Photo: Flickr / Joi
Venture capitalist Mike Arrington has been ranting about some of the stupidities and unfairness of our tax code, and the absurd double-standards and inconsistencies of our political parties.And I agree with almost every word that he says.
For example, I agree that:
- The “carried interest” tax exemption for private-equity and other fund managers is one of the most outrageous loopholes in the entire tax code and should be eliminated immediately
- It’s a problem that the top 1% of the wage earners in the country pay 37% of the federal income taxes (especially while earning only 17% of the national income)
- There’s an important distinction between the “super-rich,” who make hundreds of millions of dollars a year (usually through asset ownership and/or) and the rich who get paid anywhere between, say, a couple-hundred grand to a couple of million dollars a year–and the tax code should take this into account (namely, we should have marginal rates that apply to incomes that are far higher than the current $369,000 top bracket–we should have rates that apply to incomes of $1 million, $2 million, $5 million, $10 million, etc.)
- Inflation is the silent, deadly killer–one that quietly destroys fortunes in a matter of decades
- I share Mike Arrington’s outrage that, to vote for a “fiscal conservative,” I also have to support the huge-oppressive-government philosophy of Republican Religious Aggressives who want to force me to disapprove of gay marriage or deprive women (and men) of the right to choose. How those two things ever got linked is a mystery–and a deeply frustrating one. The latter social views are the polar opposite of “conservatism” (small government, more freedom). They’re anti-freedom.
But I do have to quibble with Mr. Arrington on one point.
Mike, based on some news reports of the past few years, you are not “sort of rich.”
You are RICH.
According to news reports, you owned the vast majority of the awesome company (TechCrunch) that you founded and built and that you sold to AOL for ~$30 million. That suggests you pocketed something like $20 million. And $20 million, I feel the need to say, makes you “rich.”
Now, $20 million certainly isn’t enough to make you feel rich in the company you keep, in which billionaires are common and centi-millionaires and deca-millionaires are almost literally a dime a dozen. Those folks can all write personal checks for private jets and islands and million-dollar parties and stuff, and in that company, $20 million undoubtedly feels like couch change. (Because, in that company, it is couch change.)
But relative to the rest of the world?
The average American household takes in about $50,000 a year.
The top 5% of American households make between $150,000 and $350,000 a year.
The top 1% of American householders make more than $350,000 a year.
Your $20 million, if stashed in super-safe Treasury bonds earning only 2% a year (a terrible rate of interest, one that will almost certainly go up), will throw off $400,000 a year. So, even if we ignore the value of your assets (cash), you can be comfortably in the 1% of American households by doing nothing more than breathing.
Americans, moreover, are VASTLY richer than the rest of the world.
The average salary worldwide (in 2007) was $7,000.
And billions upon billions of people survive on a few dollars a day.
So, please keep ranting about our absurd tax code and hypocritical, inconsistent political parties, Mike. They both need all the help they can get.
But, dude, just accept it: You’re rich! And the fact that you made that money by building something excellent is really cool. So enjoy it…
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