A Hint of What Could Be
Recently, a glimpse of what America could be was mildly covered by the press without a hint of seeing the possible potential. Warren Buffett, the founder of Birkshire Hathaway Inc. (a very successful high-end mutual fund) offered to combine his $40-50 Billion with the Bill and Melinda Gates Foundation, which would then close in on the $100 Billion endowment figure. Buffett was apparently attracted by the Gates’ big vision perspective for their foundation. Rather than doling out small grants to a large number of worthy beneficiaries, the Gates organization looks for large world-changing projects that need huge funding.
America has thousands of foundations (Corporate, Private, and Community) with professional board members working hard to build their communities. These are rich people quietly leaving their wealth behind for the good of you and me. Individuals who have worked hard to make or preserve generational wealth. They chose to keep it working for their benevolent cause or in combination with other even greater causes.
Where as most of us are spenders of our own (and others) money, these philanthropists find joy in saving and preserving. These are also the folks that are battered by politicians "lower taxes for the rich," as if their group is the scum of the earth and surely they deserve to be taxed to the hilt just to be fair.
On the contrary, I say honor those who have worked hard (or smart) and encourage their wealth creation in hopes they are savers, not spenders. Here is a vision: If private wealth building could continue on a grander scale, at some point a huge corpus could help diminish the need for government to grow. Remember the beauty of endowment is the preservation of the principle, only the interest is spent. If Federal and State political vision, including tax policy, could see this opportunity, it might happen more quickly and in my grandchildren’s lifetime.
What is your vision? What big idea do you have and would like to share? Comment on this blog or give your vision and maybe see it in print in BIZlife Magazine.
posted by Bob Kober @ 12:10 PM
3 comments
3 Comments:
I don't know who it is who thinks of the wealthy as the scum of the earth but interestingly, the heroes of your story, Bill Gates and Warren Buffet, recently urged congress to reject Bush's plan to end the estate tax.
Thanks Roch, What would it be like if we rewarded effort? If you made over $200,000 your tax percentage would go down. If you left a $10 million dollar estate to a foundation the government would kick in another 5% as an incentive to do it. I disagree with Buffet and Gates, they think taxation is the best incentive to get people to be philanthropic, but it's negative. There must be an incentive that would appeal to man's higher motives. So you don't hear the din of voices that would like to rearrange wealth and take it from those who have and distribute it to those who have less, through higher taxes. Anyone who feels that way would call the rich and their spokesman something. I thought scum was better than the words others have used. What's a better word in your opinion? BK
Personally I liked Buffett's comment about not believing that in inherited wealth...something about belonging to the "lucky sperm club."
Just finished reading an interesting book called Perfectly Legal about the author's research into what he sees as an unfair tax system. He doesn't focus exclusively on the disparities between the poor and the rich, but rather on how the middle class and even the lower upper class is increasingly carrying the water for the very rich. The author believes, much as Buffett and Gates' father have long publicly stated, that we should all help pay for the society that has enabled us to succeed and be rich and that unfortunately most of the very rich (we're talking the top .1%) and the large corporations aren't paying their fair share. He also makes the case (effectively I'd say) that both the Democrats and Republicans make sure they take care of the "political donor class."
I'll be the first to admit that the book is opinionated and I don't agree with all of it, but I do think that we could come up with a more positive system. Personally I'd like to see a simpler and fairer tax system and a smaller government, which hopefully would lead to a lower effective tax rate for all of us.
I'm not smart enough to know what exactly it would look like, but I do know it could only get better than what we have. And Bob I like your idea of a more positive system and I would welcome anything that would steer more money to the non-profit sector and away from the government. Perhaps a little carrot and stick approach would work.
For the record I also think that the estate tax is a good idea if it allows estate assets to flow to the community (i.e. philanthropic groups) tax-free and to family at whatever the family's income tax rate is. That money was not earned by the progeny of the person who is passing away and contrary to popular belief not all of it has necessarily been taxed in the first place.
Just a little more than my two cents.
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