Billionaire admits that the rich gets rich through luck

[Mister Agenda]

I doubt they'd "just leave", they are where they are for a reason. They can already live anywhere. I don't remember any mass exodus of the rich from the Netherlands to the US, and taxes here are something like 50% for rich people.

True, the usual saying that the rich will leave is merely right wing propaganda!

I say let them leave and make sure they pay an exit tax on the way out!

Americans already have an exit tax in effect. Only a few other countries do this. If your net worth is over 2 million or you averaged paying more in income tax than $155,000 over the last five years, Americans generally pay 15% on any gain they derive from renouncing their citizenship.

http://www.forbes.com/sites/robertwood/ ... e-tempted/

[Mister Agenda]

I think some wealthy people do work hard, but it's hard to imagine how anyone is worth $5000/hour no matter what they do.  But that's not the way capitalism works in practice.  Economic gain is not reflected in hard work.  It can be, but quite often it's not.  For example, Wall Street Bankers have clearly demonstrated that the accumulation of wealth can be a simple a matter of performing acts of fraudulent disregard and holding positions in government that result in handouts at the expense of the middle class.

The 'typical millionaire' spent decades running a small business and living modestly. Their assets are largely tied up in their business and home until they retire. There's a much larger element of luck in getting your first billion than your first million. There are even people who get their first million by scrimping and saving while working a middle class job. Putting away 10% of an income that averages $40,000 a year over a career of 40 years with an average return of 8% taxed at 15% would give you a nest egg of over a million dollars at age 62 (assuming you started at 22). It's hard to do, but there are people who do it. Another way is a dual income family that lives on one income and invests the entirety of their other income. Say one makes $50,000 and they live on that, the other makes $30,000 and they invest all of it, same terms as above; the couple would have over a million dollars to show for it in about 17 or 18 years.

I'm just saying there's a big difference between the usual career path of a person with a net worth between 1 and 10 million dollars, and someone with a net worth over 50 million dollars.

[SilentFutility]

I doubt they'd "just leave", they are where they are for a reason. They can already live anywhere. I don't remember any mass exodus of the rich from the Netherlands to the US, and taxes here are something like 50% for rich people.

True, the usual saying that the rich will leave is merely right wing propaganda!

Then how do you explain the masses of wealthy foreigners that are registered as living in Monaco and other tax havens? Offshore accounts in places like the cayman islands?

I'm not saying that every rich person will leave if you raise taxes, but if you vastly reduce the potential wealth of the super, super rich and overtly target them some of them will definitely consider it.

I think that the very wealthy should contribute a lot to society, pointing out the difficulty in making that happen is hardly propaganda.

[The Skeletal Atheist]

This seems to work really well against all types of aristocracy...just sayin'.

[Sal1981]

I'm ambivalent.

On one hand I never bought into any of the "trickle down" saying, nor did I long believe that the very rich worked hard for their money.

The 'Self-Made Man' is a rarity nowadays. Most of it are old business that go in hand with already established wealthy families. The few glimmers on the horizon are the people that profited on arising technologies and new niches, like all the Internet .com bubbles or early computer games publishers.

I'm convinced that people get rich on the backs of others work. The classical worker that has a net output greater than his salary all the while being replaceable by the execs, who only manage the company superficially, rake in most of the profits.

I find it laughable that unions are so hated, when a company is made by its workers.

---

However, managing a business is something that didn't just crop out of nowhere, someone somewhere had the vision and audacity to start a business in the first place and enlisted the help of people and partnering up to get it to stand on its own two feet. Rarely is a company a one-man show. It's just that somewhere down the line the small business entrepreneurship becomes a bloated conglomerate and its structure becomes this top-down company with the top raking in an uneven amount of the profits and the people performing the leg-work get a meager salary.

And neither is it everyone that starts a business on their own, that takes courage and clever investment planning. There are plenty that put in their life savings into a project that failed miserably and are left with an insurmountable debt. Just today it usually takes more than just a fancy idea or niche.

[frosty]

I see that the wealthy have caused issues for others less fortunate, but I do not hold a grudge against the wealthy. I've seen firsthand that if you put dedication, hard work and time into something, you eventually will get some type of result moving forward (that is, if what you are doing is tangible...).

Of course then there's nepotism, and people getting lucky through one time flukes, and being at the right place at the right time... all sorts of things. I do not think the pendulum swings completely in either direction. In reality being rich and successful is a combination of various factors, and yes, "luck" is definitely in there. Although, I've heard before that there is no such thing as luck, only varying degrees of mathematical probability. "Luck" is the perceptual label humans assign to said probability working usually for, but sometimes against, their favor.

[Jason78]

Then how do you explain the masses of wealthy foreigners that are registered as living in Monaco and other tax havens? Offshore accounts in places like the cayman islands?

I'm not saying that every rich person will leave if you raise taxes, but if you vastly reduce the potential wealth of the super, super rich and overtly target them some of them will definitely consider it.

I think that the very wealthy should contribute a lot to society, pointing out the difficulty in making that happen is hardly propaganda.

They haven't left the country though have they?  They've just moved their wealth somewhere where they don't have to live up to their social obligations.  They still live in the UK and take advantage of the country, but then they stash their cash in the Caymans so that they don't have to contribute.

[Brian37]

The 1% believe those words at the gates of Aushwitz.. In my life I've worked as hard as anyone could reasonably be expected to work.. I barely made it to the 99% much less the 1%..

"Hard work" is a myth. Work should be easy not hard. There is a huge difference between work that makes you productive, and work that keeps you unstable and desperate. We have in indentured slave working society. Stability and positive stress on the job increases productivity. Lack of good pay and dictatorial business scripts only benefit the owners and ceos, but it puts negative stress on the worker.

You have to keep the workers happy and reducing stress on the job makes them more productive. Stability and balance on and off the clock increases productivity.

[Brian37]

The problem with taxing the rich very heavily is that they will simply leave, which will have the effect of lower tax revenues overall and it removes the stimulus of their large spending from the economy. They have the means to leave and set up an extremely good and comfortable life elsewhere with ease, so forcing them to share their wealth more than they already do is actually very difficult unfortunately.

That is the current majority of the 1% climate. But if more guys like this, Nick Hanour, COSTCO and Moo Cluck Moo types raise their voices, this can change.

Corporate blackmail can stop if enough people stand up to them.

[SilentFutility]

Then how do you explain the masses of wealthy foreigners that are registered as living in Monaco and other tax havens? Offshore accounts in places like the cayman islands?

I'm not saying that every rich person will leave if you raise taxes, but if you vastly reduce the potential wealth of the super, super rich and overtly target them some of them will definitely consider it.

I think that the very wealthy should contribute a lot to society, pointing out the difficulty in making that happen is hardly propaganda.

They haven't left the country though have they?  They've just moved their wealth somewhere where they don't have to live up to their social obligations.  They still live in the UK and take advantage of the country, but then they stash their cash in the Caymans so that they don't have to contribute.

Sometimes they physically leave, sometimes they have multiple residences in multiple countries, sometimes they only really leave financially.
All of those still result in their home country losing out on a share of their wealth. The point being that there is almost definitely some sort of threshold somewhere, below which the rich are unlikely to go to such great lengths to avoid tax, and above which it becomes worth their while.

The difficulty arises when people want to make the wealthy contribute a far greater share of their wealth than this threshold- it is extremely difficult to do so without them taking these measures to avoid it.

[Brian37]

I think some wealthy people do work hard, but it's hard to imagine how anyone is worth $5000/hour no matter what they do.  But that's not the way capitalism works in practice.  Economic gain is not reflected in hard work.  It can be, but quite often it's not.  For example, Wall Street Bankers have clearly demonstrated that the accumulation of wealth can be a simple a matter of performing acts of fraudulent disregard and holding positions in government that result in handouts at the expense of the middle class.

This really is a failure of understanding of evolution. Evolution is not either luck or work, but both. Gain can be through both cooperation and force. As a species we are both capable of greed and compassion.

[SGOS]

I see that the wealthy have caused issues for others less fortunate, but I do not hold a grudge against the wealthy. I've seen firsthand that if you put dedication, hard work and time into something, you eventually will get some type of result moving forward (that is, if what you are doing is tangible...).

I had a proverbial, but somewhat distant "rich uncle".  He came to the US from Sweden as a young tool and die maker, and partnered up with another guy to start a business, lost his shirt, and went  bankrupt.  So he tried again right away.  He hit it big time on the second try.  I liked that guy.  He was always nice to me as a little kid, but I don't know what kind of skills he actually had.  He was rough around the edges, sort of gruff, so I doubt that he had salesmanship type people skills, but I assume determination and drive were part of the mix.  I was too young to know anything about his business or his business practices.  All I knew was that he was very wealthy and retired, occupying his time on his big estate, which had servant's quarters. Although the quarters were just used to put up guests.  He didn't actually have servants.

For what it's worth, he was an atheist, the only one in my circle of relatives as far as I know.  When he was dying of cancer, a minister came to the house, probably at the request of my aunt.  My uncle threw him out.  I thought that was funny, even though I was a believer.  It was so "Uncle Harry".  He never took shit from anyone.