Can America's Rich Solve our Poverty Problem?

Recently I've been in a discussion with some friends from the wrong political party about whether taking the money from the wealthy and giving it to the poor will actually eradicate poverty in America. I thought that using sound logic, in the form of math, would demonstrate the error in their thinking. No such luck. But after spending so much time researching the facts, I thought I'd post it here for more open-minded and logical readers to consider.

Facts:
According to Forbes Magazine, there are 385 billionaires in America. Their net worth (not income) is $12.93 trillion.
According to the Wall Street Journal, there are 2.5 million millionaires in America. This includes the 385 billionaires mentioned above.
The combined net worth of all millionaires (including billionaires) in America is $32.7 trillion.

According to statistics on the Internet, anywhere from 14-16 million Americans are unemployed.

The IRS collects about $2.4 trillion a year in taxes, after refunds. (IRS.gov)
The top 1% of wage earners pay 33% of the taxes collected. ($792,000,000,000 annually).
The top 5% of wage earners pay in 53% of the taxes collected. $1,272,000,000,000 annually).
The top 10% pay 65% of the taxes collected. ($1,560,000,000,000 annually).
The top 25% pay 83% of the taxes collected (taxesandgrowth.ncpa.org) $1,992,000,000,000 annually).
The top 50% pay 96% of the taxes collected (IRS). ($2,304,000,000,000 annually).
The bottom 50% of wage earners pay 4% (IRS). ($96,000,000,000 annually).

According to a study done by the University of Michigan, 32.3 million Americans (including children) live in poverty.
Poverty is defined as $11,161 for a single adult; $14,361 for a couple; $14,787 for a single parent.
Included in this figure are college students and retirees who work part-time, (but no numbers were available.)
According to the U.S. Census Bureau, only 2.2% of Americans are chronically living in poverty.
Out of the 32.3 million Americans in poverty, 675,867 are chronic (never move out of poverty).

According to the U.S. Census Bureau, there are about 307,212,123 people living in America (including children)
There are 117,538,000 households in America.
There are 99,270,000 people employed in America.
These employed people earn an average of $49,777 annually. (real median income)

According to the Small Business Association, about 44% of the jobs in this country are created by small business. The other half are employed by major corporations.

According to www.taxesandgrowth.ncpa.org, the cost to businesses for compliance to the federal income tax was $148 billion. (just throwing that in since corporate taxes are included in the $2.4 trillion the government takes in every year.


A true story. My daughter, who is 19 years old, recently quit college so that she could find a full-time job to help pay her bills. She currently works 30-35 hours per week at a restaurant in Garner. Her best night to date was $105 this past Sunday. On Monday she made $15.00. On Wednesday night she made $13.00. Her typical Friday/Saturday income is about $60 for the two shifts. Her average week she might earn $150.

Laura’s rent is only $150 per month. She shares a home with four room-mates. Her auto insurance is $75.00 per month. Her share of utilities is $40 per month. Laura’s disposable income for food, clothing, gas, prescriptions and necessities is about $335.00 per month. I contacted the Wake County social services office to see if Laura qualifies for any assistance until she can find a job that produces more income. According to them, she might qualify for $118 in food stamps per month. If Laura continues to earn the same amount and receives the $118 per month in food stamps, her annual income will be around $9,216.00 – assuming she doesn’t take a vacation or get sick. My daughter falls into the poverty category.

Now let’s assume that the government decides that the ultra-rich people in America – the billionaires, need to help Laura and the other 32.3 million Americans living in poverty. They start with the billionaires – all 385 of them, who’s combined net worth (not annual income) is $12.93 trillion dollars. When you take everything that the billionaires own – homes, cars, jewelry, investments, cash, etc and divide it among the people who are living in poverty, Laura’s “fair share” of that wealth is $400,309.60, putting Laura in the top 5%. That’s every man, woman and child currently living in poverty in America. The 385 former wealthy Americans are now the only poor people in America. Sounds like a good trade-off.

If every one of those poor people were frugal and only spent the national average of $49,777 annually, that money would last them about 8 years. If they’re really frugal and only spent $15,000 a year (just above poverty, but not enough to receive assistance), they would be able to survive for about 27 years…assuming there is no inflation and the cost of living doesn’t go up. Those that survived – because that’s all they’d be able to do on $15K – would again fall into poverty. The smart ones, like my daughter who is bright enough to finish college, would likely find some gainful employment after using that windfall to pay for her college expenses. Those who are not so bright will probably blow through the $400K in a matter of months and will be worse off than before they had the money stolen from the wealthiest Americans.

But there’s a problem. The taxes once collected from the top 1% of Americans would decline by 33%.. or about $792 billion a year. The IRS would be forced to increase taxes on the rest of us to make up for that difference. With only a little over 99 million Americans working, that deficit would cost each one of us an additional $8,975.52 per year. But that’s not fair! Why should the rest of us pay another $9K per year in taxes? Tax the rich – the millionaires (since there are no more billionaires in America). At this point no one is living in poverty any longer, but there are still as many as 16 million Americans unemployed. Their unemployment will soon run out because the government cannot afford to continue to pay them.

Here we go again: Subtract the $12.93 trillion already stolen from the former billionaires from the $32.7 trillion net worth of the millionaires and you’ve got $19.8 trillion remaining. These are the top 5% of wage earners in America. Let’s take all the net worth of the millionaires (not just their income, but everything they own) and distribute it among the unemployed. Now, those poor jobless people get a windfall of $1,237,500 each. But no one needs that much money. Let’s be fair and divide it among both the employed and the unemployed. At this point, we would each get $171,177.63. If we’re frugal, we can make that money last as long as 11 years @ $15K per year.

Oh no! We’ve solved the poverty problem in America for a decade or so, but now the IRS has a shortfall of another $540 billion per year. The revenue coming into the government for things like national defense, interstate commerce (the only Constitutional obligations of the federal government) has taken a fatal blow. They cannot pay for education, research and development..not to mention pay the interest on the national debt of $413 billion annually. Unless the U.S. pays the interest on our national debt, foreign nations will call the notes due and national parks and other federal and state lands will be seized to satisfy the debt….but before we get to that point –

Because the corporations that hire more than half of our workers are owned by the people in the top 5%, those businesses are filing bankruptcy and as many as 45 million Americans have lost their jobs by year two. The small businesses that once depended upon the large corporations and their employees to keep them in business begin to fold as well. The IRS finds that it cannot collect taxes and lays off the 16,000 new employees hired by this administration and the other agents as well. The government shuts down, as does Wall Street as there are no investors either. Within a matter of 12-15 months, the United States becomes one of the poorest nations on earth. All infrastructure, such as military, police, fire, EMT, CDC, the Department of Transportation, Department of Energy and all other agencies send government employees to the unemployment office, which has been closed down too because there is no money to pay any government employee. Foreign governments buy land and homes for pennies on the dollar, or foreclose to recoup loans secured by our property on behalf of our government.

Churches and charities are unable to continue their work and millions suffer. Hospitals cannot obtain life-saving drugs because the pharmaceutical companies have gone out of business. Doctors and staff are not getting paid, and creditors are demanding payment for student loans, medical equipment and malpractice insurance. Law suits have sky-rocketed as people seek any revenue still remaining. Ironically, lawyers are still in demand, but they’re having to settle for bartered goods in lieu of cash.

On a good note, we no longer have an illegal immigration problem. Illegal aliens have found it impossible to earn, (or steal), and have returned to their native countries. Tragically, our enemies have no trouble crossing our borders and use this opportunity to set off dirty bombs in some areas. Gangs have taken over most of America and fight radicals who muscle in on their territory. Innocent Americans suffer at the hands of thugs and foreigners; and from neighbors who are desperate for even a scrap of food. Those who fled to the mountains thinking they could hide from the law breakers discover that they are safe nowhere. Armies of gangs burn, rape, and pillage their way across our once beautiful nation. Not a seed is left to plant for future crops. Thousands die daily from starvation and violence. America dissolves into chaos…all because some thought that the rich did not do their fair share to help the poor.

There is no Utopia. Socialism and Communism have never worked in any culture. Greed for what belongs to someone else only makes us poorer. Far better to learn to live within our means than to demand rights that do not exist. It is morally wrong to desire to take what belongs to someone else.

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