How do the Rich/Wealthy keep getting Rich you know the sayin

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mikecartwright
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28 Aug 2011, 3:47 pm

How do the Rich/Wealthy keep getting Rich you know the saying the Rich get Richer my question is how do the Rich stay Rich if they are paying themselves less to avoid higher taxes ?

Raising Taxes Is Good for the Economy

by Adam Eran –

Observes Beinhart: “With high taxes, the only way to retain the bulk of the wealth created by a business is by reinvesting it in the business — in plants, equipment, staff, research and development, new products and all the rest.

http://www.laprogressive.com/politic...or-the-economy

Thom Hartmann: But it seemed, just common sense. I remember back in the ‘80s, I owned a business, International Wholesale Travel in Atlanta, Georgia. That business has, since we sold it done over 200 billion dollars in business. And there was a year when we were doing really, really well and I could either write a big check to myself or not. And I decided not to, because I didn’t want to pay the increased taxes. I put it back into the business. How can cutting taxes on rich people, on high income people, do anything other than encourage them to take the money out of their companies, out of their businesses, and buy fancy paintings or yachts or put it in Swiss bank accounts? How conceivably could that help the economy?

http://www.thomhartmann.com/blog/201...ate-jobsreally

If we didn't really need the money, that was an incentive to keep it in the company and to find ways to spend it that took it out of the taxable profit column but increased the value of the company.
High taxes create an incentive to reinvest profits into long-term growth.
With high taxes, the only way to retain the bulk of the wealth created by a business is by reinvesting it in the business -- in plants, equipment, staff, research and development, new products and all the rest.

http://www.alternet.org/economy/106979/



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28 Aug 2011, 4:25 pm

Isn't it a big assumption that this will lead to reinvestment that is actually productive?

What about the CEO with the insanely extravagant office? Or the private jets? Sure instead of paying taxes on their income they just splurge on their business' account. Oh hey lets have our company Christmas party in Vegas. Isn't this one of the classic ways people use their businesses as a tax shelter?

Anyway I'm not a fan of the Government controlling sectors of the economy through the Tax Code.



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28 Aug 2011, 9:56 pm

mikecartwright wrote:
How do the Rich/Wealthy keep getting Rich you know the saying the Rich get Richer my question is how do the Rich stay Rich if they are paying themselves less to avoid higher taxes ?

2 phrases:
1) "Tax deductible".
2) "Offshore tax shelter".

In short, rich people tend to either get rich or stay rich through tough times by being exceptionally good with their money management and knowing how to work and predict the state of the economy.

For example:
Rappers get rich and could be set for life if they made made better financial choices, but they tend to go flat broke sending money on drugs, bling, and defense attorneys. The Hilton and Kardashian sisters come from extremely rich families and made some money on their own, but they frequently piss twice as much money away in a day as the average American makes in a year (and that's not even during a vacation), and sooner or later the public is gong to figure out they are all retards with no marketable talent or job skills and when that happens they will have to go back to their relatives with their hands out. Brittney Spears made a huge pile in a hurry, but she's certified nuts and would have been out on the street if a judge didn't give all authority over her finances to a third party. Having piles of money and making even more by the truckload is useless if you don't know how to manage it.

Bill Gates came from a very well off family too. He took a calculated risk (understanding he could lose everything) investing in a tiny software company being started in a garage during a recession, but he had the savant skills to know the market better than a lot of other tech firms and knew how to balance his checkbook.


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28 Aug 2011, 10:10 pm

Would higher taxes have helped to start Microsoft?



xenon13
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28 Aug 2011, 11:20 pm

Microsoft was founded during a higher tax time.



VIDEODROME
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28 Aug 2011, 11:38 pm

But did it help?



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29 Aug 2011, 12:05 am

VIDEODROME wrote:
But did it help?

No. Higher taxes are harder on private enterprise unless you are in a subsidized industry.


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29 Aug 2011, 12:12 am

John_Browning wrote:
mikecartwright wrote:
How do the Rich/Wealthy keep getting Rich you know the saying the Rich get Richer my question is how do the Rich stay Rich if they are paying themselves less to avoid higher taxes ?

2 phrases:
1) "Tax deductible".
2) "Offshore tax shelter".

In short, rich people tend to either get rich or stay rich through tough times by being exceptionally good with their money management and knowing how to work and predict the state of the economy.

For example:
Rappers get rich and could be set for life if they made made better financial choices, but they tend to go flat broke sending money on drugs, bling, and defense attorneys. The Hilton and Kardashian sisters come from extremely rich families and made some money on their own, but they frequently piss twice as much money away in a day as the average American makes in a year (and that's not even during a vacation), and sooner or later the public is gong to figure out they are all retards with no marketable talent or job skills and when that happens they will have to go back to their relatives with their hands out. Brittney Spears made a huge pile in a hurry, but she's certified nuts and would have been out on the street if a judge didn't give all authority over her finances to a third party. Having piles of money and making even more by the truckload is useless if you don't know how to manage it.

Bill Gates came from a very well off family too. He took a calculated risk (understanding he could lose everything) investing in a tiny software company being started in a garage during a recession, but he had the savant skills to know the market better than a lot of other tech firms and knew how to balance his checkbook.
Exactly. Whether people think the rich get rich through hard work or knowing the right people is debatable, but one thing that is for certain is that to remain rich you must know how to manage your money. It's the reason 80% of lottery winners piss it all away within 5 years.

Those who usually become rich quick and have either never known prosperity or have known nothing but prosperity are two sides of the same coin. You give either of them too much money and they will eventually piss it all away through a false sense of security. Knowing nothing but prosperity shelters you from hardship and tends to make you lay down at the first sign of adversity due to having a sense of entitlement and no sense of responsibility. Being brought up in a culture of poverty is maladaptive to any other environment since the only sense of responsibility would be your own survival at a given moment. It results in a short sighted way of thinking. This is a perfect example of it:

Quote:
"I'm the most irresponsible person in the world. The reason I'm like that is because, at 21, you all gave me $50 or $100 million, and I didn't know what to do. I'm from the ghetto. I don't know how to act. One day I'm in a dope house robbing somebody. The next thing I know, 'You're the heavyweight champion of the world.' ... Who am I? What am I? I don't even know who I am. I'm just a dumb child. I'm being abused. I'm being robbed by lawyers. I think I have more money than I do. I'm just a dumb pugnacious fool. I'm just a fool who thinks I'm someone. And you tell me I should be responsible?"
-Mike Tyson



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29 Aug 2011, 12:21 am

Wouldn't pissing the money away be seen as a redistribution of sorts, since the money didn't evaporate but got spent someplace? I'd rather see the money go back into the private sector through excessive spending than go to the state through greater taxation, just my $.02


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29 Aug 2011, 12:40 am

Uncle Sam sure can use a few more bombers

that would really get the economy moving

/sarcasm



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10 Aug 2015, 9:48 am

Dox47 wrote:
Wouldn't pissing the money away be seen as a redistribution of sorts, since the money didn't evaporate but got spent someplace? I'd rather see the money go back into the private sector through excessive spending than go to the state through greater taxation, just my $.02


the whole conception is wrong but its due to selfisness of majority of people.
General idea should be that I can be rich only when other people are rich too.
People should share their wealth and ideas. Unfortunately its not possible since people are trapped in their bodies have limited understanding of world and themselves and also limited lifespan.
Maybe people should upload their limited small brains into something bigger so that they would be able to feel not only themselves but also everything what feel other people and animals and than they might behave more rationally. But problems are with problematic people such a terorists or bad individuals. Maybe these minds should be trapped somewhere but according to which rules?
Nevertheless I cant wait when singularity comes and people will have option to upload their minds to something bigger what enables them to be independent on food, sleep, emotions and other stupid relict of the oldtimes



ooOoOoOAnaOoOoOoo
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10 Aug 2015, 9:54 am

Sometimes rich people go bankrupt so it's not always rainbows and puppies.

Rich people stay rich through their capital gains. Their money makes money in other words. If they have millions of dollars and it's in accounts that draw interest, they can makes thousands or perhaps millions per month on the interest, depending on how much they have in their accounts. Then, they invest in stuff like land. Commercial real estate is supposedly a safe bet. Stock market takes a lot of time to make money on and it can be lost overnight. Usually it's a diversified portfolio put together by professionals but they have to watch out because they are a magnet for the unscrupulous who would try to weasel and finagle every red dime they got.



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10 Aug 2015, 12:11 pm

Humanoid2436 wrote:
Dox47 wrote:
Wouldn't pissing the money away be seen as a redistribution of sorts, since the money didn't evaporate but got spent someplace? I'd rather see the money go back into the private sector through excessive spending than go to the state through greater taxation, just my $.02


the whole conception is wrong but its due to selfisness of majority of people.
General idea should be that I can be rich only when other people are rich too.
People should share their wealth and ideas. Unfortunately its not possible since people are trapped in their bodies have limited understanding of world and themselves and also limited lifespan.
Maybe people should upload their limited small brains into something bigger so that they would be able to feel not only themselves but also everything what feel other people and animals and than they might behave more rationally. But problems are with problematic people such a terorists or bad individuals. Maybe these minds should be trapped somewhere but according to which rules?
Nevertheless I cant wait when singularity comes and people will have option to upload their minds to something bigger what enables them to be independent on food, sleep, emotions and other stupid relict of the oldtimes

If everyone was rich, no one would be rich due to inflation. Income redistribution will never work.


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10 Aug 2015, 1:11 pm

glebel wrote:
Humanoid2436 wrote:
Dox47 wrote:
Wouldn't pissing the money away be seen as a redistribution of sorts, since the money didn't evaporate but got spent someplace? I'd rather see the money go back into the private sector through excessive spending than go to the state through greater taxation, just my $.02


the whole conception is wrong but its due to selfisness of majority of people.
General idea should be that I can be rich only when other people are rich too.
People should share their wealth and ideas. Unfortunately its not possible since people are trapped in their bodies have limited understanding of world and themselves and also limited lifespan.
Maybe people should upload their limited small brains into something bigger so that they would be able to feel not only themselves but also everything what feel other people and animals and than they might behave more rationally. But problems are with problematic people such a terorists or bad individuals. Maybe these minds should be trapped somewhere but according to which rules?
Nevertheless I cant wait when singularity comes and people will have option to upload their minds to something bigger what enables them to be independent on food, sleep, emotions and other stupid relict of the oldtimes

If everyone was rich, no one would be rich due to inflation. Income redistribution will never work.


You have stumbled upon the crux of capitalism, my friend! Not all of us can be rich, it's simply not possible. People who believe everyone can become wealthy this way are living in a dream world because they cannot. There will be wealthy and there will be poor in a capitalistic system. It's inevitable.

Right now, in the US, there's a severe disconnect with reality. Too many people are living like they are wealthy and are entitled to wealth even though that's not the case. Too many loans are made that cannot be repaid. Too many debts are created. You know the story. It's all due to this falsification of reality. It is impossible for everyone who wants to be wealthy to do so.

Please do not mix wealth with the middle class, it isn't the same. Capitalism, under certain circumstances, does allow the creation of a middle class but pressure must be put on both government and those with wealth to help create it or it's just going to be third world poverty with pocketfuls of wealth here and there.



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11 Aug 2015, 4:43 am

Certain things are wrong set from the beginning in society and no one cares.
To see a womans nipple on TV during a day is considered as bad but watchich killing or torturing is considered as good.
In Thailand when people have lunch they put all food in the centre of table and everybody eats what he likes.
In western countries everybody has their own plate and eats whats on it.
You learn from the beginning that greed is good, that you should win over others, that you should accumulate wealth, houses, gold, oil, cash.
People think about themselves as separated entities. People dont see bigger context. They dont even try to be a part of something bigger than themselves. Even ants or bees try to cooperate more. And in the end of the day they wonder when they watch tv how many soldiers died in another useless war or why someone shot people in theatre.



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14 Aug 2015, 1:18 am

AceOfSpades wrote:
John_Browning wrote:
mikecartwright wrote:
How do the Rich/Wealthy keep getting Rich you know the saying the Rich get Richer my question is how do the Rich stay Rich if they are paying themselves less to avoid higher taxes ?

2 phrases:
1) "Tax deductible".
2) "Offshore tax shelter".

In short, rich people tend to either get rich or stay rich through tough times by being exceptionally good with their money management and knowing how to work and predict the state of the economy.

For example:
Rappers get rich and could be set for life if they made made better financial choices, but they tend to go flat broke sending money on drugs, bling, and defense attorneys. The Hilton and Kardashian sisters come from extremely rich families and made some money on their own, but they frequently piss twice as much money away in a day as the average American makes in a year (and that's not even during a vacation), and sooner or later the public is gong to figure out they are all retards with no marketable talent or job skills and when that happens they will have to go back to their relatives with their hands out. Brittney Spears made a huge pile in a hurry, but she's certified nuts and would have been out on the street if a judge didn't give all authority over her finances to a third party. Having piles of money and making even more by the truckload is useless if you don't know how to manage it.

Bill Gates came from a very well off family too. He took a calculated risk (understanding he could lose everything) investing in a tiny software company being started in a garage during a recession, but he had the savant skills to know the market better than a lot of other tech firms and knew how to balance his checkbook.
Exactly. Whether people think the rich get rich through hard work or knowing the right people is debatable, but one thing that is for certain is that to remain rich you must know how to manage your money. It's the reason 80% of lottery winners piss it all away within 5 years.

Those who usually become rich quick and have either never known prosperity or have known nothing but prosperity are two sides of the same coin. You give either of them too much money and they will eventually piss it all away through a false sense of security. Knowing nothing but prosperity shelters you from hardship and tends to make you lay down at the first sign of adversity due to having a sense of entitlement and no sense of responsibility. Being brought up in a culture of poverty is maladaptive to any other environment since the only sense of responsibility would be your own survival at a given moment. It results in a short sighted way of thinking. This is a perfect example of it:

Quote:
"I'm the most irresponsible person in the world. The reason I'm like that is because, at 21, you all gave me $50 or $100 million, and I didn't know what to do. I'm from the ghetto. I don't know how to act. One day I'm in a dope house robbing somebody. The next thing I know, 'You're the heavyweight champion of the world.' ... Who am I? What am I? I don't even know who I am. I'm just a dumb child. I'm being abused. I'm being robbed by lawyers. I think I have more money than I do. I'm just a dumb pugnacious fool. I'm just a fool who thinks I'm someone. And you tell me I should be responsible?"
-Mike Tyson



Exactly. I think it depends where you're talking about too, such as comparing American wealthy people, to the rest of the world. Other then the Uber Uber Rich, those with a billion dollars or more are likely to stay in that uber uber wealthy income bracket their entire life. But for other income brackets below them, wealth is rather fluid and people rise and fall. The overwhelming majority of millionaires don't come from millionaire homes. And unless their kids know what to do with that wealth, there's a high chance that they won't be producing as much wealth as their parents did, or fall out of the millionaire bracket entirely.


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