Tag Archives: Taxes

“When poorer people get more income, they spend it, which helps the overall economy”

America likes the idea of the self-made man, the man who starts his own business, pulls himself out of obscurity, and becomes a success.

Over time, some Americans have started to believe that a self-made man should also be a selfish man. That a millionaire shouldn’t pay taxes because they’ll only be “squandered,” that a smart businessman roots for the economy to collapse so he can buy real estate cheaply, that taxes on business should be lowered so the wealthy can do better. In much of America, that attitude is regarded as an important component of how a self-made man succeeds—applauded, because it’s thought to be a sign of the vigor of America.

Or woman.

But plenty of millionaires feel differently. Some contest the notion of a self-made man altogether, arguing that anyone successful has relied on government spending—infrastructure, an educated workforce, enforceable contracts—to make their mark. Some of them even believe that paying more taxes and investing in public services is the way to more prosperity—for everyone. “What I’m talking about is what policies will not just help me personally, but that I think will be good for our country and my kids’ generation,” Morris Pearl, a former managing director at the investment fund BlackRock, told me. He added, “I don’t want to live in a country where a few people do amazingly well and everyone else does poorly, because anyone, including me and my kids, may end up not being one of the winners.”

Source: The Millionaires Who Disagree With Trump on Taxes – The Atlantic

“Far from trickling down, income and wealth are instead being sucked upwards at an alarming rate”

Pretty interesting new study released from Oxfam, as reported by The Atlantic, worth sharing in (nearly) its entirety below (emphasis mine):

 

There are several reasons for this growing problem according to Deborah Hardoon, Sophia Ayele, and Ricardo Fuentes-Nieva, the study’s authors. The first is the disconnect between work and earnings. The share of national income going to workers has been falling while the share of income given to owners and top executives is rising, a phenomenon that can be seen in the stagnant wage figures of workers around the world despite growing corporate profits and productivity.

Persistent patterns of wage inequality, especially among the poorest workers, can seriously damage global efforts to eradicate poverty.

Taxes also play a pretty big role in the discrepancies, according to the report. Wealthy clients can hire financial advisors, accountants, and other pricey professionals to help them navigate the tax system, using loopholes to sock their money away in tax havens. Such efforts have helped keep nearly $8 trillion of money untaxed in offshore accounts, the study finds. Taxing that money isn’t just a matter of fairness, the report argues: The lost public revenues means less money for government programs that aid the poorest and neediest, allowing gaps in education, health care, and quality of life to persist and even grow. 

To build an economy that distributes its wealth more evenly, the researchers suggest creating a stronger system of taxation that prevents trillions of dollars from being pulled out of circulation via offshore accounts and allows companies to reduce their tax liabilities via loopholes. The report also suggests that politics needs to change, diminishing the power that companies exercise through tools like lobbying and patents, which can decrease competition and raise prices. 

It’s in everyone’s interest to fix the problem of economic inequality, even those who are thriving amid the increasing inequality. The study notes that prolonged periods of a widening wealth gap are bad for entire countries, as they can stunt overall economic growth. In a still-fragile global economy, that threat’s a problem for everyone, not just those suffering at the bottom.

Source: Oxfam Report Finds 62 Wealthiest People Have as Much Money as Half the World – The Atlantic