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Rich, Poor, Taxation, and Paris Hilton

Taxing the upper class is one of those ideological, liberal clichés that never really works. The upper class are responsible for providing opportunity, stability, and reasonable dynamics to the economy which would not otherwise be achieved. Money needs to be spent to make it, this is the greatest provision of the rich, they invest their capitol because they want more of it. They want to stay rich.

Providing jobs and capitol and creativity to the business world is what the rich are about, that is why they are rich. There are people like Paris Hilton and Michael Jackson who are now a laughing stock because of their perverse wealth; however, they are rich because of the lower and middle classes. Let me explain.

The Hilton family owns hotels. Paris scrapes the creme of the top, but, the Hilton family provides jobs and an excellent dynamic to the hotel industry. Something to emulate, something to surpass. This raises the standards because now, even lower classes can often afford to stay at the Hilton which has, through the Hilton families ingenuity, forced crappy businesses, like Motel 6, to step up their game.

The rich, or in this case the Hiltons, are a reason we have better hotels and so many of the lower and middle classes have jobs in the hospitality market that allow them to step up from rags. Paris is a loser, we all know that, she unfortunately gets to reap the rewards of her family’s hard work. But, that is their cross, so to speak.

Michael Jackson is rich because of the lower class as well. He was lower class at some point, he appealed to the irreligious lobe of the social brain through his post-gospel music, his swinging and jiving. This was the Jackson 5 shtick. The people bought it, funding his success. Same with the Beetles, from which Jackson, for quite a while, literally reaped the benefits.

Getting back to the investing rich… Not all rich are like Michael Jackson and Paris Hilton. Most of them we have never heard of, will never know. Many of them invest in companies, anonymously contributing to a conglomerate success which, in turn, necessitates a bottom line. The rich only invest to maintain a reasonably profit margin. When taxes are raised, expenses are likewise raised. This raises the cost of production (service, distribution, product) while shrinking the profit margin they so disparately need in order to stay wealthy.

To put it simply, if 10 loafs of bread costs $1.00, for all 10 to be made, then sold for $3.00 each this creates an income of (10x3-10) $20.00 revenue per every ten loafs. If the cost goes up to $1.50 for the same ten loafs this will impact the revenue of the company. When looking at 10 loafs, it does not seem like much, it is a .50 cent loss. Likewise, when a company is making thousands of loafs a day, a small increase in expense will ultimately impact the business to the tune of tens of thousands of dollars a year. Artificially, through higher taxes, the cost of living goes up because it will not be just bread, it will be everything involved in the cost of living; gas, water, meat, coffee, toothpaste, etc.

Adversely, lowering taxes for the middle class in only a compensation for the harm done to the upper class trough tax hikes. This strategy obviously will not impact revenue as much as it will cost.

The best case scenario, the status quo will be maintained; the most likely scenario is the cost of living goes up. This is what Obama has promised to do: raise taxes for the rich, lower it for the middle class. What this translates to, the middle and lower class quickly become one class and the leap from burlap to cashmere will be wide and virtually insurmountable. What needs be done-what makes the most sense-is lower taxes for everyone, working toward eliminating the income tax all together. This will naturally lower the cost of living, increase productivity, open the job market, buttress the stock-market while raising the standard of living for the nation simply because cost will decrease while profit margin goes up. The dollar conversely goes further.

What lowering taxes won't do is help the banks. They depend on poverty; alas, that is a different subject.

Comments

fcukit said…
Now you are talking......the great republic dream! Lower taxes for everyone and reap the benefits on every level of class. Drilling on the shelf....that is another story. Vote Paris Hilton 08!

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