As one of the top 10% of earners in this country I want to let you know how taxing those that that you consider rich, will negatively impact the middle class more than it will hurt the rich.
Because it seems to have become popular to vilify the rich I want you to know what some of the rich do with their money and how it affects the middle class.
Last year, I paid hundreds of thousands of dollars in income taxes and over $600,000 in property taxes. Just the property taxes funded schools, roads, bridges, hospitals, police, fire departments, military, and other projects that benefit all of us equally.
And I do the same thing with my money that the middle class does with theirs, just more. I spend some, waste some, try to save some, invest some, and I use the rest to expand my business. Just like you, I pay bills, make house payments, buy groceries, movie tickets, go to dinner, and etc. Surpluses after taxes allow me to bring on new products, finance new ideas, make new investments, and hire new people. Expansion always requires new people creating more jobs. This surplus after taxes allows me to pay out bonuses, provide health insurance for staff, give paid vacations, and allows me as an executive to make future decisions that support the company in expanding.
And yes, hopefully this will create more financial security, which results in more purchases, new investments and more spending, which creates more jobs and more opportunities for others.
In 2007, I personally paid interest to banks on over 50,000,000 dollars in loans that amounted to over 3.5 million dollars in interest charges and fees to banks. This income then allows the banks to have more money to others so that when you want a personal loan, student loan or car loan you are able to get it. I paid property taxes in two different states and three different counties in excess of $600,000. These taxes accumulated by states and cities benefit every income class equally. We drive the same roads, have the same access to the same hospitals, and my kids will have the same teacher and sit at the same desk your kid does.
The house I chose to purchase requires me to pay over $90,000 a year in property taxes. This money goes to further support the people in the community with services we again equally share. I am not asking you to feel sorry for me, just know that you benefit from the successes of others. The financial decisions we all make create affects on all of us. My house requires me to hire others to take care of that investment which results in landscapers, pool maintenance, electricians, painters, woodworkers, maids, phone systems, computers, and plumbers, etc. Over the last twenty years I have I paid millions of dollars in salaries, bonuses and employee tax contributions because of my commitment to growth.
So when you say increase taxes on those that are already pay a majority of the taxes collected in this country understand that you will be affected also If a rich guy pays another $10,000 in taxes a year it isn't a big deal to him but will be a big deal to you if he elects to cut back one employee in order to make it up and you are the one.
My landscaper, Uriel, who I gave his first yard to maintain eight years ago now does most of the yards in my neighborhood. Bob, who cleans my pool depends on his job to take care of his family. My maid, Mercedes, who has worked for me for two years needs the full time job I offer her to send her daughter to school. Valdamir, my Russian driver who takes me to the LA airport for business trips depends on business people for his business to work. My personal assistant, Jen, who I wouldn't get rid of it we had a depression, just had a beautiful boy, Max, and wants me to do well because it makes her position even more secure. Eddie, the electrician, who is from the Philippines and charges me too much to fix electrical problems loves old big houses that have recurring electrical problems. My tech guy, Robert, who I just hired to manage my internet activities was out of work when I brought him on.
This is not a trickle down argument but basic economics, as it is impossible to penalize any one group without affecting every person in the group.
Who Pays Income Taxes?
In the year 2006 the top 10% earners paid 70.79% of all the income taxes in this country while the bottom 50% of all earners paid only 2.99%
Note: AGI is Adjusted Gross IncomeSource: Internal Revenue Service
What these facts don't show you is how the wealthiest generated jobs, funded charities, and how their success funded roads, hospitals and more.
Trust me, the rich do not really care how you want to play the game as they will make up the difference regardless of the rules. They will either increase their levels of production to create more wealth, tighten up their spending or a little of both.
Vilify the rich if you choose to but a tax increase on the them will ultimately hurt the middle class more than it will hurt them!
Grant Cardone, Author and CEO