After not too long ago listening to the feedback by Ken Langone, one of many founders of Dwelling Depot, relating to “means testing,” I believed it could 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 extra time and would not hesitate to make use of a cost card for quite a few impulse expenditures. John avoids expenditures for unhealthy gadgets, earns, on common, $150 per week in extra 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 yr interval, after saving $500 per thirty days, John has gathered 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 reside a further 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 damage is the truth that John additionally paid extra taxes, on account of his additional 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 duty.” These of us who imagine in private duty ought to be very conscious of the truth that even a few of institution Republican leaders in Congress and a few outstanding enterprise males, like Langone, are pushing for means testing. Notice the next remark from one such particular person: “If in case you have substantial non-Social Safety revenue whilst you’re retired, why are we paying you at a time after we’re broke?” In different phrases, the federal government ought to reward unhealthy habits and penalize laborious work, danger taking and thriftiness.
Sure, this can be a mergers and acquisition subject. It’s this similar reasoning and the identical folks that can punish these enterprise house owners who took large dangers, failed greater than as soon as, made nice sacrifices after which lastly succeeded, towards super odds, to construct and promote their enterprise. After a life time of labor, danger and hardships, you’ll be penalized via the redistribution of your wealth. That redistribution will happen primarily via taxation and discount of your “paid for advantages” in order that others can make the most of your success. We must be vigilant in supporting these individuals who perceive that “equal alternative” ought to be the purpose and never “equal outcomes.” Additional meals for thought; as an alternative of placing larger taxes on those that succeed, why not remove their taxes all collectively and, as an alternative, give them a bonus for creating jobs and wealth in America?? Only a thought.