OWS is targeting the wrong group of people. They should find the cause for the disparity in pay, increased student loan debt, and bank bailouts instead of blaming the rich/private industry for things the system allows them to do. I do think that they are close to initiating real change if they can just adjust their focus to the more accurate causes for the disparity in pay. The tough thing is that there are so many things that are at fault for their current predicaments, many of which aren’t easy to deal with quickly and some of which are being manipulated.
I was talking to a coworker of mine about how they’re missing the point. I mentioned in another blog that the key to getting rich is not only formal education, but also financial education. Armed with financial education people begin to gain what Robert Kiyosaki calls an unfair advantage. One of the biggest points he makes is about how rich people, those who invest in the B and I quadrants, use taxes to their advantage. I’ll write another blog post with some simple examples that deal with my industry and how someone could greatly benefit in their financial situation by incorporating and greatly reducing their taxes doing the same exact activities. Taxes lead me to Warren Buffet.
Recently Mr. Buffet wrote an op ed piece in the New York Times stating that billionaires have benefited long enough and that it is now their turn to share some of the tax burden of the country in the way of increased taxes. In the article he cites how, on a percentage basis, he actually pays less in taxes than his secretary. There would be some people would be enraged by a billionaire paying less in taxes than a secretary, but the rich know why he does. See, invest income is taxed at a lower rate of 15% whereas traditional earned income is taxed based on the bracket that you are in. Warren gets paid investment income whereas his secretary does not. Why is that?
The reason why is because the government actually wants to collect more in taxes. Huh? It sounds counterintuitive, but give it a second. The government taxes investment income less so as to encourage individuals to save and build investments, and the governments hope is that some of those investments are in the form of businesses, which in turn employ people who earn a paycheck and pay their bills AND THE BILLS. Whose bills you ask? Here’s the kicker, the government’s bills. As previously discussed (Buffet and his secretary) it is the worker who pays more in taxes (generates more tax revenue for Uncle Sam) than the business owner. So all these people that are upset at corporate America for all their hoarding of money and limited pay raises to their employees are actually upset at the wrong people.
What is beautiful is that these people can enact changes through the power of their voting. They can elect officials that will change the tax structure so as to reflect what it is the country/individual wants whether that is in the best interest of the country/individual is up to personal opinion.
I was talking to my coworkers about the NBA lockout as they’re Jazz fans and I just love basketball anytime. I asked them, after one of them had mentioned that the players are rejecting the owner’s offers because the players want a 50/50 split, which should get more, the owners or the employees? Without hesitation they said the owners. One of my coworkers went on to say that those that put up with the risk and stand to lose it all deserve to get more. She even went on to say that she isn’t willing to risk her family’s well being by starting a business of her own. In my head I was thinking, “How could you NOT risk your families well being to get ahead?”
I don’t see why OWS doesn’t see this. Now of course some of them are complaining about huge bonuses of top employees, but again you can’t blame them especially if they’re the actual owners of the company. Instead the blame needs to be on the system.
Also think about the credentials of the rich. I’m going to bet that most of the rich much formal and informal education. I read an article the other day that said college graduates only face about 4.5% unemployment right now. I’ve got a good hunch that those that have huge bonuses and salaries and are the cause for all the angst of these people have higher education and informal financial education.
Again though you could blame the government for that disparity. You could also blame the banks for giving loans that are such a burden on the population. What they don’t understand or realize is that these banks are giving out loans because the government is guaranteeing payment to lenders whether or not the student repays the loan. If the government stopped this practice then banks wouldn’t lend out student loans for people to go into massive amounts of debt with and schools would be forced to reduce the amount of tuition they charge since their rates (prices) would no longer be affordable to the average American. Then we could go back to the good old days where someone could work part time during the summer between semesters and graduate with a degree debt free and thus make up the disparity of pay.
With running deficits and bailouts the government is printing about 1 billion dollars a day. From 2008-2011 the money supply went up 300% due to all the QE and TARP by our government. With increased supply of money that doesn’t compensate for GDP growth or population growth you’re going to run into inflation in all areas. Tuition costs are exceeding reported inflation at a pace of about 6-7% a year. This places education out of reach for much of the lower class and middle class populace, which then means they get paid less due to less education and the jobs that pay well. Cut deficit spending (vote out the bums you think are causing the problem), which then reduces inflationary costs for all, go back to school, save up for investments, and become the 1%.
Nuff said for this post.
No comments:
Post a Comment