I'm tired of liberal wealth-bashing.
Tax breaks only benefit the wealthy." "Corporations pay no taxes." "The inheritance tax only applies to the richest 2% of the people." And so on, ad nauseum. The official position of the Democratic-Socialist-Marxist Party is that wealth is a bad thing. (Of course, many liberals are very, very wealthy, but we'll leave the discussion of liberal hypocrisy for another day.) They want to tax the wealthy into poverty because those evil wealth-mongers have taken their ill-gotten plunder and are hoarding it like Smaug the Dragon in a mountain cavern, or like a Pharaoh filling his tomb for the voyage to the afterlife.
Now, you and I know that such treasure troves are the stuff of myth and history. Every rich person probably has "a stash," but all of us should have a stash – savings accounts and IRAs and such. Most rich people use their wealth in a variety of ways. In fact, for some wealthy people, managing their finances is a full-time job, and charity is a key part of their management plan.
Charity, in the broadest sense of the word, could be defined as any action designed to improve the quality of life. That means the individual life, the community life, the whole world. Allow me to suggest a few example of how those "evil" rich people make the world a better place:
Tax breaks only benefit the wealthy." "Corporations pay no taxes." "The inheritance tax only applies to the richest 2% of the people." And so on, ad nauseum. The official position of the Democratic-Socialist-Marxist Party is that wealth is a bad thing. (Of course, many liberals are very, very wealthy, but we'll leave the discussion of liberal hypocrisy for another day.) They want to tax the wealthy into poverty because those evil wealth-mongers have taken their ill-gotten plunder and are hoarding it like Smaug the Dragon in a mountain cavern, or like a Pharaoh filling his tomb for the voyage to the afterlife.
Now, you and I know that such treasure troves are the stuff of myth and history. Every rich person probably has "a stash," but all of us should have a stash – savings accounts and IRAs and such. Most rich people use their wealth in a variety of ways. In fact, for some wealthy people, managing their finances is a full-time job, and charity is a key part of their management plan.
Charity, in the broadest sense of the word, could be defined as any action designed to improve the quality of life. That means the individual life, the community life, the whole world. Allow me to suggest a few example of how those "evil" rich people make the world a better place:
Charitable giving continues – in spite of the economy.
"Despite the recession, wealthy Americans still gave to charitable causes last year," says a study by the Center on Philanthropy at Indiana University. Actual donations fell sharply, from about $83,000 in 2007 to $54,000 in 2009 (inflation adjusted), but stayed steady at around 9% of total income. "Wealthy philanthropists appeared to adjust their priorities in response to the recession. The portion who gave to basic human needs rose from 75 percent in 2007 to 85 percent in 2009."
“What we have often stressed is that high-net-worth donors have remained committed to giving,” said Una Osili, the Center's director of research. In fact, "Study results show 98 percent of high net-worth households donated to charity in 2009 – a figure consistent with findings from studies done before the economy soured."
The term wealthy, of course, depends on who is asked. For this study, the Center surveyed 800 households with annual incomes over $200,000 and/or a net worth of at least $1 million. "The average net worth of respondents was $10 million." [Scott Olson, "Rich Still Giving to Charity, but in Smaller Amounts," Indianapolis Business Journal, 19 November 2010.]
A quick calculation: If just 800 households averaging $200,000 income are giving about 9% to charity, that's $14,400,000 per year to worthy causes. (By the way, Huffington Post says there were about 7.8 million millionaires in the USA in 2008. Much as I dislike HuffPo, this number I think we can trust. Many sources suggest that most of these aren't inheritors, they are new rich who earned their wealth.)
Giving every day, at work.
Charities may get the lion's share of good press, but there are other opportunities for giving, perhaps more effective than charities, according to one analyst.
The term wealthy, of course, depends on who is asked. For this study, the Center surveyed 800 households with annual incomes over $200,000 and/or a net worth of at least $1 million. "The average net worth of respondents was $10 million." [Scott Olson, "Rich Still Giving to Charity, but in Smaller Amounts," Indianapolis Business Journal, 19 November 2010.]
A quick calculation: If just 800 households averaging $200,000 income are giving about 9% to charity, that's $14,400,000 per year to worthy causes. (By the way, Huffington Post says there were about 7.8 million millionaires in the USA in 2008. Much as I dislike HuffPo, this number I think we can trust. Many sources suggest that most of these aren't inheritors, they are new rich who earned their wealth.)
Giving every day, at work.
Charities may get the lion's share of good press, but there are other opportunities for giving, perhaps more effective than charities, according to one analyst.
"Bill Gates and Warren Buffett announced this month that 40 of America's richest people have agreed to sign a 'Giving Pledge' to donate at least half of their wealth to charity. With a collective net worth said to total $230 billion, that promise translates to at least $115 billion." Impressive, or is it?
Kimberly Dennis, CEO of the Searle Freedom Trust, wrote a fascinating editorial in the Wall Street Journal, explaining some flaws in the great master plan of these great American entrepreneurs:
It's an impressive number. Yet some – including Messrs. Gates and Buffett – say it isn't enough. Perhaps it's actually too much: the wealthy may help humanity more as businessmen and women than as philanthropists.
What are the chances, after all, that the two forces behind the Giving Pledge will contribute anywhere near as much to the betterment of society through their charity as they have through their business pursuits? In building Microsoft, Bill Gates changed the way the world creates and shares knowledge [including how this blog post was written!]. Warren Buffett's investments have birthed and grown innumerable profitable enterprises, making capital markets work more efficiently and enriching many in the process . . .
Successful entrepreneurs-turned-philanthropists typically say they feel a responsibility to "give back" to society. But "giving back" implies they have taken something. What, exactly, have they taken? Yes, they have amassed great sums of wealth. But that wealth is the reward they have earned for investing their time and talent in creating products and services that others value. They haven't taken from society, but rather enriched us in ways that were previously unimaginable. [Kimberly Dennis, "Gates and Buffett Take the Pledge," Wall Street Journal, 20 August 2010, emphasis added.]
Without people like Bill Hewlett, David Packard and other hardware pioneers, without Leonard Kleinrock, Douglas Engelbart and the other parents of data networking, without Pyra Labs (the company that created blogsot.com) and thousands of others – many of whom became very, very wealthy for their efforts – this blog post would be nothing more than a clever idea trapped between my ears. Without these and their software-developing counterparts, Baron Phoenix Media, my one-man writing & desktop publishing shop, would not – indeed, could not – exist!
How many lives have been saved by cell phones? How many crimes have been solved by DNA testing? How many jobs exist in industries which were the stuff of Star Trek a generation ago; of Buck Rogers two generations ago; of Jules Verne three generations ago?
Rich people spend more money than you and I.
How many lives have been saved by cell phones? How many crimes have been solved by DNA testing? How many jobs exist in industries which were the stuff of Star Trek a generation ago; of Buck Rogers two generations ago; of Jules Verne three generations ago?
Rich people spend more money than you and I.
I have the good fortune to count among my friends Hyrum Smith, one of the founders of Franklin-Covey. In building that business, and subsequently as a motivational speaker and trainer, he has traveled millions of miles. He once told me about his visit with a CEO who had asked him to come and speak to his employees. The CEO hosted Hyrum at his home, in the rich part of town, and gave Hyrum a tour of the house and grounds. If memory serves, the cost of construction, landscaping, décor, etc., was somewhere around $11,000,000, or so the CEO bragged to Hyrum.
According to InvestmentTools.com, the average home price in the USA is in the neighborhood of $250,000; let's call it a cool third-of-a-million with furnishings and other stuff. That means this CEO spent as much for his crib as you and I and 30 of our friends will spend on ours. Who got that money? The architects, real estate agents, carpenters, framers, carpet layers, plasterers, cabinet makers, landscapers, plumbers, masons, pavers and all the other white-collar professionals and blue-collar craftsmen who built the place! And, I'd make a bet that not one of those contractors gave the CEO a discount rate. This visit took place about 20 years ago, so, in that time, I'd also bet that the CEO has spent additional millions for maintenance and upgrades.
Rich people buy stuff because they can! They want it, they can afford it, they buy it. (Yes, it's just that simple, and, yes, you or I would do the same.) So what if the guy or gal has 6 cars and 2 boats. Think of the salesmen's and mechanics' paychecks they provide. Think of the gas they buy. So what if they invite a few dozen friends for a Super Bowl party or an Academy Awards gala? Think of the people they employ to cater those lavish parties. Literally billions of dollars are pumped into the American economy every single day by rich people who are purchasing stuff you and I can't afford, or buying more stuff than you and I can afford.
Years ago, I was part of the entertainment at a company party. I made just $50 for the 2-hour show; but I got a dinner I doubt I could touch at a restaurant for less than $50 and was given a $50 tip! The owner had a very successful year and wanted to share it with the people who made it possible, his employees. I was happy to help him.
And, while we're at it, think about the taxes they pay.
Yes, many people in this country pay more in taxes in one year than you or I will earn in a lifetime! Even if we ignore federal income taxes for the moment, and think only on the sales taxes, property taxes and other local taxes that fund our police and fire departments, parks and libraries and so much more, it is an impressive sum.
To every wealthy person in America:
I congratulate you for your success. I thank you for whatever part of your wealth Reaganomically trickled down to my little business. I thank you for all the money you spent buying from my friends and relatives. I thank you for the grants to my alma mater and the symphony and the soup kitchen and the historical society and the homeless shelter and the education foundation and all the other good causes in my community.
President Obama and the Democratic Party may hate and vilify you, but, in the immortal words of George M. Cohan, "My father thanks you, my mother thanks you, my sister thanks you and I thank you."
And I thank you for listening, tune in next week for another rant.
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