Get Rich Quick

April 25, 2011 by  
Filed under Blogs, Hot Button / Lynn Ashby

By Lynn Ashby                                                            25 April 2010

Did you finished paying your income taxes, or did you get an extension, or like 45 percent of Americans, you don’t pay any income taxes so you really don’t care? Whatever your situation, it’s time you and I stop being poor, start being rich, and figure out a way to avoid those nettlesome IRS guys.

First, let’s set the stage. In this country, wealth is highly concentrated in a relatively few people. The top 1 percent of households owns 35 percent of all privately held wealth. The next 19 percent – mostly small business types — has 50 percent. OK, 1 plus 19 means that just 20 percent of Americans own 85 percent of our nation’s wealth, as well they should. So who has the bottom15 percent of our wealth? The bottom 80 percent of income earners. I guess they have to spread it around.

Ah, but who are these top 1 percenters? There are 1.4 million of them, each receiving about $380,000 or more a year. That’s 25 percent of the nation’s income, but they pay 28 percent of all federal taxes, including 39 percent of federal individual income taxes.

If that top 1 percent has more than its share of wealth, we must not be jealous. Or as the Kennedy family motto goes: don’t get mad, get even. We need to join the top, even at the expense of the great unwashed. A few of them would say we are engaging in class warfare. You bet. We’ve got class and are definitely waging warfare on the have-nots. Besides, we’ve got the trickle-down theory. The poor would call it the trickle-on theory.

Our best bet is to become CEO at a major corporation. Last year Exxon’s chairman received an income package worth $21.5 million. The CEO of Viacom got $84.5 million. The head of Occidental Petroleum: $76.1 million. Oracle: $70.1 million. The median compensation for CEO’s in all industries as of early 2010 is $3.9 million; it’s $19.8 million for those listed in the Dow-Jones Industrial Average. But the median worker’s pay is about $36,000. To compare, the income ratio between an average company CEO and the average worker in that company was 344 to1 in 2007. In Europe, the ratio is about 25 to1.

Some make it on their own. Last year Oprah earned $315 million. Lady Gaga earned $62 million, Michael Jackson, dead though he may be, earned $275 million. Mark Zuckerberg (age 27) received one dollar in salary last year, but is worth $6.9 billion. Forbes says Glenn Beck made $32 million last year. A few Texans do pretty well. Beyonce reportedly made $87 million last year; Sandra Bullock; $56 million, “Dr. Phil” McGraw; $80 million. Good thing we don’t have a state income tax or our kids would have teachers.

If you are 6 foot 8 and can dribble and/or sink a basket, you qualify for a fortune.  NFL owners are locked in a wage dispute with their players – billionaires vs. millionaires. Big money is not limited to the pros. Fox Sports Media Group will pay the Big 12 Conference (which now has only 10 members) $1.17 billion over 13 years to air 40 football games each season. Get your share.

Here’s an idea: Since the U.S. Supreme Court has ruled that corporations are actually people and thus can donate to political campaigns, we could call ourselves G.E. That firm last year made $14.2 billion in profits and paid not one cent of federal income taxes.

From 1979 to 2007, the average tax rate for all Americans dropped by 8 percent. For that top 1 percent, it dropped 20 percent. In just the period from 1992 to 2007, the tax rate on the top 400 households — those with an average annual income of nearly $350 million — fell by more than a third. In fact, their tax rate is now less than that for average Americans. Meantime, between 1992 and 2007, when income for the average household grew 13 percent, the income for the top 400 households grew 399 percent.

Warren Buffet (worth $42.2 billion down from $47 billion) figured out that his secretary pays a higher proportion of her income to the IRS than he does. Or as Leona Helmsley told her housekeeper, “We don’t pay taxes. Only the little people pay taxes.” Helmsley later went to prison for federal tax evasion.

Stop worrying about the estate tax, or death tax as the deadly rich like to call it. Only 1.6 percent of Americans receive $100,000 or more in inheritance. On the other hand, 91.9 percent receive nothing. Our job is to be so rich that after our death our heirs pay and pay.

Wall Street snake oil salesmen and corrupt hedge fund managers are making a fortune, but some of you are wondering about going to the slammer for all this hanky-panky. You probably remember the S&L debacle of the late 1980s (Texas led the way in sleazy dealings). At that time, special government task forces referred 1,100 cases to prosecutors, resulting in more than 800 banking officials going to jail.

Today, don’t worry about the tax man. IRS eyes are smiling on the wealthy. In 2008 the FBI scaled back its investigation of the Wall Street and housing scandals, and the Justice Dept. rejected calls for more scrutiny. Name one big-time banker or stock broker who went to jail. Bernie Madoff and Allen Stanford don’t count since they had their own Ponzie schemes. We’re safe.

Finally, about those 45 percent of Americans who don’t pay federal income taxes, we must drop the other shoe because this is a deliberately misleading stat. These same people pay directly or indirectly fees and fines plus property taxes, school taxes, sales taxes, taxes on gasoline, switchblade knives and, of course, that other shoe. Individual income taxes only contribute 45 percent to the fed’s budget. Just remember, Texas doesn’t have an income tax, but still wrings billions out of us.

Ashby is taxed at ashby2@comcast.net

 

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