Wednesday, December 1, 2010

Reality Check - What REALLY Happens When You Tax The Rich

You've heard the arguments on both sides. What you have not heard from either side is the truth, as it really is.

Being among the class that the Democrats are so eager to tax, and having many wealthy friends, I can state the following with complete conviction - and if you actually think it through, you will easily see it is the truth.

The "excess" money the rich have that liberals want to take from them - what do you think that rich guy does with that "extra" money? Let's first determine what he will not do with it.

He will not spend it on consumer goods. Doesn't have to. He's rich. He already has his home, cars, boats, summer place, Rolex - nope, he's not going to spend it.

Will he stash it in a mattress where it does him no good? Certainly not - he did not become wealthy by being financially stupid.

What does that leave? A rich person wants to make more money, just like the poor person. So he invests his excess money. What does he invest in? Businesses that have potential for growth and greater profits. Are you with me so far?

The business has one purpose - to grow and increase profits. The investment capital from rich old guy is used to expand, to increase profits. Now for a basic fact: a business generally cannot expand without hiring more people.

So here it is in a nutshell - greedy rich old guy has extra cash. Greedy rich old guy invests in greedy business. Greedy business uses that cash to hire employees. Unemployment goes down. Consumerism goes up because greedy little middle-class worker spends his income. More people are earning money and paying taxes. Greedy government has more tax revenue.

Greed fuels every economy. Without greed, NO ONE would do more than they have to. No one would invest. Businesses would not expand. And the economy stalls.

Not that greed is good. But it is useful, and can do good.

Of course, many committed liberals who want to tax the rich not because they want to help the poor, but because they want to turn the nation socialist - well, those people will still argue against the truth. They will claim that the rich have the cash to invest now, but they are not doing so, ergo it does not create jobs. But that is a premise built on a falsehood. Here's why...

The rich do have cash to invest. But we are rather hesitant to do so at this time BECAUSE the liberal policymakers have created such a hostile environment for investors. They have told investors that they will increase capital gains taxes. They have told investors that their health care law will encumber many businesses, slowing their growth. And they have told investors they intend to tax them more. And they won't even let them know what next month's tax rates will be.

As a rich old guy, I can tell you that as much as we want to make more money, neither I nor my friends are anxious to invest in such a hostile climate.

If America is to prosper once again, we need to let the rich do the things they do best - make money. When money is being made it is only because people are being put to work. As investors make more, they invest more - because they already have everything else. And the more they invest, the more people get employed and the more tax revenue gets put into America's coffers.

I guess the "moral" of the story is just this - don't bite the hand that feeds you. Yes, we may have too much money. But we EARNED it, every bit as much as you earn yours. And we use it to fuel the economy - when the environment is friendly.

Instead of stealing from the rich, preventing investing, growth and job creation, we should be making the American Business Environment a friendly place for business. Businesses - and jobs - go where they are treated well.

America does not treat them well at all. The lynch-mob mentality fueled by the "wealth redistribution" crowd only drives business, jobs and investment income overseas.

What would YOU do if a lynch-mob came for you?


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