Proud To Be A Delegate -

Sunday, November 26, 2006

The Rich are the Golden Geese that Lay Golden Eggs for the Rest of America

Most everyone has seen charts of who pays federal taxes. This chart looks the same at the state and county/city level. Due to progressive taxation, in 2003, the top 1% paid over 34% of the nation's federal income tax, while the wealthiest 10% bore 66% of the total tax load. The trend continues down the income scale to where 25% of income earners paid 84% of the income taxes, and the upper half accounted for virtually the entire revenue (nearly 97 percent). Reference 1. That way the bottom 50% would pay nothing. But I forgot EITC. Some people actually get someone else’s money back. Another accounting shell game. Everyone who pays taxes thinks he is carrying his share of the load. Some even think they are productive citizens. Another government sham.

I used to think most of us were net producers until one little 'ol housewife in Manassas Va. woke me up with a 2 X 4. Remember when Disney wanted to put a theme park along 55 in Prince Willliams county. Disney showed how many jobs it would create. Everyone was buying it when this 1 lady stood up and devastated everyone with the truth. The jobs created would be low paying jobs. In our socialist society, she pointed out that through government services these new workers would actually cost the county taxpayers far more than the piddlly amount of tax they paid. When I look back, I now realize I was a net taker for a while. Now that I am older I am a net producer.

This gets us to the concept of net producers and net takers. When you are young and your kids are in school all but the rich are net takers. In addition to other services you receive for your property tax and sales tax you receive each year a whopping 5000 - 9000 dollars per child, depending on the state, for 13 years of primary education. 51% of a typical county's budget goes to schools, the state adds 11% and the feds add a measly 7%. A typical middle class family of 4 in the least productive part of their life cycle pays 5,000 in property taxes, house and cars, and another 2,500 in sales tax. They get back in county services 10,000 a year for school and another 3,000 in police, fire and other services. How can this be? The county would go bankrupt. Nope. When this family gets older their kids graduate and they are in the most productive part of their lives. So they pay more and get back far less. They carry the young. The county survives. Over a lifetime a family with a decent salary is a net producer even though it was a taker for 13 years.

Of course you have to have a salary large enough to become a net producer. Those with less are lifetime takers. With a few hours of research one could fix a break-even salary number by county. I won't. What becomes obvious though is that all the poor and most of the so-called middle class are net lifetime takers. So who carries the county? The Rich. The Rich are paying far more in taxes than they receive in benefits. What happens when the rich move? You get the rust belt, and in cities, slums.

My point is that the most important group of people in a county, state or nation is the rich, especially the very rich. You want to have a prosperous county, state or nation? Do everything you can to attract and retain the Rich. Forget the poor and middle class. They contribute a net minus to the welfare of the county, state and nation. I have not factored in crime; the poor commit 90% of crime. Or the cost of incarceration, 90% are poor. It is only the Rich that are providing the money to make a county prosperous or poor. They are the geese that lay the golden eggs. Do everything you can to keep these geese happy.

It would make sense that politicians would do everything to praise the rich and acknowledge their invaluable contribution to society. But they don't. Many politicians keep their jobs by pandering to the takers for votes. They take money from the Rich and give it to the poor and lower middle class to buy votes. Do the politicians thank and praise the rich? No. They disparage them; call them greedy. Call their wealth ill gained. They got wealthy at the expense of the poor. The Rich don't care about the poor. They only think of themselves. Given a chance these socialist Democrats aka Liberals like Charles Rangel would kill the geese for a quick grab of golden eggs. Forget the future. The fools. These socialists actually believe in the zero sum theory. That is, there is only so much wealth in the world. If the rich have more, the poor have less. It is all the Rich’s fault. The poor of the world vilify the US for taking all the worlds resources, leaving nothing for the poor. These socialists are also hypocrites. All congressmen and senators that stay a while become rich. So why pick on the rich? Votes.

So who are the Rich? There are a thousand definitions. We could quibble over what is a rich person’s income? A million a year. Everyone would agree with that. But I will be more conservative to make a point. I’ll talk about the top 10% who pay 66% of the taxes. 66% of 2 trillion is 1.3 trillion per year. Reference 2. But taxes are not the true indicator of the Rich. Some rich don’t pay any tax. A better measure is wealth. Reference 1. 10% of all people own 71% of all wealth. All US wealth is 13.8 trillion. Therefore the top 10% own 9.7 trillion dollars. Lets narrow that down a bit using reference 1, 46,000 people own 2.7 trillion dollars not counting primary residences.

What do they do with that money? First some facts. We have all heard the stories of how small businesses account for 90%all businesses in the US. Do they hire large wage earners? No. Lets be generous and say 10%. So who hires the net producers in the country? The ones who are the net producers and who carry on their backs the rest of the people in the US. The Rich, through stock, real estate, bonds and wholly owned businesses, again Reference 1.

What can we conclude? The Rich pay the country’s taxes and hire 90% of the productive workers (net producers). They also give most of the charity in the US. The Rich truly are the Golden Geese. A smart society would be doing everything they could to keep the rich motivated to remain American citizens. Where they have control, like immigration a society like the US can attract the most productive people in the world to the best society in the world. We do bring in professionals who are immediate net producers. India has a superior education system, but not superior paying jobs. We can go get them and others like them all over the world. Is that what we do? Nope. We bring in refugees, the poor and allow very poor illegals to pour across our borders. All are net takers. Why would our politicians deliberately choose takers over producers? Votes.

Are the Rich chained to living in the US? Yes and no. The rich want to live with the rich who speak English and have the same values they have, America. So lets say it would take a lot to force the Rich out. Why? Where else would they go?

Are we secure? Not hardly. We are entering the era of globalization. Mobile people yes, but more importantly mobile businesses and mobile capital. It is already happening. Emerging countries like India are producing highly educated professionals that speak English. More and more smart countries will be competing for the capital and the businesses of the American Rich. Fortunately, we have a little time. The Europeans have a lot of Rich. Old money. And they are far more socialist and abuse their rich worse than we do, they will be raided first.

The socialist liberals are all Democrats and they expert at giving your money to the poor in return for votes. Charlie Rangel can’t wait to raise taxes on the rich and half the rich are Democrats. Go figure. For the first time in our country’s history, the socialist liberals will be in charge of making the laws including the tax code. In the past it was always the moderate Democrats. How long will it be before they kill our Golden Geese and destroy our country? But surely the Republicans will keep them in check. Look at the past 6 years. These Republicans are gutless. They didn’t even make the Democrats actually filibuster. When the Dems threatened filibuster the Republicans caved.

Liberty or Death

Reference 1. Wikipedia the Number of wealthy

Distribution of wealth in the 21st century
At the end of the twentieth century, wealth is concentrated among the G8 and Western industrialized nations, along with several Asian nations. In the United States at the end of 2001, 10% of the population owned 71% of the wealth, and the top 1% controlled 38%. On the other hand, the bottom 40% owned less than 1% of the total wealth.
Due to progressive taxation, in 2003, the top 1% paid over 34% of the nation's federal income tax, while the wealthiest 10% bore 66% of the total tax load. The trend continues down the income scale to where 25% of income earners paid 84% of the income taxes, and the upper half accounted for virtually the entire revenue (nearly 97 percent).
Despite this, the distribution has been changing quite rapidly in the direction of greater concentration of wealth.[3]

I apologize for blogspot being unable to handle large spreadsheets.

Personal Wealth 2001:
Top Wealth Holders with Gross Assets of
$675,000 or More,
Type of Property by Size of Net Worth
[All figures are estimates based on samples--
numbers are in thousands, money amounts are in millions of dollars.]

State and local
Net worth Other real estate Closely held stock Publicly traded stock government bonds Farm assets Limited partnerships

Number Amount Number Amount Number Amount Number Amount Number Amount Number Amount Number Amount
(5) (6) (9) (10) (11) (12) (13) (14) (15) (16) (37) (38) (39) (40)

Total 7,357 13,833,590 3,453 1,483,808 1,179 1,228,657 5,475 3,492,512 2,073 877,867 726 356,921 747 408,577
Size of net worth:
Negative net worth [1] 32 -24,318 15 4,116 8 2,209 16 8,058 1 155 4 1,964 1 7
$1 under $600,000 1,509 680,767 621 140,049 182 29,826 900 68,119 99 4,623 86 25,522 56 2,428
$600,000 under $1,000,000 2,307 1,901,385 970 221,197 217 49,671 1,700 333,887 586 65,654 211 65,491 148 10,696
$1,000,000 under $2,500,000 2,569 3,837,583 1,267 451,974 448 203,715 2,042 814,725 925 191,683 304 128,713 300 43,421
$2,500,000 under $5,000,000 574 1,960,937 339 259,276 166 165,506 486 487,587 257 133,125 69 45,387 117 38,668
$5,000,000 under $10,000,000 243 1,666,947 150 175,206 93 173,792 216 450,143 133 165,256 33 34,624 66 55,530
$10,000,000 under $20,000,000 77 1,053,973 56 96,322 39 154,327 71 300,377 46 99,247 10 15,628 32 40,503
$20,000,000 or more 46 2,756,315 34 135,669 27 449,612 43 1,029,616 27 218,124 9 39,592 26 217,325

[1] Includes individuals with zero net worth.
[2] Mutual funds with a single investment objective are grouped with
similar direct investments in this table.

Reference 2. Table 1 -- Internal Revenue Collections and Refunds, by Type of Tax, Fiscal Years 2004 and 2005

Net collections

I'm a Reaganomics fan, if the "rich" do well, then they can afford to buy luxury items that employ - the production of which employees "not-rich" people, and the "rich" people can afford to hire lots of "not-rich people."

Me, I just like being employed.

I used to be employed by a money hungry millionaire capitalist. If it were not for him I would have a much lower paying job.
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