An Open Letter to Rich People

[Political Heretic]

Disclaimer: I wanted to write in this "style" simply for effect. I acknowledge that I am making a broad generalization with the term "rich people." It's not my attempt to imply that all persons of great wealth think or act exactly alike. However, when we think about public policy, we can note with substantial evidential backing that wealthy Americans tend to support every tax cut they can find, along with a wide range of conservative economic ideas. This is particularly true when thinking of wealthy individuals actively working in corporate America, and especially in the financial sector (among others.) My "letter" is directed at these particular rich folk.


Dear Rich People,

I'll never understand why, when I talk about the need for wealthy Americans to shoulder a greater burden in taxes, or the need to close loopholes so that corporations pay more substantively toward the cost of keeping America afloat, you always think I'm asking you to do something for charity.

Charity is the furthest thing from my mind! I'm not asking you to be benevolent. Indeed many of you give millions or billions of dollars to various charities. And yet that doesn't change the need for you society to shoulder more of the tax burden than you do. Donating to charity does not guarantee that sufficient funds go to the key infrastructure areas necessary to keep our society healthy.

I cannot figure out why it is so difficult for you to understand that what I am asking you to do is in you own best interests.

Consider these issues from the perspective of what is most beneficial to your sustained and increasing wealth. Right now we have an economy in crisis, and I don't just mean from the most immediate round of recession, more severe than anything most of us have faced in our lifetimes. We have debt spiraling out of control, and we are spending more money than we take in on federal programs. We are on a course that is unsustainable, and leads to economic collapse.

As a rich person, economic collapse would most certainly not be something you would desire, anymore than anyone else would desire it. Economic collapse devalues your wealth and prevents that wealth from growing. But we can't fix our economic problems by simply "ending" all federal spending. Many of you already do not want us to stop spending money on the military, or on our assistance to our international economic or military allies. Which means you look to domestic social spending as the area to cut.

This is absurd, and goes completely against your own best interests! If you are seriously concerned about continuing to make more money and generate more wealth, then a society with unchecked poverty actively impedes that goal. If we end spending designed to create a social safety net for lower-income Americans in various situations, then more people collapse under the weight of debt, more people go bankrupt, more people lose their homes in foreclosure, and more people become dependent on whatever state assistance is left.

All of these outcomes cost money.

And as people become poorer, their ability to function as consumers is diminished. Quite literally, they can't afford to buy your shit anymore. This hits you, dear rich person, right in your pocketbook (or offshore account,) and you thus move to "cut costs" in your businesses. But cutting cost means laying off workers, which throws more people into poverty, creating more people who can't afford to consume.

This cycle impedes the growth of the economy, and also means the that government takes in less revenue to support even the most modest of spending. There is insufficient money for sustaining our countries infrastructure - infrastructure you depend on to do business - which continues to erode. This effects your business' efficiency, and thus profitability. There is insufficient money to support quality education, which means less Americans are getting the training they need to work for you, which contributes to escalating poverty, which impedes their ability to consume.

Collapsing infrastructure, escalating poverty, declining education and a low consumer base makes your society less attractive to investors - domestic and foreign - and impedes your ability to complete effectively on the global stage. In other words, your unwillingness to invest back into the social structure in which you attempt to do business results in the collapse of that structure. And if the structure collapses, so does your business, and so does the value of your assets and wealth.

Alternatively, should you chose to support public policy aimed at strengthening the social infrastructure of your society, you then help create enough revenue for the government to achieve social sustainability - a sustainable society in which you can continue to generate wealth over the long term rather than face economic collapse in the long run. This protects your interests, and the interests of your children and their children's children. Not to mention that it also protects the legacy and success of the companies that you've built and to which you have devoted so much of your life.

Social sustainability requires you to shoulder a substantial portion of the cost of that sustainability. You can't expect the poor to shoulder the bulk of that cost, because they cannot afford to do so. You can't expect the middle-class to shoulder the bulk of that cost, because you will push them into poverty. And either of those choices would lead to the same cycle escalating poverty and decreasing profits previously described.

Which means that there is literally no one else but you who can shoulder the lion's share of the burden for keeping this society running, and running in a sustainable way where you can continue to do business and generate wealth over the long term.

Granted, doing this would require that you "bend" your wealth curve a little bit. In order to create social sustainability, you would have to spend a bit more money on social investment programs (and the easiest way to do this is by paying substantive taxes to the government, high enough that they will adequately fund necessary social investments in infrastructure and elevated quality of life for people in poverty.) And that would mean making a little less money annually.

But doing so would mean that you would still be making profit each year, and you would be doing so while supporting a sustainable market society in which you could be secure in your long term future. You would keep society well-functioning, so that your children would have an excellent chance at matching or exceeding your success. If you don't choose to do this, you will be able to make more money immediately. This is true. But it will be unsustainable, and ultimately you will lose everything, or your children will inherit a failed market and lose everything, and the legacy of the businesses you worked so hard to make successful will be destroyed.

I recommended that you support high enough taxes to adequately fund necessary social investments, and I said that included investments that would elevate quality of life for people in poverty. This is what I think you don't understand: I'm not asking you to do this out of the kindness of your heart. You could believe that all poor people are lazy and stupid and that it is entirely their own fault that they are poor. But guess what? It would still be in your best interest to support (through adequate taxation) social investment programs designed to lift people out of poverty. Why? Simple: so that they can buy your shit.

You have to decide what is more important to you. Is it more important for you to be morally self-righteous and refuse support social investment programs on principle, because you think poor people are lazy? Or is it more important for you to make money in a sustainable way, so that the economy does not collapse, so that you continue to create more wealth for yourself, so that you can pass on wealth to your children as well as a society that is still healthy enough to allow them to succeed?

Let me repeat that: you have to decide what is more important to you. Is it more important to you to make exponentially more money in the short run by demanding tax cuts and corporate giveaways and by opposing all social spending and regulation, even though that choice will lead ultimately to economic ruin and eventually end your ability to make money? Or, is it more important for you to bend your wealth creation curve downward a little bit, and spend a little money now on social sustainability so that you can continue to make money over the long run?

The choice is yours, but it would really be nice if you'd stop making idiotic decisions that actively undermine your own best interests and think about the big picture - for your own sake, and the sake of your future generations.

Love,
PH

[blindpig]

1. Wasted effort

but fair warning.

k&r

[Political Heretic]

4. I know, I was hoping you'd post because I had some thoughts about this:

So... I was thinking about whether or not I should write this, because on one level it misses the point.

I misses the point in that our entire economic structure is designed to keep poor people poor and give the wealthy short term exponential wealth gains. Even if the entire bracket of "wealthy" Americans all agreed that paying more taxes was needed, it wouldn't fix what's broken. What's broken goes so far beyond just appropriate taxation, that it's not even funny. The whole economic system is an unjust sham.

And then of course, there's the other reality that short term thinking is deliberately actively chosen by many. People who are well aware of everything I'm saying and don't care. They simply believe they can swoop in make billions off the backs of everyone else, and get out.

But despite all that, I couldn't help thinking about how funny it is that the wealthy seem to frequently act against their best long term interests.

[blindpig]

6. They cannot help it.

Everything that they understand, that they are, is predicated upon the current economic system. In a way they are as much captive of the system as we are. Which is why we must address the system and not this or that malefactor.

[Political Heretic]

7. True... I've been slowly coming to see the light and I appreciate your posts.

:)

[athenasatanjesus]

2. This letter could work if the rich were all as smart as they advertise.

Unfortunately some of the best ways to get rich involve luck and single mindedness.

[Uben]

3. Don't forget....

...that a lot of rich people, corporate types too, are rich because they have focused on making money and saving it. They have spent time figuring out how they can pay out less and take in more, which of course does not include paying higher taxes. It just goes against their morals. That does not excuse them from paying their fair share of taxes, which they haven't done for a very long time!

There is a good reason why this has happened, and I'm sure you know it. Wealth and politics seem to go hand in hand. It is very hard these days to win any election without a substantial amount of money or some wealthy backers willing to sponsor you. Many have no choice but to take money from those who are very wealthy or corporate interests, who in turn, have expectations (wink wink, nudge nudge)

So those elected officials take the money, hold their noses, and vote for something they know they shouldn't. Multiply that by thousands for all the politicians and elected officials, and then multiply that by about 30 or 40 (# of yrs since taxation was reasonable on the rich). Forty years of politicians voting for the interests of the rich have gotten us to where we are today. And it is still going on! And as long as we allow them to do this, it will not cease. Money has always represented power.

Unless we can eliminate the legal bribes lobbyists shovel to our elected officials, it will get worse.

[lonestarnot]

11. Yes ask the foaming at the mouth out of country control freaks. They'll

let you know how much they like the make-up of the present SCOTUS.

[RaleighNCDUer]

5. Alternatively, here's another, shorter missive:

Dear Rich People,

Ever hear of the French Revolution?

Sincerely,
The Other 90%

[Voltaire]

12. I'm with you

Get that blade a-going and see how fast the rest of the chickenshits change their minds about paying taxes.

[proteus_lives]

18. Enjoy the Reign of Terror Monsieur Robespierre.

[Voltaire]

23. Anything, and I mean Anything

would be better than the Faustian Hell we have created for ourselves. As long as we are going down, lets hand out a little street justice to the folks who brought us Depression 2010

[proteus_lives]

29. History repeats itself I guess.

Your thirst for violence and retribution is noted.

[tavalon]

13. Best.Post.Ever!!!

Says it all.

[proteus_lives]

19. Remember all the innocents that died in the Reign of Terror?

How eager for blood are you now?

[ctaylors6]

8. I spend a great deal of time working with charity fundraisers and would add one thing

I have discussions about this topic with many "rich people." Many of them firmly believe that "big government" cannot solve any of those problems in an efficient way. I've heard some say they'd rather write big checks to good charities than pay another dollar in taxes. To them, taxes = more and bigger government = bad. I obviously don't agree with that, but there you go. I hear them complain about Congress (and have heard this for years now), about how they'd rather spend money on special interests and pork. I even heard one diehard republican talking about the health care legislation, railing against how bad it was. He said a bill expanding medicare to many or more people would have made more sense than the "mess" (his word) they've been creating so far. In other words, he was saying that Congress messes everything up, so why should he help them grow with greater taxes. I've heard more times than I could count how many of them started and grew successful businesses and would never have been able to do so if they'd acted the way Congress acts fiscally.

I spend a lot of time keeping my mouth closed and nodding (don't want to reduce the amount my charities get).

[Political Heretic]

9. I tried to address this:

The problem with contributing through charity, as many wealthy folks do, is that there's no guarantee that critical aspects of a sustainable society will get addressed.

For example, Bill Gates might give billions of dollars to fight disease on poor countries - something that is desperately needed and not to be criticized. But taxes to government ensure that the full range of programs needed for "social sustainability" are adequately funded, and consistently funded.

Government is never going to spend enough money to eliminate the need for charitable giving. All government can do is provide a basic social safety net, and its important that we fund that through taxes in order to ensure that safety net always has a guaranteed source of income.

If one year the overwhelming majority of charitable giving went to Haiti, for example, it wouldn't be healthy socially for basic infrastructure or services to be hit because of it.

You're points are very valid - I just wanted you to know that I tried to acknowledge that as part of my case.

[RaleighNCDUer]

14. Charities give people fish. Government programs teach people to fish. nt

[deaniac21]

21. Reminds me of my year in the Leti Islands of Indonesia with

peace corps. The two of us with sociology degrees try to teach farming to a people who have been doing if successfully for thousands of years. Man, did we learn a TON!

[ctaylors6]

32. I agree. I think the challenge

is getting people who dislike and distrust the federal government to understand why it's still better to have a universal tax base that funds what's needed. Too many of them think health care provided by the federal government = health care provided by Harry Reid et al. I think their decision making sounds something like I'd rather give $5,000 to Doctors without Borders than pay more in taxes to a health care plan that's overly complicated and run by Harry Reid et al.

I'm not disagreeing at all with you. I was simply acknowledging the challenge of convincing people who are, in fact, quite generous that increased taxes are necessary and not just money to fat cats in Washington who spend it irresponsibly. You ask how rich people don't understand that lower tax revenues hurt them in the long run. To them, more money to Washington is rationally not a good solution. I think that's why politicians who run as "washington outsiders" seem to resonate so well throughout the country, regardless of whether they're republicans or democrats

[AngryAmish]

10. This is a long post

must be several thousand words

[Political Heretic]

15. Yep. Too long. I had insomnia and should've edited better.

Sigh.

You win some, you lose some. :)

[AngryAmish]

16. Don't get down on yourself, pro.

[Occulus]

25. 1391, not including the italicized disclaimer. n/t

[Political Heretic]

34. ugh... stop reminding me. I have a blog, and I'm doing the much-needed editing now

before I post it.

[DFW]

17. Definitely with you on the need for higher taxes and less loopholes, but one question:

How much does one have to have before they are rich?

[Political Heretic]

22. For the purposes of taxation, we have to have set numbers

Because there's just no other way to do it.

But what we would really have of course is a progressive tax system in which the top bracket was responsibly higher.

However, I believe that "rich" generally defined would be lower than you might think.

For example, do you know how many households there are in America that make 250,000 a year or more?

Take a guess, just for fun (don't look it up, where's the fun in that!) then I'll finish answering the question.

[DFW]

26. I don't live in America

So I wouldn't have a clue. Is $250K a year rich? Is $240K a year then not rich? If I had to hazard a guess,
I'd probably guess that 1.5% to 2% of households take that in, but maybe I'm way off. In San Francisco or
New York City or Boston, I know that kind of money doesn't go far toward a life of ease. In Boise, it would
probably mean you could live like a king, so no clue. Just like that kind of money in Germany is worth half
what it would get you in Portugal, but it would be worth about 50% more in Germany than it would be in places
like Oslo or Genève. Local cost of living has to be a factor. I know what I pay for stuff here in Germany
is about 50% or more higher (in dollars--and I'm paid in dollars) than I would pay back home in Texas. Luckily
my wife, who is German, is paid in euros. She doesn't make much, but it helps, and the health care thing is vital,
since her cancer care bill would have otherwise wiped us out when she had it 9 years ago.

Here in Germany, when you say how much you make, you say how much take-home you get per month. To a German,
that's what you really are left with to determine what you have to pay rent, food, vacations, etc. There is
so much taken out of gross pay here that your yearly pre-tax income means nothing to the people here. Most
Germans couldn't even tell you how much that is.

I have a daughter living in Manhattan. Her gross pay is $45,000 a year, and she can barely afford a rathole of
an apartment (with real rats). If she were to move back home to Dallas, she'd be able to live comfortably, but
probably not find a job in her field. Besides, she grew up here in Germany, and never really considered Dallas
home much. But she loves New York City, and chooses to stay there (and has a job, which is more than she had a
year ago). Her sister is looking at just about zero job prospects (graduates from Law School in the USA in May).
She will probably end up moving back here, as several German law firms have expressed an interest. If so, she'll
probably start out at 3750 euros a month take-home pay (gross about 7000 euros), but that includes a fabulous
health care insurance plus they FORCE you to take your full 6 weeks of vacation a year to avoid burnout. And get
this: she envies her impoverished sister for being able to live in Manhattan while she might end up in Stuttgart
or Frankfurt. Who's the richer, and who's the poorer?

But to get back to the original question, I think "rich" is in the eye of the beholder. I was just talking to a
German guy I know who moved from a house to a 70m² apartment, and envied Buddhist monks who have and desire nothing,
and therefore feel no poverty at all while possessing nothing. I'd separate the term "rich" from those who earn a
level of monetary income that may or may not seem "high" from a certain standpoint, as some cultures have a completely
different understanding of the term "rich." A very interesting novel from 1979 or so called "Shibumi" had one of the
characters philosophizing that some people with material desires above and beyond their possessions spend their time
trying to get money to acquire more material goods. He speculated that it was a better solution to reduce your wants
to match your possessions, and therefore be at peace (very close to the Buddhist). In Western culture, of course, due
to what we are taught and fed in our media and schools, that is a very difficult point of view to come to on our own.

[Political Heretic]

31. Oh sorry. Here's more discussion...

Is $250K a year rich? Is $240K a year then not rich?

I totally understand, and am sympathetic to the point here. In many ways, "rich" is in the eye of the beholder, I agree. Unfortunately, when it comes to public policy for government and society, we don't have the luxury of just leaving it at that.

In the same vein, "poor" is relative too. And yet for public policy we still need federal poverty guidelines that do define "poor" based on income. Of course, those guidelines have many flaws. One key flaw is one that you are getting at with your post: the definition is fixed, it does not take context into account. What constitutes a "not poor" income in rural idaho may be a very poor income in downtown Boston.

Similarly, when your near the "middle" the idea of an official "cut off" where one moves from "not rich" to "rich" is a little counter intuitive. But again, we don't have any other choice when it comes to public policy.

One way to look at things for the purposes of public policy is not to look at numerical dollar amounts but rather look at income brackets. So, we might advocate that persons in the top fifth income bracket pay more taxes than they pay now in order to keep society healthy and well-functioning.

Another point when thinking of "rich" and public policy - it is possible to measure "wealth" and not just income, and that is often a much better measurement.

Anyway, you are making some very valid, though more philosophical points about definitions and classifications. Virtually all classifications I am aware of become problematic near the borders of the grouping. However, as I'm sure you understand - I'm talking about public policy. And to set tax policy, we've got to have income brackets.

PS - oh yeah, great guess! About 1.5% of households have incomes of 250,000 or higher. Don't forget that what I believe we need is progressive taxation, not just "soak the rich." But in order for society to work, people who have benefited the most from society are just going to have to reinvest more back into society. It may feel like a "burden" but there's just no other way for society to be sustainable.

[DFW]

33. I see where you're coming from

And as a matter of public policy, it's not an easy thing to set federal tax guidelines in a country with such huge regional
differences, and that doesn't even take into account state income taxes, especially in States like MA, CY and NY. No such animal
here in Germany, although the steep income tax rate plus the 19% VAT (again, no state sales taxes to complicate things) make sure
the government gets it share, although even with all that, the German government still manages to run a deficit. I think if we had
their income tax rates (forget the VAT--it's government heroin, as well as a nightmare to enforce and administer), we'd be way better
off as a country, although I draw the line personally at 50% of earned income (unearned is a different story).

My taxes would probably go up under any kind of deficit reduction scheme, but I'm not starving now, and wouldn't starve afterward,
either, rich or not (as we agree, the term is relative). Like the fictional character, I have brought balance to my wants and
possessions, and don't really crave anything I don't have (except maybe a recording studio in my basement--although my wife would
then probably never see me any more, so maybe that's not too clever after all).

Actually, I don't see the additional taxes as a burden, but more like a combination of dues and an insurance policy. Dues as
membership for being a member of a rather exclusive club of relatively comfortable people, and an insurance policy against
living in a society so burdened by inequality that the well-off have to continuously fear being killed by a needy, jealous,
impoverished majority. I agree with my wife that a gated community is as much of a jail as it is a neighborhood.

[starroute]

20. If the rich are going to own us, they need to maintain the system

The problem is that the rich are neither servants of society nor responsible masters of society. They're freebooters, who see their role as one of swooping in, ripping off anything of value, and getting out of town two jumps ahead of the angry mob.

That's the way our culture has treated the environment in general and its the way the rich have treated the social capital on which they depend.

I don't think all of them are too stupid to grasp this fact -- at least some very wealthy people seem able to plan ahead. But it could take some work to get the message through. And until then, the freebooter mentality will continue to dominate.

[Xenotime]

24. I think we should tax the hell out of them..It's the only fair solution to stop the greed.

[Uncle Joe]

27. Whether they take heed of your letter or not, I believe it was an outstanding attempt.

Kicked and recommended.

Thanks for the thread, Political Heretic.:thumbsup:

[butterfly77]

28. Kick &Recommended!

[Starry Messenger]

30. "Rich people grab all the good stuff"

A few of my students said that to me last year. Out of the mouths of babes. Maybe it won't be our generation that brings a reckoning, but I think it's definitely coming.

[Mind_your_head]

35. Economic collape creates the "dangerous opportunities" (aka, "crisis")

that rich people (who can 'more than afford to gamble' take up on.....

Love your empassioned plea/narrative. Us "common folks" are duly screwn (unless, of course, we are clever enough to screw the 'gamblers' first.)

[Name removed]

36. Deleted message

Message removed by moderator. Click here to review the message board rules.

[varelse]

37. You really should do this more often

:thumbsup: