I’m reposting THE LUCKY TAX with a little amendment:
If you question the wealth of the rich, folks will often say that they got there through “hard work.” Probably true.
But they are also lucky.
They might be lucky enough to be 6’8″ tall and athletic.
Lucky to interested in software programming instead of the craft of buggy whip manufacturing.
Blessed with smart caring parents instead of abusive slobs.
Or maybe they guessed right in the casino of the stock market.
Or maybe they have a high IQ.
Mainly it is being in the right place at the right time with the right ability (and I’m proposing that abilities are fundamentally based in luck).
Let’s check out the remuneration for simple “hard work.” The national minimum wage is $7.25 per hour. Let’s say minimum wage workers don’t work very hard (which of course we know is untrue, but for the sake of the argument).
Let’s say our rich person works a hundred times as hard (not possible, but for the argument). So they should make $725 per hour.
Now the minimum wage worker is working 40 hours per week (but may need more than one job to survive—“…roughly one-third of the estimated 20,000 homeless people in Santa Clara County [the heart of Silicon Valley] had full-time jobs.” Richard Florida).
However the rich person works really hard, twice as long: 80 hours per week. 80 hours x $725 per hour = $58,000 per week for that extra hard, extra long work.
52 weeks x $58,000 = $3,016,000.
So, with this calculation, if one makes more than $3,016,000 per year it can’t be just through hard work — it is a result of luck.
Proposal: Any income above that point should be subject to a special “Lucky Tax” because it wasn’t gained through hard work, but through luck.
I am not begrudging luck, just saying that if we value hard work more we should tax it less — and tax luck more.
Amendment: So of course it is impossible for one person to work 100 times as hard as another, so if we say they work just 50 times harder the Lucky Tax would be levied at $1,508,000. Someone who makes $1,000,000 per year, needs to work 33 times as hard (and 80 hours per week) to earn the million just through hard work.
So when President Obama suggests raising taxes by closing loopholes for “millionaire and billionaires,” he’s supporting the Lucky Tax.