Left Coast Voices

"I would hurl words into the darkness and wait for an echo. If an echo sounded, no matter how faintly, I would send other words to tell, to march, to fight." Richard Wright, American Hunger

Archive for the tag “millionaire”

Would taxing the (super) rich a little more be fair?

Economists always talk about “margins” or “marginal this” and “marginal that.” What does this really mean and how does this concept apply to real life?

It’s like this: Imagine you’re ten years old and your mom brings you late for dinner on Tuesdays, after your little league practice. Your mean older brother has already eaten two of the pork chops (or vegetarian schnitzel, if you prefer) that your dad grilled on the barbeque and there’s only one left. Your brother wants it, but your parents intervene and give it to you. Was this a good decision?

It should be pretty obvious that it was. But why, exactly? In technical terms, the decision was a good one because you would get more “marginal utility” from your first pork chop than would your brother from his third.

What might be an even simpler food-based analogy is the good-old pizza story. How much satisfaction do you get from your second piece of pizza (after you’ve only eaten one)? Compare that to the satisfaction you get from your eleventh slice (after you’ve already eaten ten). Can you see the difference?

Getting back to economics, how much would the lifestyle of a multi-millionaire improve if he or she all of a sudden received an extra thousand dollars? How much would your lifestyle improve with an extra thousand? I’ll bet there’s a difference. That’s because the marginal utility of a thousand dollars is much higher for the average person than it is for a wealthy person. I think this example could be taken much further. I’m going to say that the marginal utility of $1,000 to the average American adult is much higher than the marginal utility of $100,000 to a multi-millionaire.

OK, are you ready for some fun? Let’s do some math! Let’s forget about millionaires. Most whine that they don’t “feel” rich anyway. Forbes Magazine says that there are 403 BILLIONAIRES (yes, with a B) in America, with a combined net worth of 1.3 Trillion dollars. That divides up to an average of 3.2 billion each. Do you think you could somehow get by on $100,000 per year? These people could “survive” at that level for 32,258 years on average without ever making any more money (not accounting for inflation which is predicted to be pretty bad starting in the year 8011).

My question is simple: What is the marginal utility of the third billion dollars out of $3.2 billion? How much does a person’s life improve if he or she has $3.2 billion versus a mere $2.2 billion? Does it enable a person to buy a third private jet, or a sixth summer mansion? What if that money were used to employ people to repair our nations aging and rotting infrastructure? That would mean over 8 MILLION jobs that would pay $50,000 for one year, or 800,000 jobs at $50,000 for ten years.

Now of course these figures are exaggerated somewhat. Some of that money would have to be spent on equipment, materials, etc. But I think the point makes itself. But here’s the kicker (and it’s a big one)… The billionaires would BENEFIT MORE from this scenario than they presently do by keeping that extra billion dollars. Why? Well, besides having better roads, water supply pipelines, sewage handling and treatment, and many other elements of the quality of life, there would be millions more people with the means to buy their products and services. In fact, the billionaires could probably recoup their “investment” (more or less) in just a few years in dollar terms, but the benefit to their country would outweigh that many times over.

So, I ask again: Would taxing the rich be “fair”?

-Tom Rossi

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Tom Rossi is a commentator on politics and social issues. He is a Ph.D. student in International Sustainable Development, concentrating in natural resource and economic policy. Tom greatly enjoys a hearty debate, especially over a hearty pint of Guinness.

Tom also posts on thrustblog.blogspot.com

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A Better Chance Than The Lottery

True, you can become a millionaire from winning the lottery. Also true that there are lottery winners every week. But for the aspiring author, winning the Amazon Breakthrough Novel Award (ABNA) is akin to that precious and elusive lottery ticket.

In today’s economic climate, it is a brave publisher who invests in an unknown author. Yes there are the J.K. Rowlings’ out there, but they are as rare as, well, a winning lottery ticket. Assuming you are not a celebrity or know someone in the industry, it is almost impossible to pick up an agent. Then that agent needs to stay in the business and find a publisher, and then the publisher needs to stay in the business and … well you get the gist.

But once a year, optimism gets the better of us writers. ABNA is the mother of all writing competitions. They accept only 10,000 entries (better odds than the lottery) which then go through a series of rounds until two talented individuals stand alone. Or rather stand with the publishing folks at Penguin Group (USA), Amazon.com, and CreateSpace.

It is an exciting process. At midnight on January 24th, we all sat poised by our computers, all necessary documents ready to upload. In a month’s time we will all anxiously await the first cut. We look first for our own names and then those of our friends who have also entered.

Last year. I reached the last 250 entries. Like any good lottery player, I was already dreaming of my shining literary future. Alas, I went no further and my dreams were put aside in favor of seeking an agent and publisher. I did succeed – I have nothing to complain about. But that didn’t stop me this year watching the clock tick away to midnight and begin the dream all over again.

I will keep you posted – to the bitter end – but until then, allow me to dream.
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Alon Shalev is the author of The Accidental Activist (now available on Kindle) and A Gardener’s Tale. He is the Executive Director of the San Francisco Hillel Foundation, a non-profit that provides spiritual and social justice opportunities to Jewish students in the Bay Area. More on Alon Shalev at www.alonshalev.com

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