## Sunday, June 6, 2010

### Visualization of the Wealth in the US

Just found another visualization. Whatever side of this discussion you're on, you've got to admit that this is a really good way to make this point.

1. Bill Gates and Sam Walton both started from nothing to build their fortunes. I do not begrudge them their achievements.

With that wealth, they have created business than employ thousands and benefit millions. With that wealth, they make the income of all of the rest of us go further.

If you took all of their wealth and spread it out among all of the rest of the people, it would boost their bank balances for a time, but then, if that's what we're going to do, what will motivate a Gates or a Walton to work as hard as he did to create something that benefits us all? Rather than looking at them with envy, be inspired. Go out and try to do the same. How sad it would be if there was no greatness toward which to work.

As far as taxes go, let's look at some more numbers (from 2005):
The top 50% earns 86.01% of the income and pays 96.54% of the taxes.
The top 25% earns 64.86% of the income and pays 83.88% of the taxes.
The top 5% earns 31.18% of the income and pays 54.36% of the taxes.
The top 1% earns 16.77% of the income and pays 34.27% of the taxes.
The bottom 50% earns 13.99% of the income and pays 3.46% of the taxes.

So, when tax rates are cut, which allows those who employ others to hire more and otherwise expand their businesses, of course the highest earners benefit the most; they're paying the most. How can you cut taxes for someone who pays none?

Rather than complaining about the wealthy, we should be thanking them. Their wealth supports the government.

As a microcosm, look at NYC.
http://online.wsj.com/article/SB123500384765617949.html

Or, consider this parable:

Suppose that every day 10 men go to a restaurant for dinner. The bill for all ten comes to \$100. If it was paid the way we pay our taxes, the first four men would pay nothing; the fifth would pay \$1; the sixth would pay \$3; the seventh \$7; the eighth \$12; the ninth \$18. The tenth man (the richest) would pay \$59.”

The 10 men ate dinner in the restaurant every day and seemed quite happy with the arrangement until the owner threw them a curve. “Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily meal by \$20.” Now dinner for the 10 only costs \$80. The first four are unaffected. They still eat for free. Can you figure out how to divvy up the \$20 savings among the remaining six so that everyone gets his fair share? The men realize that \$20 divided by 6 is \$3.33, but if they subtract that from everybody’s share, then the fifth man and the sixth man would end up being paid to eat their meal.

The restaurant owner suggested that it would be fair to reduce each man’s bill by roughly the same percentage, being sure to give each a break, and he proceeded to work out the amounts each should pay. And so now the fifth man paid nothing, the sixth pitched in \$2, the seventh paid \$5, the eighth paid \$9, the ninth paid \$12, leaving the tenth man with a bill of \$52 instead of \$59.

Outside the restaurant, the men began to compare their savings. “I only got a dollar out of the \$20,” complained the sixth man, pointing to the tenth, “and he got \$7!”

“Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar, too. It’s unfair that he got seven times more than me!”

“That’s true,” shouted the seventh man. “Why should he get \$7 back when I got only \$2? The wealthy get all the breaks!”

“Wait a minute,” yelled the first four men in unison. “We didn’t get anything at all. The system exploits the poor.”

Then, the nine men surrounded the tenth man (the richest one, paying the most) and beat him up. The next night the richest man didn’t show up for dinner, so now the nine men sat down and ate without him. But when it came time to pay the bill, they discovered something important. They were \$52 short!

And that is how America’s tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up at the table any more.

2. Yeah, but it's still a good way to make the point, "whatever side of this discussion you're on."