Thursday, July 23
Posted 2 p.m. EDT

Tax the rich?

Ever wonder how the rich get richer? At the risk of seeming obvious, it's because they work more. That's according to this book, by economists Mark Aguiar and Erik Hurst, published by the American Enterprise Institute for Public Policy Research.

The authors dissected a four-decade survey that took place from 1965 to 2005, and examined leisure -- specifically, "leisure inequality" in America.

Many people (you know who you are) who are double-fisting the BlackBerry and cell phone, will ask, "What leisure?" In fact, the study notes that the leisure time of the average American has increased by approximately four hours per week since the 1960s. After rising by about five and a half hours a week from 1965 to 1985, it then fell by an hour and a half a week during the past 20 years.

But the more interesting statistic is the leisure gap between the less educated and the well-educated. In short, those without a high school diploma increased their leisure time by about eight hours during the period of the survey, whereas the college-educated Americans decreased their time at rest and play by six hours.

Of course, unemployment is higher among those without a college degree. But as this blog in U.S. News & World Report points out, the authors also make an argument against President Barack Obama's plan to redistribute wealth by taxing those with the highest incomes: "Aguiar and Hurst argue that their research may show that lower-earning Americans work less -- and therefore earn less -- because they choose to, not because the system is gamed against them."

President Obama has his own plans for how he wants to spend the revenue he collects from the highest-income earners. But when the rich are motivated to get richer by working more, it sets in motion its own wealth-distribution scheme. The more they spend on goods and services, the better it is for the economy.

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Monday, July 20
Posted 2 p.m. EDT

Tax the rich?

According to this history of taxation from the U.S. Department of the Treasury, we've had an aversion to taxes as part of the American culture since the Revolution, when Parliament imposed a surcharge on tea.

Unless, of course, we decide to put the burden solely on the wealthy.

Historically, the tax system has represented our nation's need for revenue and our cultural view of the role of government throughout its various reforms. Certainly, the wealthy have paid a disproportionare share because they are taxed at a higher rate. On the other hand, they have also benefited from former President George W. Bush's tax cuts.

But President Barack Obama's current plan for taxing the rich to correct the ills of society seems like flawed math.

As this article in CNN Money points out, there probably aren't enough rich people to pay for the programs -- especially given the massive health care reform being proposed.

According to the CapGemini and Merrill Lynch World Wealth Report, released in June, there were 2.5 million millionaires in the U.S. in 2008 (defined as those with investable assets of $1 million or more, not including a primary residence.) That's less than 1 percent of the population.

And Obama wants the rich to fund more than just health care reform. The table is laden with other revenue-generating ideas, all expected to be paid for by those earning more than $350,000 per year.

The article quoted Len Burman, director of the Tax Policy Center, who pointed out, "There's an argument for making the tax system more progressive. (But) people are going to have to pay tax or come to terms with smaller government. Right now there's enormous pressure for the government to do more and more."

If, as the article suggests, the federal debt is expected to double from 41 percent of gross domestic product to 82 percent by 2019 under the president's proposed budget, the rich won't be the only ones facing huge taxes.

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Friday, July 17
Posted 2 p.m. EDT

Friends in low places

In the latest salvo against the rich, their ultra-exclusive Big Apple nightclubs are being reclassified as circa-1970s basement rec rooms.

Gone are the days of the $18 cocktail, according to this article in The New York Times. Now you'll lounge with a few friends sharing plastic cups of beer, and maybe shoot a little pool. Like the song says, "I'm not big on social graces."

It seems the trendy New York nightclubs (only don't call them that now) are having trouble attracting enough patrons who are willing to pay big bucks just to say they partied in the same room as the latest hot model or actor. Revenues are down 20 percent to 40 percent in the last year, and several clubs have closed.

Now, haughtiness is as stylish as a balloon payment, David Rabin was quoted as saying in the article. He's an owner of multiple bars, clubs and restaurants and the president of the New York Nightlife Association.

But the places to see and, especially, be seen, aren't likely to evaporate in a slick of stale beer. The yachts will still muscle in on the Riviera -- albeit the "new" Riviera on the Dalmatian coast off of Croatia -- and the glitterati, though diminished in number, will still attend lavishly understated fundraising parties in Palm Beach.

The Manhattan nightclubs are just gyrating in the way they always have to attract the latest iteration of the beautiful people. From speakeasies to flashing-mirrored discos to hip-hop bling and now rec-room chic, the ones who correctly read the fads will survive.

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