The bottom line up front
Warren Buffet: “Frankly, I think, that Bill and I should have a higher tax rate on the income we get. We pay a lot of taxes, but, it’s really at a very low rate. And, it’s at a rate that’s less than half the tax rate that I was paying 25 years ago when I was making a lot less money. They’ve really taken care of the rich.”
Bill Gates then affirms the statement and agrees.
I’m sharing this idea because it’s a good idea, despite the fact that a person can’t make a government-related statement without starting a political fight. If you want to try your best to skip all the political parts, go right over the next section and watch the two short videos!
I briefly address political parties
In my opinion, there are two governance-related problems in our country that are most important. First is the wealth unfairness problem and second is the democracy-threatening vitriol of current politics. First one is the topic of today, second one is a long topic for some other time.
First, I have to say that the recent Republican tax cut did lower taxes for almost all Americans. Good thing! But, it came with massive, massive tax cuts for the ultra-rich. The savings come from the way corporations are saving on investments and employee healthcare costs and stuff like that. Masked by the free gift to poorer people is a huge unfairness to them that will come back around sometime in the future.
I also have to say that Donald Trump has built his entire career history on conning poorer people, so we can only assume he will continue that way. He’s great at driving the legislators and influencing the TV watching public, so his conning tendencies are influential.
So, the Republican congress patterns and Donald Trump’s behavioral patterns suggest that a smart tax code won’t come unless a different party has control. Sorry, middle-class Republicans, that’s the cold, hard truth.
A more libertarian view might say that we should try to get rid of all taxes, so there’s no problem here. But, I would respond that, we have to have a little taxing. And, if we have to do a little bit, should it mostly be poor people paying it?
Going back to the main point of this section: we need different leadership or we will not address the huge income gap between the rich elite and others nor will we address the huge national debt.
Side note and lost politics thought: One problem is that our only other major party — the Democrats — seem to keep running on a platform of addressing these issues, but they have bad solutions. For instance, what if we just make universal healthcare and a four-year college education for all? That helps poor people right? Sure, it would seem to even the gap between the rich and the poor. But, just implementing those programs does nothing to actually help poor people as a group, if taxes are divided the same. Poor people still pay too big of a portion of the total tax. The real result of doing that is that we take away the savings of hard-working poor people to pay for the healthcare of lazy poor people. Everyone now has healthcare, but hard-working poor people will be punished and it will be much harder for them to gain wealth. (Unfortunately, I guess that’s a solution some rich people will accept, and they have enough money and influence to support it.)
The background info
Here is a video of clip of Warren Buffet and Bill Gates being asked about this in 2011, back when the problem wasn’t as bad as it is now:
Here is a video that shows just how massive the gaps are:
I would like to kindly remind readers that becoming very rich is a question of luck. There are no correlations between becoming rich and any other thing that we know how to measure. The scale of dumb to smart or lazy to hard-working does not match the skewed scale of those who earn tons of money.
The bottom line is this: does the CEO work 380 times harder than his or her average employee? Or, is Bill Gates a billion times smarter than you? (Because he has a billion times more money than some people in the world.) If height were distributed like wealth, most people would be ants and a couple people would be mountains. If IQ were distributed like wealth, most people would be worms and just a couple people would be astrophysicists.
Here’s a quote from my previous article on the subject of becoming rich:
… For example, intelligence, as measured by IQ tests, follows this pattern. Average IQ is 100, but nobody has an IQ of 1,000 or 10,000.
The same is true of effort, as measured by hours worked. Some people work more hours than average and some work less, but nobody works a billion times more hours than anybody else.
And yet when it comes to the rewards for this work, some people do have billions of times more wealth than other people. What’s more, numerous studies have shown that the wealthiest people are generally not the most talented by other measures.