Friday, July 23, 2010

The Rich

All the Democrats in MN are very excited at what they hope is their future capability to "tax the rich" once they manage to get the Governor's office. As per usual, they have some arguments about "who is rich" ... basically they are sure it is either an income of $150k for a couple or $250K. Also, as usual, they are completely clueless.

MPR decided to get an economist from NYU into the mix (you can go listen on the link if you like), and he pointed out a "shocking fact" (for liberals) -- "rich" has a lot more to do with NET WORTH than it does with INCOME!!! Imagine that!!

He said that providing you had a net worth of at least $2.5 Million, a $250K a year income would be the "threshold of rich" ... but the NET WORTH was the more important factor.

The obvious point -- there are plenty of folks that make $150K, $250K and more that would be "on the street" if they quit working. It is very true that those are the kinds of "rich" that MPR and the Democrats love --- the kind that have less choice of restricting their income if taxed, but never the less, those people are far closer to "high income poor" than "rich".

You may have big debt because of going to medical school, setting up your small business, or just because you felt you needed a $400K home, a lake home, a fancy car, cool vacations, or whatever. It doesn't really matter WHY you are spending most of that income, but if you are, then you are not rich. You may in fact be very close to bankruptcy.

If you have to work, you aren't rich. Wealth has much much more to do with your assets and your cost of living (sometimes self imposed, sometimes not). Like health being a good input to help you be happy, but far from a guarentee, income may be an asset in eventually becoming rich, but it will depend MUCH more on what you do with it than the actual income figure.

HINT: Giving it to Democrats in taxes won't make you wealthy ... and given their philosophy and understanding of life, it likely won't help anyone else either. "Doing good" in all but the cases of really really good luck is going to require some exposure to what reality actually is, and mixing up income and net worth is just one more sign that is an area that Democrats are lacking in knowledge. Having "your heart in the right place" only goes so far.

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