it might be better than our current system); it is patently UNfair.

JMK said...

"In my own life, there are hundreds of things I would love to have that would be out of my ability to purchase if a 20%-23% point of purchase tax were added to it." (Joe)

Not if you kept ALL your earned income and Corporations didn't have to pass on the Corporate income they must do with ALL the various "costs of doing business."

Taxing income is punishing productivity and that disncentivizes work, the higher those rates rise.

Arthur laffer is right that there are two income tax rates that deliver ZERO in revenues - they are a 0% rate and a 100% rate.

What has been shown to be true is that higher income tax rates incentivize saving/deferring more of one's earnings in various tax-deferred instruments and those with the most "disposable income" (ie. the top 10% of earners, who now pay over 70% of all income taxes) are most able to defer their income...resulting in LOWER tax revenues. Likewise, lower income tax rates encourage earners to take more of their income upfront, or non-deferred and tax revenues rise when tax rates are low.

That happened in the wake of the last administration's tax cuts, "The government took in nearly 13 percent more tax revenue in the first 9 months of this fiscal year [2006] than in the same period of 2005, according to the latest estimates in a separate report from the Congressional Budget Office.

"That jump in tax revenue is the second highest in the past 25 years. Corporate income tax receipts rose 26 percent, while individual income tax receipts climbed 14 percent, with the strongest growth coming from so-called non-withheld taxes such as bonuses in the form of stock grants, capital gains on investments and estimated taxes."
Still, whether rates on income taxes are high or low, they still burden productivity, instead of focusing on consumption, which is easier to control.