Ed & Kay Bejarana

I have been so busy working on my business websites that I’ve not had the time to write my thoughts here…  This means it is time to Get Political!

Is a job a right or a goal?

To listen to the politicians running Congress and the Whitehouse, you could conclude that a job is a right.  Of course, you would say, every one has a right to get a job, why not make it a goal?

If someone does not have a job, then the government seems to be taking the position that the rich owes them a paycheck.  “Those making over $250,000 a year will see their taxes increase a little.”  President Obama said that during his speech before congress last week.

The idea is the money will go towards paying health care costs for the uninsured and that sounds nobel.  Poor people with out health insurance are much more susceptible to disease and physical ailments.  Who doesn’t want to help them?  Not those in power who are suggesting we take money from the rich and give to the poor, in my humble opinion.

Taking an extra 10% in taxes from someone making $250,000+ does give the poor some money.  Using simple numbers, lets explore the idea.  If the top 2% of our nation make more than $250,000, then lets assume an average income by the upper 2% at around $500,000.  The number is probably MUCH higher.

2% of 303 million (the population of the US) equals 6 million people making an average of $500,000 a year.  That equals $3 trillion.  These 6 million people are already paying $1.35 trillion dollars in taxes, so a 10% increase in tax burden increases the government cash register by $300 billion.

Best estimate I can find for uninsured is 45 million.  I doubt the number is that high, but for our purposes we’ll accept the the number.  $300 billion divided by 45 million equals $6,667.

President Obama during his speech before congress said the uninsured will see an extra $2400 as a result of these increased taxes.  What happens to the other $4200?  That will be addressed in a future article.  For now, lets look at another approach to taking from the rich.

Not all 6 million of the top 2% own their own business, so we can not make a direct employment comparison, but lets have some fun with the idea of forcing 6 million people to give up $25,000 for the good of the country.

What if the 6 million rich folks were given a choice to either pay the extra 10% in taxes OR hire a new American employee with a minimum take home pay of $25,000 a year?  Which would the rich choose?

I believe the rich would hire a worker.  Because then the rich can turn the $31,000 ($25,000 take home plus payroll expenses) into a revenue generating operation and expand operations.

Lets assume only HALF of the 6 million rich people took the hire an employee route.  The government would have instantly created 3 million jobs and generated more than $163 billion in increased tax revenue ($13.5 billion in new employee income taxes and $150 billion in rich people taxes).  PLUS there is now $75 billion in the form of payroll checks going out to people who didn’t have a job.  That $75 billion goes to buy more milk, cars, and homes.  Now the Farmer, Manufacturer and Home Builder can buy raw materials which put other people to work…

Food for thought…Making a job a right kills productivity because the poor has less incentive to lift a finger.  Making a job a goal gets the poor to become a revenue generating resource that drives the economic engine of our country.

Ed