REAL WEALTH.

I Am Interested in Creating Wealth.
But lately I have been thinking more and more about real wealth. The picture on the right illustrates the kind of wealth we can all enjoy whether we have money or not. Our world is filled with so many wonders, everything from trees and flowers to little miracles like the one in the picture. Like so many others, I have spent so much time trying to create financial wealth that I have not taken enough time to enjoy the non-material kind. I plan to remedy that situation in the time I have left.

Re-Distributing The Wealth. To quote the president, " When you spread wealth around, everyone benefits." Many of us disliked that statement but it is true. Even the most conservative among us wouldn't want to live in a country where most of the residents live in poverty while a small percentage live in luxury. The question is, how far should we pursue the objective of spreading the wealth? Viewed from another angle, it appears obvious that if we tax high earners and give their earnings to the low earners, we may reach the point where it becomes less beneficial to work hard and produce more, and more beneficial to enjoy the fruits of the labor of others. Where do we stand in this process? You decide.

Our Tax Code Has Always Spread The Wealth. Since the beginning of the income tax, high earners have paid more than low earners. Not just on an absolute basis but on a percentage basis as well. We labeled the Bush tax cuts as "tax cuts for the rich" but is this really true? I was blown away by recent data that showed 47% of Americans will pay no income tax in 2009. It was also astounding that a family of 4 can earn $50,000 and pay no taxes. In fact, they will receive tax credits that exceed the tax they pay. Many of my readers will not believe this, so here are the cold hard facts. 1. The standard deduction is equal to to $11,400. 2. Personal deductions are 4x$3650 or $14,600. 3. This leaves $26,000 in taxable income and a preliminary tax obligation of $2,640. 4. Tax credits are $1,000 per child or $2,000. 5. The stimulus package allows $800 in credits, leaving the "taxpayer" receiving a check for $160. Granted, a family of four earning $50,000 per year isn't getting rich, they aren't reduced to eating dog food either. They receive the benefits of an educational system, public safety, infra structure, and national defense. All paid for by someone else. Looking at the top 10% of wage earners, they earn an average of $$366,400 per year and pay 73% of all income tax. If this isn't spreading the wealth, I don't know what is. I believe that one factor that allowed our country to surpass others in economic growth is the fact that it is possible for us to work hard and keep enough what we earn to enjoy a high living standard. If we keep an excessive burden on the high earner group, they may decide that they aren't being adequately compensated for their efforts and join the pay no tax group. When we reach that tipping point we can say goodbye to job formation and economic growth. We can also expect a lower living standard for everyone.