After not too long ago listening to the feedback by Ken Langone, one of many founders of House Depot, concerning “means testing,” I assumed it might be well timed to replace my earlier electronic mail e-newsletter on “means testing” and ship it out once more.
Think about the next situation. Fred spends $100 per week on numerous unhealthy habits, by no means works any additional time and would not hesitate to make use of a cost card for quite a few impulse expenditures. John avoids expenditures for unhealthy objects, earns, on common, $150 per week in additional time pay and may be very cautious to solely purchase what he can afford. After forty years, at age 65, Fred has no financial savings. On the finish of the identical forty 12 months interval, after saving $500 per thirty days, John has amassed financial savings of over $1,000,000 (assuming a 6% annual fee of return).
Below proposed “means testing” to find out if Fred and John would obtain social safety and Medicare advantages, Fred could be entitled to full advantages whereas John wouldn’t obtain any advantages. Assuming Fred and John every stay an extra 25 years, Fred would obtain roughly $1,000,000 from the federal government and John must deplete his $1M in financial savings. Including insult to harm is the truth that John additionally paid extra taxes, because of his further effort and earnings, to additional assist Fred’s authorities sponsored retirement.
This can be a nice instance of these on the political spectrum who need “equal outcomes” with out “equal accountability.” These of us who consider in private accountability must be very conscious of the truth that even a few of institution Republican leaders in Congress and a few distinguished enterprise males, like Langone, are pushing for means testing. Notice the next remark from one such particular person: “When you’ve got substantial non-Social Safety revenue when you’re retired, why are we paying you at a time once we’re broke?” In different phrases, the federal government ought to reward dangerous conduct and penalize onerous work, threat taking and thriftiness.
Sure, this can be a mergers and acquisition difficulty. It’s this identical reasoning and the identical individuals that can punish these enterprise homeowners who took big dangers, failed greater than as soon as, made nice sacrifices after which lastly succeeded, towards large odds, to construct and promote their enterprise. After a life time of labor, threat and hardships, you’ll be penalized by means of the redistribution of your wealth. That redistribution will happen primarily by means of taxation and discount of your “paid for advantages” in order that others can benefit from your success. We must be vigilant in supporting these individuals who perceive that “equal alternative” must be the aim and never “equal outcomes.” Additional meals for thought; as a substitute of placing larger taxes on those that succeed, why not get rid of their taxes all collectively and, as a substitute, give them a bonus for creating jobs and wealth in America?? Only a thought.