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What Would You Do With a Billion Dollars?

Posted: 04/05/10 02:46 PM ET

What do you think when you read that a single hedge fund manager, David Tepper, earned $4 billion last year?

At first, I found it unfathomable. And then disturbing.

The average working American earns $18.90 an hour, or less than $40,000 a year. Some 15 million Americans are currently unemployed. Nearly two billion people around the world subsist on less than $1.50 a day. More than 16,000 children die each day from causes related to hunger.

How does that make David Tepper feel? How about the next two dozen top hedge fund managers, who earned an average of about $1 billion each last year?

The most powerful article I've read in the past ten years is "What Should a Billionaire Give - and What Should You?" It was written by the philosopher Peter Singer, an Australian-born professor at Princeton, and published in the New York Times Magazine in 2006.

Singer begins by making an incredibly simple point: "If it is in our power to prevent something bad from happening, without thereby sacrificing anything of comparable moral importance, we ought, morally, to do it."

Singer first laid out his reasoning thirty-five years ago, in a scholarly article, using a hypothetical case. If you were to pass by a child who was drowning in a shallow pond, he asked, would you make an effort to save the child? For nearly all of us, the answer is plainly yes. We'd do so even if it meant muddying our clothes or being late to our next appointment, since those consequences pale next to the potential death of a child.

If that's so, Singer went on, we should feel no less compelled to save a child from certain death, even if that child lives thousands of miles away and the death is one that occurs over time, from malnutrition.

Today, Americans donate an average of 2 percent of their gross income to charitable causes. But what if the richest people gave much more away (and still kept a lot)?

If Tepper donated $3 billion, for example, he'd still have $1 billion left from last year's earnings. If the top one tenth of one percent of US taxpayers - approximately 150,000 people in all - gave away one-third of their income, they'd generate nearly half of what the UN has estimated it would take to cut in half the number of those living at the most abject level of poverty. And still be left with more than $10 million in income a year for themselves.

It's hard to imagine that any of them would be any less comfortable, or happy, or secure, as a result. How much incremental value, of any kind, does a person get by earning $10 million instead of $5 billion, or $4 billion instead of $1 billion?

Compare that to the value created by giving a significant percentage of that money to those who need it most. Literally millions of lives could be saved. And it even has benefits closer to home, in the message it would send to the rest of us.

Nearly every leader is looking for more engaged, committed, loyal employees. One good way is to set an example that inspires them.

Think about it:

Would you feel differently about working in a company in which the CEO and the most senior executives gave away a third of their earnings to help eliminate poverty? Would you feel better about your job if you knew that as a consequence of whatever work you do, fewer kids would die of malnutrition and more of them would get educated?

 

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03:31 PM on 05/04/2010
David Tepper's 4 billion and the 25 managers right below him that all made over 1 billion is indeed a sign of sickness in our society.

When one man makes the same as over 58,000 teachers (at $50,000 salary and $20,000 in benefits) at the same time that over 300,000 teachers are expected to be laid off...that is just plain old insane.
http://www.ireport.com/docs/DOC-435298

The bottom line is that since about the RAY-GUN years....when someone said that "greed is good," this country changed to being "of the money, by the money, for the money."

What can we do? If the politicians are paid off and the media is run by the corporations (in general) and Supreme Court kow tows to the corporations with a bogus free speech argument in the Citizens United decision, is there any hope?

Yes ... we need to close the hedge fund manager loophole that allows Tepper to pay only 15 percent capital gains on the $ billion instaed of the normal 35-38 percent top income tax. Urge passage of the financial reform bill...it's a start.

Then, us "normal people" need to get things changed is by joining the populist movements...(and not the corporate sponsored tea party movement which is fake radicalism for dummies) ...I mean the real ones...

I think Jim Hightower sums it all up pretty good here....

http://www.pbs.org/moyers/journal/04302010/watch2.html
08:55 AM on 04/07/2010
Take it out of the country and start exporting from up and coming markets as some American business refuse to do. . There is money to be made out there, India, China, Brazil, Etc. Why are Americans so afraid to do business with these countries? I have made it in the past with a lot less money, so I know it's possible. After that company is making a profit new markets should be explored and the same time some of that money should go to educational philanthropy. We need the cycle to continue. I find it best to nurture students and plant the seeds of success. After all that, there probably will not be much left, so that;s Mine, mine, mine! Just kidding, it's a cycle that needs to be expanded into other business and keep on growing it.
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Chuckie Corra
02:03 AM on 04/07/2010
To put in perspective wages across the country, consider the coal-mining industry in West Virginia (given the recent events its relevant)

I come from West Virginia, so I can vouch that it is a relatively poor state. The average coal-miner makes roughly $70,000 a year salary base. This is considered a very good wage (factoring out the risk). $70K is very much a livable wage in the mountain state. Now consider the risk involved. The brave miners that lost their lives were receiving wages similar to this, and are constantly facing danger every day. Not to mention the long-term effects of working in a mine (vision impairments, black lung, various breathing issues, etc.). Now, do you think they should get paid more than what they are? Up to the discretion of the reader but I certainly think so.
They certainly are working harder than some fatcat like David Tepper, and facing more risk than him clearly. Probably the biggest risk he faces is getting mobbed by angry citizens.
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02:01 AM on 04/06/2010
Gross income is not relevant to this discussion. Net disposable income is. This article needs to be either re-written. It is currently not relevant. It was Jesus who said, after a widow gave a mite to the synagogue, that most give out of their abundance, but she gave all she had.
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Tony Schwartz
Tony Schwartz is CEO of
06:00 PM on 04/06/2010
First, charitable contributions can be made before tax is computed, off gross income. Second, when we're talking about income in the billions of dollars, and maximum marginal taxes rates of 35 per cent, the point I made stands: you could give away a lot and still have huge amounts left.
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realitytrumpsbull
two 'alves of coconut!
11:15 PM on 04/05/2010
Wants vs. needs. I think the 'rich people' do a lot more to help a lot more people by striving to keep basic commodity costs low, and affordable. I don't want some billionaire somehow feeling they're morally obligated to hand me 100k or something like that, I'm not too proud to work for a living, and I don't feel entitled to anything. I think you need to support yourself in life, which means getting some basic education, and finding some kind of trade or other work which you're competent to perform, and then working on your work ethic, as well as your attitude, because no one's really entitled to anything in life, the Constitution talks about 'life, liberty, and pursuit of happiness', does not ever guarantee you 'in writing' that you'll achieve same.

Someone made 4 billion dollars? Good for them. As long as I can still afford to stay in my apartment, buy fuel and other basics off my wages, I'm generally a happy camper, and if it comes to a situation where I can't do that, then a place where I can set up a tent and a campfire/equivalent upon which to cook my dinner. I wouldn't know what to do with a million dollars as it is, and you couldn't GIVE me a limo.
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abbyrose86
11:53 PM on 04/05/2010
WOW...your comment said so much about your ethics and values, and NOT in a good way.

The Constitution is a man made construct...it IS not the "end all and be all".

YOU said, and I quote " no one's really entitled to anything in life"....so I ask you to dig a little deeper....DID YOU or anyone CHOSE to be here? I mean, was it YOUR choice to be born?

NO, it wasn't, no one made the choice to be born. That choice was made for YOU by another.

As such, IF YOU really think about it, as certain things are necessary to sustain life; those being....food, water, shelter and oxygen.... those things are indigenous to NATURE and if YOU really THINK about it...those things ARE provided by nature for the sustainability of life, BUT man (himself, through social constructs) limits the availability of most basics (other than oxygen...simply because man hasn't figured out a way to limit it's availability).

MAN creates the constructs...not nature, therefore it is simplistic and selfish to assume the basics needed to sustain basic life are limited and it comes down to nothing more than man's inhumanity to their brethren; thus man is a not a morally good creature, if man is so selfish and so self centered as to not allow the basics needed for survival to ALL and considers such to be "entitlements". I suggest, the man who thinks such is a morally reprehensible creature.
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10:55 PM on 04/05/2010
I'd buy a whole bunch of Congresscritters from goldman and morgan and stage a revolution against this oligarchy that's grown up around our heart! I'd tear down this corrupt system and send the elites scurrying to their holes in the Caribbean. I'd give this country back to the People!
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babina
10:11 PM on 04/05/2010
I have worked for wealthy individuals for most of my 35 year career as an executive personal assistant. The many that I have worked for, whether they are worth $10 million or $50 million only want more tax cuts and lower taxes on their investments so they can spend more money on themselves and their kids. Their idea of a large charity contribution is to give to the university they attended and/or the university they want their children/grandchildren to attend. They especially like to have rooms or buildings named after themselves, mostly at these universities. I'm not saying their charitable contributions are not appreciated, just that their charitable contributions do little or nothing to improve the lives of others in need and are in reality selfish contributions. Other than that, any real world changing contributions are minimal, e.g., $100 to Red Cross, I've seen contributions at $50 for the death of a friend's loved one, $100 to March of Dimes or Susan Koman, Salvation Army etc. No real meaningful contributions to charities that can alter lives for the better.

Anyone that believes wealthy people create jobs when they get tax cuts/minimal taxes on investment earnings for personal wealth is insane or stupid. My boss spends more on one dinner out with his wife than most people earn in a week. Tax cuts/lower taxes on investments only mean one thing to the wealthy: more personal spending and more money for the kids when they die.
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11:01 PM on 04/05/2010
Forget the redistribution of wealth. It's time for a redistribution of Power!
01:57 AM on 04/06/2010
When your boss goes out to dinner with his wife and spends more than most earn in a week, is he not helping those in the expensive restaurant he gave the money to. Would it be preferable if they ate at Jack in the Box and gave the rest of that money to those in the expensive restaurant as charity?

Lower taxes simply mean a greater reward for the same risk. This, due to competition, generally translates to lower prices which means those that use the services/products produced by your boss are the real beneficiaries.
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babina
11:00 AM on 04/06/2010
You completely missed the point. Higher taxes on personal wealth will not result in any alteration of their lifestyle whether its dinner out for $1,000 or a family trip to the caribbean at $50,000 not including the private. I certainly would never begrudge that success and wealth, however, they should pay a higher tax rate than the average middle class worker and they should pay higher taxes on inestments.

I was merely pointing out that the conservatives are somehow convinced that wealthy people create jobs when they get tax cuts/minimal taxes on investment earnings for personal wealth. This is simply not true. You have no evidence or facts to back up your claim.
07:55 PM on 04/05/2010
I would buy a billion lotto tickets! Oh yeah!
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UnderTheHedgeWeGo
Show me some evidence.
07:34 PM on 04/05/2010
I'd get myself a brand new double-wide!
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1murillo
Can't be neutral on a moving train - Zinn
07:10 PM on 04/05/2010
Schwartz: this is a good post. What we should do is use numerals: $1,000,000,000 is a lot of money, and it seems like more than "a billion dollars."
$1,000,000,000 per year is upwards of $2,800,000 per day. If anyone can't live - extremely luxuriously - on that amount, that person needs a basic lesson on how to balance a checkbook.
We'll have the accusations of, "Socialism!" but really, so?
I'm not proposing a way to make this happen, but tying a maximum wage to the minimum wage is merely the next step in capitalism. Billionaires can take care of themselves, they don't need poor or middle class people to stand up in the ultra-rich's defense.
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es2189
09:15 PM on 04/05/2010
Great point. The answer to the question of what to do with a billion dollars isn't "Take a nice vacation." I think it's hard for people to even fathom this kind of money, and it's probably because of this that they shy away from taxing people who make this much. These people could be living VERY lavishly if they made in a year what they currently make in a week. I think if people understood quite how extreme this is, they would be more willing to think about better ways to use these vast amounts of money.
01:29 AM on 04/07/2010
But we already have the best way. Let those that earn it decide. It may not be perfect, but it tons better than letting those willing to take it by force decide.
02:07 AM on 04/06/2010
A cap on person's wage is simply a cap on what they'll provide. Someone that makes $1B/year is getting that money from people that want the service or product. Capping that will simply cap the person's desire to work. This may seem like you're only hurting the person receiving the money, but the person giving the money is doing so for a reason.

By the way, the minimum wage was enacted (in America at least) to keep people from working (and it certainly does that). A maximum wage will just keep people from the getting the products/services they desire. How is that good?
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es2189
02:27 PM on 04/06/2010
The minimum wage was enacted to keep people from working????
05:59 PM on 04/05/2010
Charity only fills in certain gaps created by the overall system. Often the rich create these gaps, then make themselves look good by donating money to charities. Amend the system, and the need for charity diminishes.
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bighat
Truth as I see it
05:44 PM on 04/05/2010
WE give lots of money to charities. But how much of the charity reaches intended people.

How much is siphoned off by govts. How much by administrators.

How much money goes to buy weapons. How much money goes to people who are sacrificing their children like Uganda.

People like to help but they do not like the idea of being robbed. I cannot imagine making 4 billion/yr. If I did I would retire.

I do not even understand how Joseph Kennedy can justify making over 500k/yr running a non profit. Could he not get by on less to help the children?
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JScott
John Galt's last name is McGuffin-Smithee
05:17 PM on 04/05/2010
There can never be the excuse that 'there's not enough money to........(fill in the dire need here)'

There's PLENTY of money.
02:14 AM on 04/06/2010
Money isn't the issue. It's the value (of the product/service) that the money represents that's important. The wealthy person that gives away their money is fine. They provided services/products to accumulate this wealth and desire to spend it on charity. That works fine under capitalism. The issue is when that money is taken by force. What actually happens is the value behind the money is diminished and everyone is worse off.
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Tony Schwartz
Tony Schwartz is CEO of
06:02 PM on 04/06/2010
Amen
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NABNYC
05:07 PM on 04/05/2010
We should return to a progressive income tax, and 90% of this guy's earnings should be taken in taxes. This would accomplish two things. First, it would replenish our tax coffers. Second, it would discourage Wall Street and corporate insiders from continuing to loot their companies and plunder their neighbors, since so much of their earnings would just go to taxes anyway.

Charitable tax write-offs should be limited to $500/person. It is absurd to let rich people avoid taxes then set up personal charities into which they deposit money and let it sit and grow, tax free, as long as they pay out 5%/year for charitable purposes. It's just another tax con for the rich. I'd suggest we just tax the rich people, and let our society as a whole decide which charitable causes to support. Look at some of the billionaires in this country who pay next to nothing in taxes, hiding their money in their private charities, then using it to promote their businesses -- like buying their own company's brand of computers and installing them in schools in India, so Indians will grow up with that brand loyalty. It's a tax con.
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bighat
Truth as I see it
05:47 PM on 04/05/2010
No one has ever paid 90% of their income in tax. When the taxes were that high the govt did so to encourage investment into whatever project they deemed worthy of private investment.

How long would anyone with the capability of making the money in 50% bracket or above would stay in the US only to be robbed by the govt.
06:52 PM on 04/05/2010
sorry but yes - 1040 to 1963 the taxes were 80 to 90 percent on over two hundred to four hundred thousand.


They didn't leave the country because where else were they going to make that four hundred thousand. Twas a lot of money in 1963
02:19 AM on 04/06/2010
We already have a progressive income tax, but it's a scam. The tax is actually transferred to services/products provided by those paying the tax. That means it's the consumers of those products/services that are actually worse off. The only thing the "progressive" tax does is allow politicians to convince people that taxes should be raised, since they aren't paying any. Good for politicians. Bad for everyone else.
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es2189
04:49 PM on 04/05/2010
There has to be a degree of insanity in anyone who makes a billion dollars and then continues to devote his life solely to accumulating more. Of course, it probably takes a level of insanity to make that first billion, too. I guess the kind of person that make that kind of money is generally not the kind who sits around pondering world hunger.
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JScott
John Galt's last name is McGuffin-Smithee
05:19 PM on 04/05/2010
They'd rather spend it on an enclave where they would never have to encounter it.

They'd spend on a planet for themselves if they could.
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abbyrose86
11:59 PM on 04/05/2010
I would suggest we could take that further and instead of labeling it "insanity" label it sociopathic behavior.