I hate the way President Obama (and other democratic presidents of the past) single out millionaires, especially when he says that the rich need to “pay their fair share, just like everybody else“. Now as a financial blogger, I know that the statistics shows that over 40% of the population don’t pay taxes as is. So perhaps President Obama want the rich to pay all the taxes?
But let’s peal back the layers on President Obama’s millionaire onion, shall we?
- From the monumental book called “The Millionaire Next Door“, we all learned that 80% of those that are rich did not become so because of inheritance. So that means that the majority of those that are rich come from the good old middle class group. Both Bill Gates and Warren Buffett are prime examples! Both were from what I would consider the Upper Middle Class, but definitely still part of the middle class.
- Those that succeeded in becoming millionaires (the road is full of those that have tried and failed), still sacrificed both time and experiences to get where they are today. The millionaires that I know of put in the typical 70 to 80 hours a week working on their business, for years and years! Forgoing all the fun stuff that the rest of us middle class folks enjoy. And now that they are older and even have less opportunities to enjoy life like only the young can do, we are going to suck their hard earned, long hour worked, money from them? Like a parasite or a leech? It just doesn’t seem very fair does it.
- These same millionaires enable the middle class folk like you and I to earn a living and raise our families. We (the middle class) do so while going on nice vacations and enjoying life in ways that the majority of the rest of the world can only dream of. The millionaires are the sharp end of the stick and without them, we are just beating again the wall going nowhere instead of breaking through it.
- They buy our city fireworks, give money to charity, help with special project (like stadiums), and benefit their communities in other ways, and the country in general. The millionaires are movers and shakers, they are catalyst that make the world a much better place.
- Being a millionaire, or blazing the trail to be a future millionaire isn’t a thing that should be frowned upon! We should all be encouraged to become millionaires.
- Millionaires create corporations which in turn pay taxes. So already the business pays taxes, then the businesses pay out the wages to it’s millionaire owners/creators who also pay taxes on the money that has already been taxes at the corporate level (this is called double taxation).
In conclusion, I think it’s wrong to attack the doers of society! Those that stuck their necks out, took the risk and were luck enough to succeed. Such millionaires hired the middle classes along the way, dragging the middle class into a more prosperous state while growing their business (many of which pay taxes in addition to the millionaire).
The long hours that millionaires work means that they miss out on a lot of family activities. This means that they miss soccer games and other activities that their kids may do because of the hours they put into their business. This may be the ultimate sacrifice made by entrepreneurs trying to become rich…
In conclusion, I think politicians and naive protesters tend to just look only at the checkbook balance of millionaires and they don’t take into consideration the sacrifices and hard work that those millionaires had to pay to get rich.
What is your opinion?
MR
P.S. If you are wealth please email me your story. Not only would I love to read about your experiences, I would also like to know about the positive ways you impact your community and benefit society as a whole. If your story is noteworthy, I’ll post it on my site. Of course, I’ll keep it anonymous…
You are on to something. You have to consider that these doers are the same ones who essentially built the society that we have. If not for them, we would be living in the middle ages. Steve Jobs was a millionaire for good reason. He developed something that millions of people enjoy and pay money for.
I think so too. If it wasn’t for the wealthy that spend on luxury items, we wouldn’t have half of the conveniences that we have today. We all know that things start out expensive because of R & D, then gets cheaper as the rich buy the products.
This has driven me crazy for a long time MR, and I vented about it a few times myself. I do not understand why the productive people of the world should be disliked and deemed selfish. I am not a millionaire, but my family is definitely not a drain on society and I don’t remember anyone helping me pay off my student loans when I exhausted myself getting through college and I didn’t expect anyone to. In other words, I went through plenty of poor years, and now I need to keep giving my money away now that my head is above water??
I could write about this forever.
Sadly, I think we are crossing the threshold where work ethic and risk is giving way to entitlement and jealousy.
I’m not rich either, but the people I know that are rich busted their butts to get there. They weren’t handed it like some people believe.
Oddly enough, I think we slightly disagree. I agree that it is too simplistic to label millionaires as the problem why we are struggling and to put the hopes of financial stability on the wealthy. However, I am hesitant to move all the way to say that everyone should be able to pull themselves up by their bootstraps (or whatever that analogy is). But, I’m not sure if you are saying that… so, maybe we agree after all. I do think that the mentality needs to switch. I actually have an “Obama post” in the queue, so be ready. I think in a week or two.
Life experiences are a strange thing. When I was younger I hated the rich and believe the media (and politician’s representation of them). But after talking and seeing people go from poor (or middle class) to rich, I changed my tune. Not to mention learning of the things the rich has done from my community anonymously or close to it.
I guess it comes down to having seen it with my own eyes… The media never states the good that the rich do because that doesn’t sell stories… But remember practically all the politicians, Jon Stewart, and the media execs are all very rich… 😉
Interesting post. I think there are two kinds of millionaires- those that have worked hard for what they have, appreciate it and try to do well with it, and those who just inherited money and take it forgranted. I respect those who work hard and try to make a positive contribution to society. Those that take things forgranted and bad role models in my opinion.
In the book “The millionaire next door”, I think the authors state that around 80% of millionaire didn’t inherit it.
I think those that do inherit it, if they are not careful, they’ll lose it by spending it foolishly…
In the end millionaires are just people like the rest of us, both good and bad, but no different really…
I just hate to see the bridge to becoming a millionaire be knocked down so the rest of us that bust our butts can’t make it to the other side. The government can do this if they are not careful…
These are some fantastic points. Unfortunately, it’s these glaring facts that get swept under the carpet by major media. Personally, I hate having to defend myself for luxuries that I bust my back to receive. I’m certainly not a millionaire (yet) by any means. I shouldn’t have to feel bad when I buy something extravagant.
I think if everybody had economics, and in particular the info about Supply and Demand, they would understand the value the the rich provide.
Sometimes, I forget that not everybody has had that class in college or in their schooling…
I think millionaires shouldn’t be punished for success, as they often provide the jobs that help everyone. Also, entitlement is not a good thing in general – if put into practice, it can inhibit motivation to innovate.
Having said that, I balance those thoughts with compassion for less fortunate, and the reality that some simply can’t pull themselves up on their own. By this, I mean those that are truly in need, not just lazy or feeling entitled.
Really, for me, I fall in the middle somewhere – but lean toward making sure that incentives for success aren’t removed, and that people shouldn’t be punished for sucess. After all, if people do all the right things by discerning wants from needs, delaying gratification, etc – why should their hard work be taken away and redistributed to those who feel entitled and aren’t truly in need?
There’s something to be said for envy. Often, people get so upset that they haven’t made sacrifices or made the right moves, that they just irrationally get angry at those who succeed. It’s probably human nature, but some of us are more rational than others.
I definitely have compassion for those in need, don’t bet me wrong… But the funny thing is that the wealth gives a ton of money way to charity. Look at both Gates and Buffett for prime examples.
My beef is with the media and those that don’t understand what they are protesting fully. To protest just because they can look back someday and say they protested seems silly. Especially considering our country is one of the best to live in. Go figure…
Although I do not think of myself as wealthy, I did achieve financial freedom when I was 38 years old. Don’t be concerned about wealthy people and taxes. They have access of the brightest and best tax professionals to lower their taxes. I know because I did. Most of what I achieved was taxed at capital gains rates anyway. I think the government is better off closing some of the loopholes.
Yeah but you are already there, someone like me that’s trying to still climb to that plain is going to get the short end of the stick… I view the changes not as things that will affect the wealth, I view the changes as things that will make those trying to become rich have a more difficult time of it.
I’m going to disagree with you, especially because of this: “In conclusion, I think it’s wrong to attack the doers of society! Those that stuck their necks out, took the risk and were luck enough to succeed. ”
There are plenty of people who stick their neck out, take risks and, aren’t lucky enough to succeed (at least not at first). And there are plenty of low and middle-income folks who work hard and long hours. In fact, it seems like the more money I make, the less difficult it is.
I’d like to see a flat tax. It’d make things a whole lot less complicated, and there’d be none of these arguments about trying to figure out what’s “fair”. And I’m happy every time I go up a tax bracket, and don’t mind paying increased taxes on the increased portion of my income at all.
That’s interesting, because I see you with your online endeavors becoming one of those that are going to be rich someday.
I too would love to see a flat tax (and so would those that are rich). It’s the media and the far left liberals that poo pah the flat tax, not the rich…
What really irks me are the signs that the protesters have: “A Job is A Right” and “Capitalism doesn’t work”. Of course capitalism work, that’s why both Russia and China are emulating it now and doing great, while N. Korea and Cuba are having a hard time just feeding their population…
Oh, I fully intend to be one of the rich, barring unforeseen events!
@ Jackie,
I have to disagree with your statement of “I’d like to see a flat tax. It’d make things a whole lot less complicated, and there’d be none of these arguments about trying to figure out what’s fair”.
Flat taxes are a tax on the poor. Say everything was taxed at 20% or 25%. A poor person making 20k a year will be severely impacted by this. Why because the price of goods/services remain the same yet they lose a quarter of every dollar. A progressive tax system works best because it allows those who can afford to pay more actually contribute more into the system. A person making 20k a year with the current prices of goods and services has it a whole lot harder than someone making 200k a year. It’s not about being fair. It’s about being fair, balanced and doing what’s smart for the economy and your country.
Hi YFS,
Actually I believe most flat tax advocates don’t tax those families making less than the poverty levels. So even though it’s a flat tax, it’s really a 2 step progressive tax…
Even the most stalwart of those usually have some kind of small loophole for the poor.
Besides, the poor still pay sales tax, so I think that’s quite enough for them.
I could be wrong, but my thinking is that if a flat tax were implemented, it wouldn’t have to be anywhere near 20%, since everyone would be paying it.
I find it ironic that the protesters on Wall Street are criticizing our capitalistic system, but in reality the stock market is just investors in individual corporations trying to maximize their investments by taking a risk. The best creator of legitimate jobs(non government)would be a healthy, financial system and a bull market where private companies are free to expand and spread wealth by creating productive jobs.
I just don’t understand their reasoning. The rich (with the top 5 percent pay well over half the income taxes.)…
So if the top 5% pay over 50% of the taxes already, then what do they mean the rich aren’t paying their fair share? Sounds like a bad math problem to me 🙂
I think Obama is actually referring to those really high earners, not those who have worked hard and invested. If you are making over a few hundred thousand, I think you can afford to pay a few more bucks in taxes.
I heard people were protesting at Jaime Dimon’s house. Probably one of the only companies that didn’t even need a bailout…
To protest at someone’s house just because you can doesn’t seem right to me. I think it’s a recipe for disaster for the US. I just think that people and the government don’t realize it (and probably after the damage is done they won’t realize it then either…) Pretty soon, if you setup a system that attacks the smartest, wealthiest and the ones most able to change the economy, eventually they will start to feel singled out and retaliate.
I think when you single a group out and treat them differently because of a characteristic, that is called discrimination.
There is so much arrogance in assuming that the 50% who are paying over 90% of the teaxes are not paying their fair share. Framing the argument in that way is a non-starter. This class warfare dialogue is so exhausing! Like Kris, this has annoyed me for some time.
That’s my entire problem with this protest thing. I use to think that the average American was well educated and smarter than the people in the media give them credit for, but now I’m not so sure.
But then again, perhaps they do and we’re really only seeing a small faction of the public, with the majority understanding basic math and what is really going on around this matter…
But then the corporations that these millionaires build, create bogus investments and ponzi schemes as well, that has the potential to bring down the country’s economy.
And when these companies collapse, the millionaires just move on to their next adventure. But the people who suffer are the employees who get laid off.
Have you ever heard of companies going down the drain because of their tax burden ?
I guess people are protesting for accountability.
Yeah, but isn’t Madoff in prison? I remember reading that some executive even commited suicide over these matters. I don’t think you realize the pain that the endure.
Look at yourself first, then look at them. Believe it or not, they are just like you… This think similarly, eat, dress, do bodily function the same way. The only difference is that they take risk, but you do that too!
I’ve never heard of a CEO crashing a corporation and then becoming the CEO of another decent sized corporation (at least of any size).
epic post my friend. those who have not traveled the path will not even begin to relate to what it takes and what it entails. sad part are these are the very same individuals who i believe are narrow minded and maintain a one track focus and thus do not get ahead in life themselves. the bitterness is contagious . . . and when politicians do it, i feel they do it 1) to gain support of the masses and 2) because they are helpless and have no better alternative to fund their wasted spending
I especially agree about the politicians and their thinly veiled but still hidden agendas. They are playing the people, while getting or already rich themselves. Sometimes I think they think we are pawns in a grand game like chess…
I think that a lot of folks didn’t have economic classes like I had so they just don’t know any better. If they had, I think they would have different opinions about the matter.
I think the protesters are probably just a small number and once they think about it, they’ll realize that if what they wanted came true, it would destroying jobs by destroying American corporations… At least I hope they (again a very small percentage) figure it out.
I think it’s dangerous to generalize about one class when you have no clue what it is to walk in their shoes.
I am lucky enough to know what it’s like to be very poor and now as an upper middle class family. Speaking from personal experience, I do way more for others now that I have money than I could have ever done living at poverty level.
I don’t mind paying more taxes than someone at poverty level, but I do mind being treated like my journey to dig out of poverty and be successful is somehow part of the problem and not part of the solution. Would it somehow have been better if I stayed poor and lived off of government assistance instead?