If you watched the State of the Union (SOTU) speech Tuesday night, you no doubt heard Obama talk about his desire for income equality. The idea that we should “spread the wealth around” is Obamas’ and many on the progressive left’s idea of fair. Why should all those rich people have so much, when so many, have so little, in America?
Forbes puts out an annual 400 list of Americas wealthiest citizens, and in 2013, those Americans accounted for over 13 trillion, 494 billion, 350 million dollars. When you take into account that our nation’s population was measured at 300 million in the latest census, it’s interesting to find out how those trillions of dollars would be equally distributed among individuals. For instance if you take the top 10 richest people in America, their wealth comes to about $410 billion 500 million dollars. Now, if you divide that equally among all 300 million US citizens, each person would get a check for $136.83. Of course, this would mean that the top 10 Billionaires would now be broke, and their companies, philanthropy, and investments would be erased forever.
The top three richest people in America are Bill Gates, worth $72 billion, Warren Buffet with an estimated $58.5 billion, and Larry Ellison with $41 billion in accumulated wealth. Bill Gates is the founder of Microsoft; Warren Buffett is the head of Berkshire Hathaway, and Larry Ellison is the CEO of Oracle, Inc. Microsoft employs 59,197 Americans and 100,932 people worldwide, while Berkshire Hathaway employs 260,519 people, and Oracle employs 9682 Americans. So, if we take all of their money and give each American $136.83 we must also give out a great deal of pink slips because many of America’s jobs evaporate with only the top 10 richest people being stripped of their wealth.
Now, if we take Obama’s Robin Hood scenario a few steps further and look at the total wealth of all of the billionaires on Forbes 400 list, we have again 13 trillion, 494 billion, and 350 million dollars. (This would fall short of covering our nation’s current debt by the way) When we divide this money equally among the 300 million Americans, the sum comes to $44, 981.17. When compared to the national average wage earned in America this amount is surprisingly close, the average salary in 2012 was $44, 321.67.
So, we could take ALL the wealth of the 400 richest Americans and each get a one-time check for roughly what we currently average annually in salary or wages. Sounds pretty good until you understand that it is a one-time offer that can never be duplicated, and that will mean most likely the next year you get nothing. How do I come to that conclusion you ask? Well, it’s simple economics.
You see, the top 400 richest Americans do the vast majority of the investments that then account for the creation of jobs and new markets. These new markets then spawn or encourage small businesses to join the field and hire employees to support their company. These small businesses could not stay open if the large corporations and investors found in the top 400 richest Americans, suddenly no longer had capital or companies to produce, because they were forced to give it away equitably to all other Americans.
It is also worth mentioning that the millions and even billions of dollars that these same individuals donate to various charities and organizations would cease all at once. Which in turn would cause widespread upheaval as poor organizations, individuals, and nations dependent on this aid suddenly had no benefits coming in to support them. Neighborhoods that were poor would have their one-time checks of $44,321.67 so they might survive for a year, maybe even two. However, given how people who suddenly become millionaires fare with their money, it is doubtful individuals would have much to show for their ill-gotten gains after all the 50 inch flat screen TV’s were installed or the new luxury cars were parked in their driveway. The National Endowment of Financial Education estimated that 70% of Americans who have a sudden windfall of money are broke in a few short years.
Obviously men like Bill Gates, Warren Buffett, and Larry Ellison are invested in a diverse portfolio. These men would likely know how to take their $44,321.67 and quickly turn it into more money. After all, they were all men who came from moderate beginnings and used their intellect, ingenuity, and inventions to quickly rise to the top of their prospective fields. These are men trained in financial matters, unlike the 70 plus percent of Americans today. So, it would be only a matter of time before they would accumulate more wealth than the rest of Americans. (Probably by investing in 50 inch flat screen TVs and luxury cars for starters).
This would mean that while the richest Americans would quickly be regaining their wealth, the poorest of Americans would be sitting at home with nothing to eat, no form of employment, and a 50 inch TV they could no longer enjoy because their power service had been cut for failure to pay the bill. So, yes…Obamas’ plan to spread the wealth around sounds good on the surface…just on the surface. Once you peel back the top layer and look at what is underneath you quickly begin to realize that redistribution as Obama and progressives suggest is simply robbing the hood of their dignity, to feed the rich and their appetite to be seen as caring.
Do you honestly think the people in Hollywood who champion income redistribution would ever offer to be equally poor with the rest of America? If people like Tom Cruise, Ben Affleck, Matt Damon, Michael Moore, or Sean Penn (among a host of others) are so certain that income redistribution was the fairest thing to do, then why don’t they tell the producers of their next movie that they will only act in the movie (or direct) if everyone gets paid the same! You know…the camera man, the stunt doubles, and the entire crew…same wages. They could even go one step further and declare that the amount of money made by their film should be reduced by making the price of tickets income friendly…you know, pay only your fair share of the price of admission.
Yes, it’s laughable but let’s carry this lesson on to the next group of would-be income distribution failures: our good friends from the Grammy’s and all those singers who make millions on their record albums. Hey, Jay Z and Beyoncé why don’t you two set the first example? You two are such good friends of President Obama and the First Lady; you love to be told you are first so why don’t you go first with equally distributing your wealth. Give each person who works on your album the same salary you take for yourselves. Then reduce the price of your albums so that other Americans could buy them at a “fair” price, based on their income. So, for instance, a person on welfare who has no income could just have your album for free! Also, Beyoncé, I see that one of your records sold 1.3 million in the first 17 days. You will need to produce a lot more albums to keep up with demand once you institute the “fair price plan” because there are currently 12,800,000 people on welfare in the United States. Your record production company is going to have to step up the production of those albums. This might also mean you, Jay Z, and Blue Ivy may have to take fewer vacations to places (like Cuba) and start checking out the campsites on the KOA webpage.
Please–go first, and I’m sure the rest of America will follow along right behind you. We’ll make the same promise with the same guarantees that Obama made when he said, “If you like your insurance you can keep your insurance.” You still trust Obama, so trust America and lead by example.