The rich, Romney and the Fair Tax
Fitzgerald: “The rich are different than you and me.” Hemingway: “Yes, they have more money.” This widely acclaimed but inaccurate quotation captures the spirit of Lewis Diuguid’s very insightful commentary in yesterday’s Kansas City Star. Diuguid quotes Philip Slater in Quest magazine who claims that “rich people are hopelessly addicted to their own wealth.”
In his 1925 short story Rich Boy Fitzgerald was not referring to the nouveau riche. He was not referring to that young movie actor, your favorite basketball star, or your neighbor who won the lottery. He was referring to the old eastern establishment rich.
The old established rich are not concerned with flashy clothes or fancy cars. Remember the Bain Capital story about Mitt Romney’s frugality. He saw that one of his employee’s had a fancy car in the parking lot and asked for a ride. While riding along Mitt mentioned something to the effect that he sure wished he could afford such a fancy car. The employee reportedly said nothing but later said he thought something like: “What do you mean? You could easily afford twenty of these cars.”
The established rich can sometimes be very frugal because they have their eyes on just one thing: other rich people and how much money they have. They are not fooled by showy glitter. They want to know your true wealth. Having money in Swiss banks and the Cayman Islands is as much about impressing their rich friends as it is in hiding their money from Uncle Sam.
To the established rich you don’t even exist if you are not at the very minimum a qualified investor, which means that you have at least a million dollars under management. Cars and expensive homes don’t count. We’re talking about stocks, bonds, collateralized debt obligations, all sorts of financial derivatives and the like.
To these rich people there are only three groups of people: (1) the poor rich who only have between one million and just under ten million dollars, (2) the middle rich who have between ten and a hundred million dollars, and (3) the rich-rich who have over one hundred million dollars. In the old days no self-respecting rich-rich would associate socially with a poor rich person. When Romney was at first reluctant to let people know how much money he had, it was not because he cared about what middle-class or poor people would think of him. He was worried that other rich-rich people would discover how “little” money he had.
The biggest joke among the rich-rich is the so-called Fair Tax which is a proposal to make taxation “fair” by replacing the income tax with a national sales tax (with a slight rebate or so-called “prebate” for the extremely poor).
Since rich people just invest any additional money they get into stocks and bonds and the like, for which there is no sales tax, the Fair Tax is just a way to get the poor and middle classes to pay the taxes so the rich can invest in what economists call their “positional wealth.” The goal is not just to have a lot of money, but to have more money than the “lesser people,” which basically means anybody with less money than you.
The rich didn’t want to be accused of shooting the poor or middle class people in the foot so they came up with the Fair Tax so the poor and middle classes could just vote to shoot themselves in the foot.
Larry’s commentaries can be found via Twitter under NDProfMarsh.
Steven Fetter
66223
9 months agoThis essay is a new low for this website. And that is saying a lot.
Please name one local rich person that fits your descriptions.
Mr. Kauffman is rolling in his grave. The Blocks, Nutters, and other civic leaders that are called on to advance the arts, assist the poor, and enhance our area’s general well being should all object to this nonsense.
Steven Fetter
66223
9 months agoIn the event you believe what you write, I assume you will not be voting for Claire McCaskill. And you must surely not support the Democratic leadership of Pelosi. Reid, Kerry; all amongst the wealthiest members of Congress.
Mark Curran
9 months agoActually Fairtax is a goofy fraud. I’ve offered 50,000 dollars — really - if anyone can prove otherwise.
Legal offer, not a gimmick. All you have to do is show ANYTHING — ANYTHING ANYTHING in HR25 — did I mean ANYTHING — that proves it’s a simple 23% personal retail sales tax to replace all other fed taxes.
You don’t have to prove it works. You don’t have to prove it’s rational. You don’t have to prove ANYTHING except that factually, it’s a personal retail sales tax, as described.
All you fairtax supporters ASSUME the legislation is like the hustle. Heck no, it’s not. There are massive other taxes ON TOP of personal retail sales taxes. IN fact, the strictly personal retail sales part of Fairtax is the SMALLEST part of it! Amazing the power of fine print.
SO learn the fine print tricks in Fairtax — meaning, what else they tax,
And one more thing. Don’t be sucked in by BS again. Read the fine print.Ask questions.
Mark Hastert
9 months ago“Mr. Kauffman is rolling in his grave. The Blocks, Nutters, and other civic leaders that are called on to advance the arts, assist the poor, and enhance our area’s general well being should all object to this nonsense”
The problem, Steven, is that these truly fine civic minded individuals and their families are a small minority. the folks in that room with Mr Romney looks at we hoy polloi with all the disdain his remarks implied. They’re VIP We’re…..not, yet I see more nobility in the working folks I encounter every day than was likely to have been in that room. I see it in the parents waiting on the corner with their kids for the school bus, the guys working in the holes repairing our water mains and the waitress that serves me my lunch at the counter. Regardless of what Mr Romney thinks we’re the VIP, we make the world work.
Lester Bennett
9 months agoMARK CURRAN I see that you used a couple hundred words to accuse HR 25 of hiding massive new taxes over and beyond the retail sales tax, yet you did not give us one example of a massive new non retail sales tax. When I read HR 25 I did not see any of these massive new taxes, So Mr Curran, please I beg you, since you are well aware of these massive new taxes, give me one or more examples of these massive new taxes that you are talking about. It will save me the task of reading HR 25 again.
Phil Cardarella
9 months agoLots of the rich who have earned their own money are quite generous and mindful of the fact that “There but for the grace of God, go I,” when seeing the less well-off.
Some of the children of wealth — JFK, Bush, SR., Kerry — have had the leveling experience of the wars — seeing those no less worthy than they die while they survive.
The Mitt Romneys of the world, alas, are born to wealth and and power prestige, insulated by the same, and educated only to seek “more” — more wealth , more power and prestige.
They have never been of the non-rich. money has never been an object of concern. They have never found themselves hunkered down and sharing the same terrors as the child of a plumber or teacher.
The reason that Romney’s experiences at Bain is important is not because he made lots of money. Not even because his actions created or destroyed jobs in one move or another. Whether or not jobs were created or destroyed was of absolutely no concern to Mitt. The ONLY concern was to make money.
So, a tolerant, moderate, pro-choice governor who created universal health care in Massachusetts can become an anti-gay rights, anti-immigrant, anti-choice candidate demonizing the idea of universal health care — because the actual POLICIES are of utter disinterest to Mitt. Only the desire to win the office.
It is not that individual rich-rich are not kind and generous to their families and those they know peasonally. It is just that they have no ethical or empathetic relationship to others in general. They believe that they are very different. And they believe that they are oh-so better.
To the rich-rich, waiters are not guys like them or their kids, maybe working their way through college. The rich write a check for Harvard or Yale. Waiters are servants — and servants are basically pieces of furniture bearing trays of drinks. It does not occur to them that these fellow-citizens about whom they speak so disparagingly have eyes and ears and feelings — and, ultimately, digital recorders.
A cat may indeed look at a would-be king — and show us just how unkingly he is when showing his naked contempt for us.
Jim Bennett
9 months agoAs a repeat reader of Mark Curran’s so-called FairTax “fine print” and supporter of the FairTax, I respond to the misstatements made by Mr. Curran. Curran is undoubtedly referring to taxation of government consumption when he says “massive new taxes.”
The FairTax bill makes no secret of the fact that the Fairtax taxes all consumption, including consumption by federal, state and local governments. Such consumption includes personnel costs, services purchased from government contractors and other goods and services such as office supplies, etc.
Government consumption is taxed today. Just like private sector goods and services, the cost of the existing federal tax system is embedded in the cost of providing government services. This happens in two ways: (1) Government employees pay the same income tax withholding and employee payroll taxes as private sector employees. Likewise, government employers have to pay the employer share of these taxes. And just like the private sector, governments pay their workers higher wages than they would otherwise have to pay if these taxes did not exist, and (2) Governments also purchase substantial amounts of goods and services from government contractors that also must pay corporate income and employer payroll taxes, and pay their employees higher wages.
So, to prevent governments from having an unfair cost advantage over private business causing a flight from the private sector towards government provision of goods and services, the the FairTax must tax government consumption.
It is patently false to claim that most FairTax revenue has nothing to do with personal retail sales. Private sector consumption accounts for 82.1% of taxable consumption under the FairTax. Less than 10% of the tax base is state and local government consumption.
Indeed the FairTax is the only tax, existing or proposed, that is fair, understandable (only 133 pages), efficient reducing the cost of complying with the tax code by 90%, and fosters economic growth and job creation.
George Hunsucker
Northland
9 months agoBut in the end, the Fair Tax requires drastically fewer high paid/underworked bureaucrats and tax consultants aka lawyers, and removes from govt. the power of choosing winners and losers via the tax code.
That is why libs don’t like it…..