I had an interesting discussion with my friendly neighborhood philanthropist this week. It seems that he made a mistake in his investments and made too much money. Now he was going to have a high tax bill. Since he voted for Obama and thinks that the rich need to pay more I told him he should be glad that he can participate in the redistribution of wealth. He got a sour look on his face. It seems it’s a little different when it is your money and you are the rich in question.
He had a solution though. It is called a tax loophole. He went through his investments and looked for the losers he had accumulated and was hanging on to hoping they would go up. Since that doesn’t seem to be happening he is proceeding to sell them at a loss. He will keep doing this until the taxes he owed are down to zero.
I have no problem with this in general principle nor in specific instance. I think profits should belong to the person who took the risk, not the government. In his case, all the profits he makes will be donated to one charity or another without the government taking its cut, so it is a win-win.
What amazes me is that the politicians keep thinking they are so smart that they can set up a system that keeps people smarter than them from accumulating wealth. They could, but it would destroy the politicians too. Every time they set up a system, smarter people find a way around it. It is us simple folk in the middle that lose.
I just hope that I never become one of the charities that he donates to.
homo unius libri
You aren't tax-deductible, so you're safe from his charity! ;-)
ReplyDeleteNow that is one angle that I never thought of. I guess I can relax.
ReplyDeleteGrace and peace.