George Hasara – Columnist
According to the National Endowment for Financial Education, about 70 percent of people who win the lottery or receive large monetary windfalls, end up broke within a few years. This statistic suggests that the average person isn’t exactly a financial whiz. Nevertheless, we live in an age in which there is no shortage of folks demonizing those who do know a thing or two about making money and holding on to it.
The “1%” has been replaced by the “billionaire” as the lead scapegoat for what ails the country. Perhaps this is because so many of the politicians and celebrities that rail against riches are actually part of that 1%. Raising the bar to billionaire status makes for a far less sympathetic target. It’s hard to identify with a person whose net worth is represented by a number followed by nine zeros. Amazon owner Jeff Bezos is currently the world’s wealthiest person at $137 billion, depending on the day’s stock prices and the outcome of his divorce settlement, of course.
The persistent trope is: What can a billionaire possibly do with all that money? These critics are stuck in a mindset that equates wealth only with consumption, which is probably a big reason that 70 percent of windfall recipients go belly up. I’m sure they had no problem finding ways to spend their fortunes. The fact that a company like Amazon has annual sales greater than the GDP of most nations, or that they employ over 600,000 workers is lost on those who think the only purpose of money is to spend it. And, in order for the masses to have more to spend, we need to progressively raise taxes on those who have the most. Currently, there are proposals for increased income and estate taxes in the 70 percent range for the nation’s wealthiest.
However, why only take most but not all? What’s wrong with confiscating all assets of all billionaires in the country? The numbers fluctuate, but the best I can tell, there are around 600 U.S. billionaires with a total of $2.5 trillion in combined assets. The household wealth for the rest of us is reported to be $100 trillion. According to my advanced math calculations, if we shake down the billionaires for every cent they have, we would get a whopping 2.5% (minus shipping and handling) collective bump in our net worth. The financial stimulus, however, would be a one-shot deal. The golden goose would be splayed wide open.
Many people believe in what is known as “zero-sum” economics, thinking that if one person prospers, then another person somewhere else has to become poorer. There’s an economic pie that keeps getting sliced and diced with slabs and slivers doled out to the populous. If one thinks in these terms, then it follows that they better get their hands on that magical pie server. Our political system is more than willing to trade promises of a more generous cut in exchange for your vote.
It’s a perverse concept of penalizing someone for acquiring “too much” wealth. Imagine a prolific inventor, such as a Tesla or Edison, being told that they could only hold X amount of patents and then after that, their inventions would be commandeered by the government for the good of society. After all, how many inventions can one person claim as their own?
Instead of squandering away their millions, as the average person receiving a windfall is prone to do, the billionaire has the audacity to parlay a fortune into an even bigger fortune. The wealthy are often characterized as either being lucky or larcenous. Traits such as hard work, innovation, discipline, willingness to take risks and perseverance are discounted. To think otherwise is to crack open the door to the idea that maybe, just maybe, people are entitled to the wealth that they create.
Contact George at firstname.lastname@example.org.