13 September 2006

24; Taxes, and the contribution to society of the wealthy

·                     Sep 13, 2006

24; Taxes, and the contribution to society of the wealthy

Both in terms of justifying a flat tax and repealing inheritance taxes, Republicans, Libertarians, and all so-called conservatives, constantly say that the wealthy earn thier money, and produce the most in society, as though that were a given.

Simple Example.
Bill Gates, wealthiest man in the country.
Xerox invents the mouse as a computer interface.
Apple invented the user friendly "windows" environment for the personal computer, while IBM is still using things like BASIC and DOS.
Gates makes minor changes, is excellent at marketing, and makes enough deals with manufacturers to build a virtual monopoly.
Many of Microsoft's products are actually inferior to the competition (FireFox vs. Internet Explorer, for example), but by bundling products together, his company is able to corner the market on software - a practice which leads to major lawsuits in both the US and Europe.

None-the-less, he becomes the undisputed leader of computing.

His R&D team does the research and development.
His employees do the actual work.
He collects the checks.

Now consider his children.
They are born into billions of dollars.
What incentive do they have to contribute anything to society?

The same goes for any wealthy person.

They pay people to do their production for them.
The R&D team does the innovations, the workers do the actual production, and the CEO and board members run the business.
The owner/stock holders contribute little more than capital.
Capital which the most likely inherited.

If the concern is people being taxed on their hard-earned money, than why did a major tax cut go to stock dividends?
Why not apply the tax cuts to EARNED income. As in, someone goes to a job, produces something useful to society, and gets paid for it.

The wealthiest 0.1% of society contributes very little to society, except for taxes.

In considering the numbers of how much they pay, consider also how much they get to keep.

If a man makes 10,000 dollars, working minimum wage full time, and pays 10%, he keeps $9,000

If a man makes 1,000,000 dollars, and pays 90%, collecting interest on stock and bond investments from his billion dollar inheritance, he keeps $100,000

He contributes nothing to society or GDP (if he didn't have that money to invest, someone else would. He hasn't done any actual labor), yet he ends up with 100 times as much.

If you want to defend the notion that people keep what they EARN, you have to support ending the practice of inheritance, and tax unearned income at a much higher rate than earned income.

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