Bill Gross is a very rich man. He manages Pimco, the world’s largest bond fund.
As is true of most American multi-billionaires, he is a Keynesian. He believes in the economically creative power of the state. He has understood how the state affects the markets through raw power, and he has profited enormously.
In November, he wrote a long paragraph in favor of higher taxes on the rich. Because I am going to take apart his arguments one at a time, I have decided to reprint his paragraph as a whole. The reader deserves to understand the whole argument before I dissect it.
Having benefited enormously via the leveraging of capital since the beginning of my career and having shared a decreasing percentage of my income thanks to Presidents Reagan and Bush 43 via lower government taxes, I now find my intellectual leanings shifting to the plight of labor. I often tell my wife Sue it’s probably a Kennedy-esque type of phenomenon. Having gotten rich at the expense of labor, the guilt sets in and I begin to feel sorry for the less well-off, writing very public Investment Outlooks that “dis” the success that provided me the soapbox in the first place. If your immediate reaction is to nod up and down, then give yourself some points in this intellectual tête-à-tête. Still, I would ask the Scrooge McDucks of the world who so vehemently criticize what they consider to be counterproductive, even crippling taxation of the wealthy in the midst of historically high corporate profits and personal income, to consider this: Instead of approaching the tax reform argument from the standpoint of what an enormous percentage of the overall income taxes the top 1% pay, consider how much of the national income you’ve been privileged to make. In the United States, the share of total pre-tax income accruing to the top 1% has more than doubled from 10% in the 1970s to 20% today. Admit that you, and I and others in the magnificent “1%” grew up in a gilded age of credit, where those who borrowed money or charged fees on expanding financial assets had a much better chance of making it to the big tent than those who used their hands for a living. Yes I know many of you money people worked hard as did I, and you survived and prospered where others did not. A fair economic system should always allow for an opportunity to succeed. Congratulations. Smoke that cigar, enjoy that Chateau Lafite 1989. But (mostly you guys) acknowledge your good fortune at having been born in the ’40s, ’50s or ’60s, entering the male-dominated workforce 25 years later, and having had the privilege of riding a credit wave and a credit boom for the past three decades. You did not, as President Obama averred, “build that,” you did not create that wave. You rode it. And now it’s time to kick out and share some of your good fortune by paying higher taxes or reforming them to favor economic growth and labor, as opposed to corporate profits and individual gazillions. You’ll still be able to attend those charity galas and demonstrate your benevolence and philanthropic character to your admiring public. You’ll just have to write a little bit smaller check. Scrooge McDuck would complain but then he’s swimming in it, and can afford to duck paddle to a shallower end for a while. If you’re in the privileged 1%, you should be paddling right alongside and willing to support higher taxes on carried interest, and certainly capital gains readjusted to existing marginal income tax rates. Stanley Druckenmiller and Warren Buffett have recently advocated similar proposals. The era of taxing “capital” at lower rates than “labor” should now end.
Does this argument make economic sense? Only to Keynesians. Does it make moral sense? Only to people who have rewritten the commandment: “Thou shalt not steal, except by majority vote.”
1. KENNEDY RECOMMENDED A TAX CUT
He begins with a personal confession.
Having benefited enormously via the leveraging of capital since the beginning of my career and having shared a decreasing percentage of my income thanks to Presidents Reagan and Bush 43 via lower government taxes, I now find my intellectual leanings shifting to the plight of labor. I often tell my wife Sue it’s probably a Kennedy-esque type of phenomenon. Having gotten rich at the expense of labor, the guilt sets in and I begin to feel sorry for the less well-off, writing very public Investment Outlooks that “dis” the success that provided me the soapbox in the first place.
Let us discuss the crucial Kennedy-esque phenomenon. In 1963, Kennedy, in his State of the Union address, announced his commitment to the most dramatic reduction in top bracket income taxation since the Republicans came into office four decades earlier. He wanted the top rate cut from 91% to 65%. Lyndon Johnson signed the law, which cut the top rate to 70%.
The top rate had been 73% in 1921. It was reduced in a series of steps to 25% in 1925. It was pushed up to 63% by Herbert Hoover in 1932 as an anti-depression measure. It failed. The economy tanked to its low in 1933. In 1936, FDR pushed it to 79%. It peaked at 94% in 1944. It was cut to 91% in 1946, where it remained until 1964. (Http://bit.ly/TaxRatesHistory)
(For the rest of the article, click the link.)
Here is a link to a page on the United States Department of the Treasury, Financial Management Service website on "Gifts to the United States Government. Anyone claiming their taxes are too low is welcome to send a check. Until I see the SERIES of checks, I believe they are BOLD FACED LIARS.
He says he feels guilty for making a ton of money,yea,right,ok,GIVE IT BACK,,yeah right ok,he is full of the stuff that makes the grass grow green
Bill is more than welcome to pay more to the government if he would like, but he should shut his mouth. Most of us that have made any kind of money have done it through hard work. We have paid our taxes, so guys like Bill wouldn't have to; or worse yet,
we paid our taxes so the government could bail out people like Bill. Bill, give all your money to government to assuage your guilt; but leave the rest of us alone. We don't want to pay more taxes, we pay enough already. We're tired of people like you and Buffett telling us that we should pay more. Nope, we've paid enough; all they do is waste it anyway. It has nothing to do with giving back to the worker, it has everything to do with propping up the failed welfare state. Crawl in a hole Bill.
If multi-billionair thinks OUR taxes are too low, he is certainly welcome to pay as much as it takes to make him happy. But that isn't what he means. He thinks YOU aren't paying enough taxes because we still aren't begging him for anything. Liberals are always happiest when they have all your money and can control your every move.
Notice to all liberals who think taxes are too low. Just volunteer to pay what makes you happy or salves your conscience and shut up.
He is free to donate at any time. Why would even liberals want to send money to Washington for them to squander?
Amen. Obama and Jay z need to send in a check or walk over the cash. Tom Hanks for all you movie goers wants to draft Obama for a third term, I haven't seen him writing any checks to the government to volunteer money because he makes way too much. If it were up to me paying to see something he is in he would need to beg for food.
By the way have you seen all the Obama lovers trying to cover up the lies he has told about you can keep your doctor, you can keep your insurance. he has added an amendment now that he didn't say before period. If it meets the requirements. We cannot defend ourselves against the might of the government and neither can the insurance companies. I love the pre existing part and now we have people with no insurance which pretty well rules out that pre existing part. The government and the insurance companies are the ones who put restrictions on the policies oer the years and they could have changed them without destroying the health insurance.
Exactly right! Why is he still a multi-billionaire … or even a billionaire, feeling the way he does?! He should just write a nice multiple billion dollar check to the government. If I had that kind of money, I would certainly share it, but the government would be the last place I would give it.
How gross can one be? Bill Gross is more than welcomed to give more of his money; the rest of us believe we can spend our money better than the government. The more they take away the less we have to manage our own lives and household. The perfect example is the new government run health care system that will break the economy. The government is just too stupid to realize they will run out of money and not be able to help the poor that the say they need to help and they will not be able to help other countries.
Yes!!! if I has his money, I would challenge all the billionaires to fork over vast amounts of money to give to the government, I would be willing to bet there are enough filthy rich folks out there, that we would have no red ink in the government budget! and I would immediately give at least HALF of my money to do so! and then hold them all accountable from them on to keep the budget balanced!!
I just sold all PIMPCO funds in my portfolios. In the way back machine, I used to respect Mr. Gross. NO MORE. You stooped to the extortion shake-down of the Liar and Thief administration. YOU SIR, are an effen' COWARD!
There is nothing to prefent this moron from giving more of his money to the Government. I think his kind should have their own tax law that says that they are to be taxed 99% of their gross worth every year. Then maybe they woudl shut tup.
Bill Gross is simply reading a page right out of the Democrat play book. RULE number 1: It's always easier to spend someone else's money. RULE number 2: Money from "other" people can always be obtained by legalized theft.
Mr. North is completely correct in his assertions. An even deeper evalution of Gross would be to understand that there is a big difference between the Wall Street wealthy and the Main Street wealthy. For some time, and especially under the Obama watch, the Wall Street money changers have flourished with their leveraging tactics and generous help from the Federal Reserve (money printers). Frankly I don't blame Gross from feeling guilty. On the other hand there should be no guilt from those that gained wealth from actually creating services and products that people wanted and created jobs without the help and support of the federal government.
There are two different kinds of wealth in this country, Buffet's kind of wealth and earned wealth, and we should always recognize the difference when we start talking about taxes. I would be happy for Buffet to set himself up at a 90% tax rate. It would help fund the government and relieve him of his gulit anxiety at the same time.
Mr. Gross: Feel free to send me a check for $1,000,000 tax free, of course. It won't be tax deductible, of course, but it might make you feel better. I'm sure your researchers can locate my address. Denver Kitty
Most of these mutual funds, index traders, day traders, 12 large banks, and connected individuals who donate and buy the presidency have a license to steal! George Soros, Jeff Immelt, Warren buffett, goldman sachs, bill gross, the foriegn exchanges, well all the exchanges, Presidents often appoint out of these firms especially goldman, it is payback and the opportunity to continue the theivery and larceny so prevalent in this priviledged group. Oh yes, the presidency occupier is also rewarded handsomely! Not one thought is given to country, all efforts are on the manipulation of markets, and theivery. I'll bet you thought it was an honest market and economy! Ah, probably not!
He can absolve his guilt by checking the box on the tax form and contribute whatever amount he feel is necessary to make him feel better.
How does someone ignorant enough to think his making money hurts labor get to be a multi-millionaire?
You took the words out of my mouth! He is right though, taxes are too low for the sycophant billionaires that have amassed their fortunes and don't want anyone else to threaten them, thet have theirs as long as they play ball with the new Hitler and that is what is happening with the high tech leftist billionaires! Fascism is alive and triving and to you mentally disordered liberals, it is coming from the left, not the right as you had thought -A-holes! A revolution is the solution!
Bill Gross, Before we go any farther try to make these words into a sentence HARE, HUNTER, FIELD.
If all the Billionaires feel our taxes are too low, why is it they never give 75% of their wealth to the government as a gift?
It's because they all are full of that Brown stuff to say it politely. The reality is that by saying our taxes are too low they know
if taxes go up they will still pay lower taxes because they have the write offs. So the only ones that will pay more are those who
can't afford to, the so called MIDDLE CLASS…
These people get deluded after awhile. The fringe as they call it, the top and bottom of both ends of a spectrum. All the same, the fringe. Both represent delusion.
Why then doesn’t he and Warren Buffoon donate 90% of their wealth back to government as a show of good faith?
You don’t need an explanation or economic theory from you, JUST DO IT BULL GATES! Yeah, then we can really believe you!
Anyone making comments like Mr. Gross should be held to their word. Pay up Mr. Gross and Mr. Buffet! We the people take you on your word or are you a Democrat that your word means nothing?
If he feels he doesn't pay enough in taxes, he should figure out what he thinks he should pay the government and donate that money to private charities and organizations who can manage the money to do 1000% of what the government can do, faster and cheaper. Look around, there are hundreds of volunteer organizations who can use the help. A "gift" to the US government does nothing to help people who need help, it only gives government agencies more money to waste.
I cannot imagine anything more asinine than this remark. He can pay more taxes right now. He can refile his last 5 years taxes using form 1040-EZ, and not take any deductions. This comment of Gross is no different from the story about the Cajuns riding in the back of a pickup truck who drowned when the truck accidentally went into the sawp. The drowned because they couldn't get the tailgate down to get out.
Dr. North proposes a 1 sentence law as the solution, "The Federal Reserve Act of 1913 is hereby repealed, along with all succeeding enabling legislation." That's just a start. 2 Constitutional Amendments to go with it. Amendment 28: The Sixteenth Amendment to the United States Constitution is hereby repealed, along with all enabling legislation and regulations. (Income Tax). Amendment 29: The Seventeenth Amendment to the United States Constitution is hereby repealed. (Popular election of United States Senators, return it to the state legislators. The Founders had it right to begin with.)
Bill Gross is more than welcome to pay my taxes and give me a TAX FREE stipend along with it….anytime Billy, let's start today….
I wonder what kind of benefit Bill Gross will be rewarded with for putting out left-wing propaganda?
You insulted fertilizer.
Inheritance is one possibility. I actually have no idea how this guy got his money. He CLAIMS he got it owning businesses, but maybe he inherited them.
I still thing this is an insult to 'brown stuff'.
If they want to give more to the government, I have already posted a link to the address provided by the Department of the Treasury. If he gave1% of his wealth, it would be more than my lifetime income to date.
Better yet, send a check the the address provided at http://www.fms.treas.gov/faq/moretopics_gifts.htm…
No need to bother amending tax returns.
Sounds good to me. Can I suggest amendment 30: Congress shall make no law without READING the full text on the floor of each house no more than 24 hours before the vote?
Dear Mr. Gross
Would you consider paying $4.3 billion to the Vietnam government? This is the agreed amount of money between Vietnam and Nixon and Kissinger to be paid to release all of the POW/MIA. 591 from the Hanoi Hilton were released in good faith. The money has never been paid and there are thousands of men left behind.
This would be put your conscience at peace and would bring home the soldiers left behind by the government.
So you and all your hollyweird buddies just need to pony up and write a bloody check and quit your (b)itching!
Tell you what Mr. Gross: Sit down at your desk and sign a blank check to the idiots in the US Government. Stop your bitching and either act on what you are "complaining" about or shut the fk up.