Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Six Reasons We Need the Rich


You might even want to thank them.

Novelist F. Scott Fitzgerald, best known for chronicling the rich in The Great Gatsby, supposedly said to Ernest Hemingway, "The rich are different than you and me."

To which Hemingway reportedly quipped, "Yes, they have more money."

That's a good line, but it overlooks the role top earners play as economic activists in the nation's economy. It's easy to attack Wall Street bonuses and fat executive compensation packages, but it's hard to deny that the rich are driving employment and funding the next round of innovation.

So, other than a novelist in search of a good yarn, who needs the rich? We do. Here are six reasons why:

1. They pay more taxes than the rest of us.
It turns out that Leona Helmsley was wrong when she said: "We don't pay taxes. Only the little people pay taxes." In fact, the progressive tax code means that the top 1% of US taxpayers, or those earning $410,096 or more, paid 40.4% of personal federal income taxes for the 2007 tax year, the National Taxpayers Union reports.

The tax burden falls most heavily on those who make good money: the top 5% of earners, or those with an adjusted gross income of $160,041 and above, paid 60.6% of personal income taxes and the top 10%, or those earning $113,018 and above, paid 71.2%. The bottom 50%, or those earning less than $32,879 a year, paid 2.9% of all federal income taxes.

The lesson: If the tax burden becomes so great that big earners work less or shelter more of their income, Uncle Sam will see a huge fall off in tax receipts and this will punch a bigger hole in the nation's budget deficit.

2. Smart ones create jobs. Bill Gates' estimated net worth is $57 billion, or a bit more than most of us have in our checking accounts at the moment. Even after 15,000 layoffs, Microsoft (MSFT) still employs about 90,000 and pays the staff well enough to buy homes, cars, and put their kids through school. Along the way, Gates created a new industry and changed the world, giving the casual PC user more computing power than the Apollo 11 astronauts took to the moon in 1969 -- and at a better price, too.

If you doubt the role of the rich in job creation, ask yourself a basic question: How many tenants in your ratty walk-up apartment hire people like you?

3. Generous ones share their wealth. Many of the super-rich are also the nation's top philanthropists, including Warren Buffet, Berkshire Hathaway (BRK-A); Bill and Melinda Gates, Microsoft; family of Sam Walton, Walmart (WMT); Peter Peterson, co-founder of Blackstone Group (BX); Michael Bloomberg, founder of Bloomberg News and mayor of New York; and T. Boone Pickens, a hedge fund manager best known for his oil deals.
< Previous
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Featured Videos