It was in the late 1960s. According to family lure, at a social gathering of the affluent, my brother’s father-in-law noted a man across the room and said “That fellow is worth $10 million.” He then pointed to another man and said “He’s worth $20 million.”
Mr. Kramer asked “Do you think the man worth $20 million is much happier than the man with $10 million?” He then answered his own question “Damn right he is!”
Although said partly in jest, it did convey the mindset of a class of financially ambitious Americans who set their life goals on becoming a rich as possible and passing along their wealth to their progeny.
Mr. Kramer owned and operated a small textile factory. That industry was among the first to be supplanted by inexpensive foreign labor. He died with modest income.
Much of the big money made over later decades did not come from manufacturers like him, but rather by Wall Street, initially through the acquisition and streamlining (or milking) of companies and later through the sales of questionable financial instruments, many of which brought down the economy in 2008 from which a recovery is not yet in sight.
According to The New York Times, the minimum income for the top 0.01% of families in the USA is $11,000,000 with the average amounting to $31,000,000. The 14,000 families enjoy a 5% share of the total U. S. Income.
In the late 1970s and during Ronald Reagan’s presidency, the top income tax bracket was slashed from 70% to 50% on annual incomes above $45,000.
The current top federal income tax rate is 35% and starts at earnings over $388,350.
We can understand why people making millions per year do not desire to have to pay higher taxes…although many have publicly expressed a willingness to do so.
But what we cannot understand is why so many people of modest or moderate means, a good portion of which are suffering during these economically adverse times, are so adamantly opposed to any increase in the top personal income tax bracket.
Not only would such a nudge towards historic levels serve the purpose of reducing fiscal deficits but it also would help promote a sense of democracy and societal comity.
To quote Business Insider “ …in 1945, with the country loaded to the gills with war debts, the top bracket hit an all-time high: 94%. This was assessed on anyone making more than $200,000. (Next time you hear bitching about how unfair it would be to raise our top bracket a few percentage points from 35%, remember that).”
“But what we cannot understand is why so many people of modest or moderate means, a good portion of which are suffering during these economically adverse times, are so adamantly opposed to any increase in the top personal income tax bracket.”
It’s the belief that if taxes were raised for the extremely wealthy, those business leaders would cut jobs, benefits, stop investing and make up their tax increases by penalizing job growth and adding more employees to the unemployment line. This is at least the rhetoric that I have heard (time and time again) being spouted off!
“Mr. Kramer asked “Do you think the man worth $20 million is much happier than the man with $10 million?” He then answered his own question ‘Damn right he is!’ ”
The surprising thing about money is that we all want more of it. However, speak to someone that has all the money in the world and they would classify money as a very small portion of what makes them happy. It takes money to make money. The idea is to build your personal empire and leave your legacy and it’s dividends to your progeny.
However, the real challenge would be devoting enough time to your progeny during your personal conquests to raise someone with a moral compass, an entrepreneurial spirit and an appreciation for simplicity.