California Conservative

That’s what you always hear from liberals, right?

Well, what do “poor” (not middle-class, but really poor) people do for the world? For the economy?

Let’s not get emotional. It’s a serious question. If an athlete is under-performing, he/she will get criticized for their deficiencies. Publicly. Maybe even get cut from the team. So, in the sport of life, what about the poor?

They don’t advance society. They don’t create jobs. They don’t invest. And they don’t pay taxes.

We support them because it’s humanitarian. (Some might argue that it promotes the problem, but that’s another story)

So, what about those damn rich people?

Let’s consider California. The S.F. Chronicle recently reports: “Drop in insider stock sales could pinch tax coffers”

Ohh really?

If they live in California, they are usually in the state’s top individual tax bracket of 10.3 percent, including the 1 percent mental health surcharge on income exceeding $1 million.

There is no state tax break on long-term capital gains. They are taxed like ordinary income.
. . .

For tax year 2005, Californians paid an estimated $12.8 billion in state tax on $142 billion in capital-gain and stock-option income — both up about 30 percent from 2004.

This includes capital gains on real estate sales.

Finance experts are estimating a more modest 10 percent increase in capital-gain and stock-option income for 2006.
. . .

Thanks to the strong stock market — the Standard & Poor’s 500 index climbed 12 percent, excluding dividends, in 2006 compared with 3 percent in 2005 — many Californians will be paying more in capital gains tax for 2006.

That should help offset fewer sales by corporate bigwigs, Williams says.

Google co-founders Sergey Brin and Larry Page sold a total of $1.4 billion in Google stock last year, compared with $3.6 billion in 2005.

For those of you following along, that means “thanks to” us, middle-class investors, we’ll be paying more so that our state can squander more. There’s more of us, so that’s why we “offset” what the state can’t screw out of the wealthy.

Now, here’s a simple principle that everyone understands: If something costs less, than people buy/do more if it, right?

With lower capital gains tax, ultra-wealthy investors (even liberals like Brin and Page) will sell more stock, instead of avoiding it due to taxation. Less taxes and more sales, equals more revenues than no sales.

What else? The rich give back to society.

For example, the S.F. Business Times reports:

Jerry Yang, co-founder of Yahoo Inc., and his wife will donate $75 million to Stanford University, according to reports Friday.

The Associated Press reported that Stanford plans to spend $50 million of the donation on a new environmental studies center it hopes to finish by December, and $5 million on a 120,000-square-foot center for training doctors. It hasn’t decided yet how to spend the rest.

And Yang is far from alone. After all, tax season must be fast-approaching. According to yesterday’s Newsmax:

A record 21 Americans each gave at least $100 million to charitable causes last year, in what amounted to a banner year for universities, medical centers, arts groups and other organizations that depend on charitable giving, the publication reported.
. . .

Buffett’s $36.1 billion check to the Bill & Melinda Gates Foundation dwarfed other donations as the Berkshire Hathaway CEO began to give away his sizable fortune.

$100 million. Each. And why do they have so much? Because either they or their families created something of value.

The second-richest man in the world - after Gates - gave away a total of $43.5 billion last year.
. . .

Other wealthy Americans stepped up to the plate with $7 billion in commitments, according to the publication, up from $4.3 billion in 2005.

Because capitalism provides the opportunity and incentive to build wealth, we, as a nation, are the beneficiaries of the affluent. Their taxes and charitable donations fuel our growth.

Much of the largess came from California-based donors.

Former financial executives Herbert and Marion Sandler donated $1.3 billion to their foundation, which supports medical research.

Bernard Osher, Marion Sandler’s brother, and his wife gave $723 million for academic scholarships and the performing arts.

Osher and the Sandlers are former executives of Golden West Financial Corp., an Oakland savings-and-loan that merged with Wachovia Corp. in October.

Instead of complaining, perhaps the envious and those critical of tax breaks should sometimes thank “the rich”.

Especially since, very often, their money is funding the primary areas of future liberal activism: academia and performing arts — all the way to Hollywood.

This entry was posted on Saturday, February 17th, 2007 at 11:14 am and is filed under California, Capitalism, Culture, Economy, Liberals, Op-Ed. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.