Thank a union guy!

Author Stephen King (born poor in the state of Maine; worked his butt off; got rich; has a house down here) stopped into the Awake The State Rally in Sarasota FL last week. To the delight of the crowd, he took the mic.

Some choice bits:

At 1:45   I’m a rich guy. I pay 28% in taxes and I want to know why I don’t have to pay 50%!

At 4:35  If you like a weekend, thank a union guy. If you like a 40 hour week, thank a union guy.

Proud to have you as a neighbor Mr. King. Sir.

4 responses to “Thank a union guy!

  1. What a great speech.
    Donating to libraries, community stuff and veterans.. That is of course what normal taxes do as well. It goes to good things in society.

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  2. Hi Mo,
    This is a really interesting video that I found to be actually quite thought-provoking and illustrative of the complexity of the role of government, taxation, and efficiency of tax revenue disbursement.
    I think Mr. King actually answered his own question, and/or might want to be “careful about what he wishes for, because it may come true.”
    By way of explaining what I mean, let’s start with this link: http://money.cnn.com/2009/11/11/news/economy/national_debt/ .
    It shows how Mr. King has the ability to augment his taxes by donating the 22% shortfall (to get him to 50% taxed) to the U.S. government.
    Of course, to the extent that he donates to the U.S. treasury, the amount he has left over to support causes and charities that he is passionate about will necessarily be less.
    Furthermore, what I infer from Mr. King’s commentary is that he believes a Democratic administration would spend tax revenues more wisely than a Republican administration. So the question is whether an administration that has to compromise to varying degrees (depending on which party holds the majority at the time) with Republicans will get that money where it needs to go (or at least where Mr. King believes it needs to go) as efficiently as he could himself.
    Given that Democrats and Republicans trade control of the government back and forth (yet taxes are with us always), it would seem that Mr. King’s argument should be for LOWER taxes when Republicans are in power (leaving him more to donate for worthy causes) and HIGHER taxes when Democrats are in power (who will spend it appropriately).
    But considering the amount of effort required to make small (let alone radical) changes to the tax code, it further seems to me that Mr. King’s better approach would be to advocate that wealthy people follow his lead and donate to worthy charitable causes each year such that the combination of their taxes and donations equals a minimum of 50% of their gross income.
    An additional bonus comes in the form of tax deductibility of charitable contributions. According to Ask.com, cash contributions to qualified charities can be deducted up to 50% of adjusted gross income.
    So let’s say that Mr. King has $1,000,000 adjusted gross income from book royalties each year. If he pays 28% in taxes, he owes the government $280,000. If he donates another $220,000 to charity as a means to get his “support” (i.e., what he gives up in taxes and charities) level up to 50%, he actually reduces his taxable income to $780,000. 28% of this becomes $171,600. So now out of his $1,000,000 he owes the government $171,600 and charity $220,000 for a total of $391,600. This leaves him with net income of $608,400. But this is 60.84% of gross income and well above his target of 50%. So he can correct for this by actually further INCREASING his charitable donations until he balances out at 50%.
    This seems to me to be a real win-win that gets the money where it needs to be regardless of which political party holds the majority.
    Since he is now your neighbor, what do you think of proposing this idea to him?

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    • What an interesting idea that people can donate to pay down the debt – I have seen the occassional story about some old guy who left his wealth to the gov’t and always thought it was strange, but now I see it’s not really crazy. Though I doubt many people do it!

      As for your proposal, Mr. King lives – not unexpectedly – on a beach behind walls and hasn’t exactly invited me to dinner! 🙂

      And welcome back Alan – thought you’d dropped out of the blogsphere.

      Like

  3. Pingback: A great quote for Sunday Morning « Under The LobsterScope

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