Who Pays America's Tax Burden, and Who Gets the Most Government Spending?

[vern_humphrey]

Vern
This is an unfair post, if you have not read or seen the PBS version of “Rich Dad, Poor Dad” I highly recommend it to everyone. He does the best job I have ever seen of explain why many people out work the rich yet live in average conditions

How is it unfair? What’s unfair about saying people with the same abilities should pay the same taxes?

With all respect to PBS, there are many other studies of wealth in America – I recommend “The Millionarie Next Door.”

While there are those with handicaps who cannot work, or who cannot work and plan to a level necessary to become rich, these people are in the minority. Our greatest difficulties in generating lots of people who can pay lots of taxes are:

1. The widespread belief that somehow it’s all due to “luck” and that work and planning are not enough.
2. The failure of our education system to teach economics.

 

[b_justb]

Vern
This is an unfair post, if you have not read or seen the PBS version of “Rich Dad, Poor Dad” I highly recommend it to everyone. He does the best job I have ever seen of explain why many people out work the rich yet live in average conditions

I think we need a tongue in cheek smiley.

 

[vern_humphrey]

I think we need a tongue in cheek smiley.

Well, how did Marx put it?

From each according to his ability, to each according to his need

So what’s wrong with taxing people according to their ability?

 

[Texas_Roofer]

How is it unfair? What’s unfair about saying people with the same abilities should pay the same taxes?

With all respect to PBS, there are many other studies of wealth in America – I recommend “The Millionarie Next Door.”

While there are those with handicaps who cannot work, or who cannot work and plan to a level necessary to become rich, these people are in the minority. Our greatest difficulties in generating lots of people who can pay lots of taxes are:

1. The widespread belief that somehow it’s all due to “luck” and that work and planning are not enough.
2. The failure of our education system to teach economics.

Just so you will know I read the book “The Millionaire Next Door.” it is consistent with the better mentioned reference. Both explain it is assets which produce wealth not ability. Both explain that asset accumulation is the key to wealth.

If you look at financial plans try this: compare a child who has $10,000 placed in a stock portfolio on the day of his birth to a child who works his way through school to become a professional and then places $5,000 a year in a stock portfolio for life. Which is wealthier - the first child is even if he never works a day in his life! That is a book example used to teach the affect of financial planning. The reason your post is unfair is because the baby can not control whether the parent has or installs the $10,000. This example or those books both show the impact of investing in assets.

If you go back to the original concept of the thread there is a high correlation between money invested in children and their adult wealth and income. So those whose parents did not invest end up in low income groups receiving government subsidies. Many of the same work very hard and many produce excellent returns on their investments however it is much harder to turn $1 provided to you in to a retirement than to turn $10,000 provided to you in to a retirement

 

[vern_humphrey]

Just so you will know I read the book “The Millionaire Next Door.” it is consistent with the better mentioned reference. Both explain it is assets which produce wealth not ability. Both explain that asset accumulation is the key to wealth.

Yes – asset accumulation is the key to wealth. Asset accumulation is accomplished by three keys:

1. Earning money.
2. Allocating some portion of earnings to investment.
3. Managing the investment.

Therefore it is the ability to earn, to save (that is, not consume all you earn), and to manage what you invest that leads to wealth and prosperity.

Ability generates assets and makes them grow.

If you look at financial plans try this: compare a child who has $10,000 placed in a stock portfolio on the day of his birth to a child who works his way through school to become a professional and then places $5,000 a year in a stock portfolio for life. Which is wealthier - the first child is even if he never works a day in his life! That is a book example used to teach the affect of financial planning. The reason your post is unfair is because the baby can not control whether the parent has or installs the $10,000. This example or those books both show the impact of investing in assets.

You’re painting a false picture here – giving the impression that most wealthy people had a stock portfolio created for them at birth. In point of fact, most wealthy people had no more leg up than you or I – they just worked harder, sacrificed more, and had the guts to invest and manage what they saved…

 

[Texas_Roofer]

…
.You’re painting a false picture here – giving the impression that most wealthy people had a stock portfolio created for them at birth. In point of fact, most wealthy people had no more leg up than you or I – they just worked harder, sacrificed more, and had the guts to invest and manage what they saved…

I do not think so, I wish this was correct however what data I have seen suggests the opposite. If you know of some data which supports the concept that high income and high wealth people are actually a cross section of normal schools, parental wealth etc, I would love to see it.

One issue here is who decides the neighborhood, schools, the extracurricular preparation the child or the parent? America is a great place and you do see some Bill Clintons and some Ronald Reagan’s however these people are rare and to not share typical backgrounds of the people they work with.

 

[mary_bobo]

I do not think so, I wish this was correct however what data I have seen suggests the opposite. If you know of some data which supports the concept that high income and high wealth people are actually a cross section of normal schools, parental wealth etc, I would love to see it.

One issue here is who decides the neighborhood, schools, the extracurricular preparation the child or the parent? America is a great place and you do see some Bill Clintons and some Ronald Reagan’s however these people are rare and to not share typical backgrounds of the people they work with.

How about Bill Gates. Ted Turner took his father’s failing billboard sign company and look where he is now. Sure, some people do inherit wealth but many do not. Where do you think all the charitable foundations come from? I know it is fashionable to put down successful people, but I don’t think you have painted an accurate picture.

 

[vern_humphrey]

I do not think so, I wish this was correct however what data I have seen suggests the opposite. If you know of some data which supports the concept that high income and high wealth people are actually a cross section of normal schools, parental wealth etc, I would love to see it.

High income people are pretty much normal, ordinary people who have learned about saving and investing. The average millionaire, for example is married to his first wife, lives in the home he and his wife bought early in their marriage, and their neighbors are usually unaware of their financial status.

One issue here is who decides the neighborhood, schools, the extracurricular preparation the child or the parent?

The answer is, “all of us.” If we do not insist on good quality schools (and we obviously do not – witness the schools in poor districts!), do not foster the “anyone can do it” mentality (as opposed to the “you poor thing, you haven’t got a chance” mentality) then not many children will succeed.

But the fact is, any normal child can succeed. The fact that they do not is mostly due to the attitudinal barriers we place in their way.

However, if a person reaches maturity and fails to learn about good work habits, saving and investing, I say the fault by then falls on the individual.

America is a great place and you do see some Bill Clintons and some Ronald Reagan’s however these people are rare and to not share typical backgrounds of the people they work with.

Ah, but is their lack of foresight and investment a matter of “can’t” or a matter of “won’t?” I can recall a discussion with some young people on a project where I worked – every one of them made more than the median income. I was explaining saving and investing to them, and one of them angrily objected, “Your’e saying I have to adopt a lower standard of living!!”

Yup. You can’t have your cake and eat it too.

 

[Texas_Roofer]

How about Bill Gates. Ted Turner took his father’s failing billboard sign company and look where he is now. Sure, some people do inherit wealth but many do not. Where do you think all the charitable foundations come from? I know it is fashionable to put down successful people, but I don’t think you have painted an accurate picture.

Didn’t Bill Gates attend an elite prep school and then Harvard? I think is Dad was a successful lawyer? Did not Ted Turner’s family live in a Plantation? and you say they had a family business? That is not to say these men are not successfull, it is to say they probably did not earn every dollar invested in themself.

 

[Texas_Roofer]

…The answer is, “all of us.” If we do not insist on good quality schools (and we obviously do not – witness the schools in poor districts!), do not foster the “anyone can do it” mentality (as opposed to the “you poor thing, you haven’t got a chance” mentality) then not many children will succeed.

But the fact is, any normal child can succeed. The fact that they do not is mostly due to the attitudinal barriers we place in their way.

However, if a person **reaches maturity **and fails to learn about good work habits, saving and investing, I say the fault by then falls on the individual.

Ah, but is their lack of foresight and investment a matter of “can’t” or a matter of “won’t?” I can recall a discussion with some young people on a project where I worked – every one of them made more than the median income. I was explaining saving and investing to them, and one of them angrily objected, “Your’e saying I have to adopt a lower standard of living!!”

Yup. You can’t have your cake and eat it too.

Vern
In the financial example it is not a question whether a person should do their best, but the fact that early investment is critical and early means usually before the person becomes mature. So it is vital to be taught important information correctly and early in life. Combine a good education with some investment and you breed the environment for success. Yet many will still fail as is the nature of free markets. Talk to many successful people many will tell you of time in their life when a particular person or event changed everything. Those events come in all forms whether it was a particular loan, sale, piece of information, or just luck good or bad. I have known a few who basically said they had to go in business because they could not find a job! This is totally different than being lazy in which no event could really matter.

 

[vern_humphrey]

Didn’t Bill Gates attend an elite prep school and then Harvard? I think is Dad was a successful lawyer? Did not Ted Turner’s family live in a Plantation? and you say they had a family business? That is not to say these men are not successfull, it is to say they probably did not earn every dollar invested in themself.

Neither Gates nor Turner are typical – but Gates made it on his own. His father was a lawyer, not a software engineer. And Turner took a failing business and turned it into a great enterprise.

There are plenty of people who merely saved and invested. Some went out on a limb and started a family business – like the plumber who just left here. He only has a highschool education, and not a very good one at that, but he’s a millionare.

 

[vern_humphrey]

Vern
In the financial example it is not a question whether a person should do their best, but the fact that early investment is critical and early means usually before the person becomes mature.

In investing, the earlier the better. But many a person has made a million well before retirement, with no trust fund or inheritance at all.

So it is vital to be taught important information correctly and early in life. Combine a good education with some investment and you breed the environment for success.

Which is why we should be clamoring for a better education for today’s children – one which includes things like economics, saving and investing, how to read a balance sheet and so on.

And we should oppose anyone who broadcasts the “cult of the victim” message, telling kids they can’t succeed and that anyone who does succeed has somehow “cheated.”

Yet many will still fail as is the nature of free markets.

But if we educate our children to save and invest and do not encourage them to adopt the “cult of the victim” many more will succeed.

Talk to many successful people many will tell you of time in their life when a particular person or event changed everything.

Talk to many failures and they will tell you of time in their life when a particular person or event changed everything, too. But neither failure nor success is pre-ordained. Most successful people had as many chances to fail as the drunk in the gutter – who probably had as many chances to succeed as my plumber.

Those events come in all forms whether it was a particular loan, sale, piece of information, or just luck good or bad.

That’s an almost pagan view of “luck.” We aren’t fated to succeed or fail from the outset – we make our own luck.

I have known a few who basically said they had to go in business because they could not find a job! This is totally different than being lazy in which no event could really matter.

Gee – you mean people actually got off their butts and started businesses and succeeded?

I know a fellow who made a pact with his wife – they’d go where the first one of them got a job. She got a fairly decent job, so they moved and he took the only job he could get – as a pizza delivery man. That was forty years ago – now he’s a top official in the pizza company and owns several pizza franchises.

By and large, we make our own luck.