income tax chartMoney, money, money
Always sunny
It’s a rich man’s world

… so the song goes.

Money’s a funny thing – it seems that everyone wants it but at the same time they have a low opinion of the rich.  It’s not uncommon to hear “…those filthy money grubbing bastards!” and lately with all the shenanigans on Wall Street it’s open season on the rich.

Now I am not rushing to the defense of the rich, but really, isn’t it time we stopped all this rich bashing?  I think it’s a good thing that there are rich people and truth be told yes, I’d love to join their ranks, I mean, let’s be honest, why else do we buy lottery tickets and even line up to plonk down our precious after tax earnings in exchange for a little scrap of paper that, odds against odds, will be the winning number and thus  open the magic door to the vault of wealth to us?  The larger the pot, the more people buy.

I like money.  There I said it!

Somehow in our society it is considered somewhat gauche to own up to liking money.  Money is evil, money is crass, money is bad, money does not bring happiness, money corrupts … the list is endless.  It’s usually people who don’t have money who say these things, but I find that it really isn’t entirely their fault; as much as I can figure it out they were brought up that way.

I wasn’t.  I was not born in North America nor did I grow up here.  True, in my family we did not discuss money but inherently we knew it was a desirable instrument to have.  When dad would come home from his business trips, he would sit at the table counting the money he got paid by his customers.  I loved watching him count it.  He would place a pack in one hand and then much like a croupier sorting his deck of cards, he counted  and placed different amounts into different bundles.  One bundle was for mom to run the household.  I always knew from the size of that bundle whether the business trip was a successful one or not.  The size of “mom’s” packet often determined how we ate and whether the shoes had to wait for another month or not.  If it was a good trip I would get a money note to spend.   So to me, money was always good.

Later, when I went to work in the corporate world, my pay packet was always delivered to me at my desk by a clerk from accounting and it was always in cash.   I did my own counting when I got home.  I loved it.   It was only when I came to Canada that payment was by check.  To his day, I prefer to have cash in my wallet and use it for my day to day purchases, leaving the credit card for big ticket items.

But the rich?  Oh yes.

The people we love to hate and secretly wish to be.

Why?

I did a little bit of snooping and Googling.  I think it’s a very good thing that there are rich people, you see, if it weren’t for them you can bet your bottom dollar that the rest of us  would be paying higher taxes.  I have always suspected this but now there is empirical data to support my suspicions.

The top 1 percent of income earners paid 40 percent of all federal income taxes in 2007, while the bottom 50 percent paid only 3 percent. More than one-third of U.S. earners paid no federal income tax at all.

Source:  Internal Revenue Service

Another interesting statistic is that the top 10% earners paid 71% of all income taxes.  Now the 10% includes the merely high income earners at $100K and above .  Depending on where you live that can merely be a good income or put you into the upper middle class category, but still it is above the  U.S. household median of $60K.

As with everything in life, there are some who are better, better at sports, better at math, better at sciences, better, better and more better – and there are some that are better at making money.   I read that if all the wealth in the world were equally dispersed amongst the 6 billion on earth, each man, woman and child would have $1.6 billion in his back pocket.  That was a while back.  The total wealth of the world in terms of money has increased since then.  What was interesting about that read was the observation by the author that within 6 years or less, the money would return to the same concentration levels as before the division.

The main reason being is that not only are some people better at making money, they are also better managers of money.  Think about lottery winners.  While there appears to be no real hard data as to the exact figures, most lottery winners return to their previous financial status whether that be comfortable middle class or below broke.  The most common soft figure is 70% return to their previous status sometimes within as short a time as one year.  Lottery is a regressive tax. You generally have to understand money in order to accumulate it. The same goes for the redistribution of world wealth.

I also think that stewardship of money is given to those who do more with it.  The rich get a bum rap.   They support charities, fund cultural events, help educate the less fortunate, set up foundations and serve as valuable mentors.  Before the cynical jump on the soapbox and say that the disadvantaged would not need the largesse of the rich if  they had the $1.6 B in their back pocket – I point again to the lotto winners.  Others will point to the tax benefits that such donations give to the rich – yeah?  What’s the point?  I don’t think that governments would put the money to the same good use but then I again cite the statistic that 1% pay 40% of  all federal income taxes collected.   Seems to me like they’re paying well enough.

I think the next best thing to being a rich person is having rich people in our society.

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