President Obama (The Orator in Chief) never turned down an opportunity to stand in front of a microphone.  He was fond of demonizing evil millionaires and billionaires from behind a podium.  He seemed to believe that rather than building businesses and creating jobs these people sat home twirling their evil mustaches and conjuring ways to screw the little guy.

 

 

 

 

 

 

 

 

Nice narrative.  Utter BS.

His protégé President Biden (Healer Joe) vowed in his acceptance speech to fight just as hard for everyone who voted against him as those who voted for him and not to demonize anyone.  He’s already broken that promise with proposals to tax the aforementioned evil millionaires and billionaires.

Have a strong income?  Your income taxes are going up.  Live within your means and let the power of compound investing work for you?  Here comes a wealth tax.  Planning to die at some point?  The estate tax exemption is going down.

Want some non-tax solutions?  Big Government has ‘em.  There are proposals to reduce/ban stock buybacks and implement a “fee” (how does that differ from a tax?) on stock market transactions.

Exactly how is any of this nonsense going to bridge the inequality gap?  There’s no evidence to suggest it will but that won’t derail the demonize and tax train.

The argument for reallocating rather than growing the pie is based upon the narrative that the rich get richer at the expense of everyone else.  Is it true?  Maybe.

The good news:

The amount of wealth held by the bottom 50% of households stands at an all-time high.  It’s up 900% (wow!) since bottoming out in 2011 following the 2008 financial crisis.

The bad news:

The amount of our country’s wealth held by the bottom 50% of households was at 3.7% in 1989.  Even after the aforementioned 900% rise the figure is down to 2%.

Who received the lion’s share of the gains?  Yup, the top 1%.

Before rushing to judgement it’s important to understand why.  The answer, of course, is stock ownership.  In general the more wealth one has the more likely the person is to be invested in the stock market.

Conversely people with lower wealth/income tend to receive their wealth gains through home ownership, wage gains and government handouts.  Nonetheless these people are participating more and more in the stock market.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Maybe the solution shouldn’t lie in demonizing the wealthy.  Maybe the solution is in incentivizing people to participate in the stock market to benefit from growing corporate profits, capital gains and dividends.  For all the recklessness and prideful/willful ignorance of the Reddit/WallStBets/GameStoppers at least they’re doing something.

So Healer Joe we’ve got some ideas for you.  Instead of demonizing success to reallocate the pie try growing the pie and encouraging success.  No need to send a check to anyone who can fog a mirror.  Better ideas could include:

  • a retirement account for every baby born
  • a government-sponsored 401(k) for anyone without access to one through an employer
  • income-based tax credits to encourage retirement savings