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Really … in this day of the denunciation of capitalism, the castigation of the successful, and the disdain of the wealthy who would take on the defense of the “haves.”
First, let me establish credentials. I am the product of an immigrant family with a mother who grew up fatherless as he, the grandfather I never knew, died from his service to our country. I am also the product of a disabled military father. A battlefield (Korean War) injury led him to be evacuated to a MASH unit and later transferred to a military hospital in Osaka, Japan, and then on to the VA hospital in Chicago. Notwithstanding my mother’s hardship, she was a candy striper at the VA hospital where she met my eventual dad. I am the product of that union and experienced a very meager childhood with seven siblings. Adding in a grandmother and a couple of uncles and there you have it … a dozen living in a two-bedroom flat never depicted in Norman Rockwell’s imagery.
Due to my dad’s war injuries, he could not initially work thus, the early years of my life were in public housing. Actually, it was a great childhood as it built character and awareness of the good in people. It also gave me a sensitivity of how important the creation of jobs were to any community and, thus, the early imprinting that would define my career choice.
Having now established I am not one of those silver spooners … you know, not one of those guys born on third base that go through life thinking they hit the triple, so let me get to my point. In the political primaries, the universal and compelling sound bite is that the candidates vow to “make the wealthy pay their fair share.” The presumption, of course, is that they do not. I do believe that it’s okay for some to earn more, and to have more than others. Perhaps they invested more in education, are smarter, work harder or took more risks with their capital. Those incentives for financial gain must be present in any successful capitalistic society. Of course, as wealth continues to concentrate more and more, we must also preserve fairness. This has evolved my thinking to where I do believe the minimum wage must increase and I certainly understand the ripple effect of such. However, in a country such as ours, with our wealth and our many blessings, no one should work 40 hours per week doing anything and live below the poverty level — whether you are flipping a burger, making beds or digging a simple hole. You ought to be able to support at least a modest lifestyle without public subsidy.
The current tax structure now confiscates as much as 50 percent of our success and the narrative is now turning to a “tax the net worth” scenario. This is where people would be taxed annually on their net worth or in effect everything they own. If that rich guy has a pet tiger, let’s value the pet tiger and tax the value of the tiger. In a democracy where the majority prevails, there will be a groundswell of support for this additional taxation of those “haves.” As quoted by George Bernard Shaw, “A government that robs Peter to pay Paul can always depend on the support of Paul.” Ironic, is it not, that we are a nation that was founded to avoid excessive taxation.
The concept, of course, is that the government would then redistribute those tax dollars to those in need. This Robin Hood theory certainly makes an appealing headline. However, wait a minute … what do the wealthy do with their riches? Yes, there are consumption slobs that make it all about them … they are the ones that make the headlines. However, the majority of the wealthy use their money to directly create jobs in their businesses or indirectly create jobs by investing in the stock market or further indirectly create jobs by paying taxes that in turn fund infrastructure projects, national defense, and so much more.
On top of such, they are overwhelmingly charitable and this side of wealth doesn’t get near the press. Last year charitable giving in our nation was $410 billion! Of that, only 14 percent came from foundations and 5 percent from corporations. Note that 81 percent of that $410 billion came from individuals most of them wealthy. You know that 1 percent we are being conditioned to loathe. Have any of you enjoyed the Morton Arboretum outside of Chicago or Cantigny Park built on the Robert R. McCormick estate now enjoyed by the public. How about Carnegie Hall in New York or thousands, literally thousands more.
Charitable giving provides the less fortunate access to a better standard of living. For many, it paves the way to education. The research it has funded produced breakthroughs in medicine and science which has us enjoying one of the lowest infant mortality rates as well as an ever-expanding life expectancy. In addition, that expanded life is a quality of life as opposed to other cultures that simply warehouse their elderly. It preserves cultural artifacts for many to enjoy as their funding of arts and sciences is second to none. It also funds the assault on the ambitious and the not yet achieved goal to eradicate poverty worldwide.
Yes, successful people keep score, and money is the most popular metric but, once fortunes are amassed, the subsequent chapter of many of these lives involves giving it away to worthy causes. You have all heard of the Giving Pledge started by Bill Gates and Warren Buffet, who led by example and invited their wealthy friends to commit to giving away at least half of their net worth to philanthropic causes. The most recent 14 who affirmatively responded join the 154 billionaires who came before them. The Giving Pledge is expected to be worth $600 billion by 2022. The list of names joining is a who’s who of wealthy.
Who better to direct money appropriately, and effectively, and efficiently than the person who had the financial acumen and strategy to create the wealth in the first place, and subsequently couple those skills with the humanitarian desire to distribute such? Might it be them or the inefficiency of the government to redirect that wealth? A government who rarely gets credit for getting much right.
Let me see if I can put a bow on this diatribe. My real message here is one of the unintended consequences. When San Francisco passed the tax on businesses over $50 million in revenue to fund their sanctuary city status, I predicted that the result going forward would, OF COURSE, be fewer business startups and more homeless. Please refer to my Wholesaler article of June 2019 on this very subject. My prediction is ahead of schedule. Further as the homeless explodes and the deterioration of sanitary conditions prevail such will negatively affect tourism, a critical component of their economy. Those championing more taxes on those “more fortunate” need to think it through. Nice sound bite but not very practical. Perhaps they would be advised to recall some historic sage advice: “silence should never be broken unless one can improve upon such”.
“Charity isn’t about making a donation; it’s about making a difference.”