Robert G. Yetman, Jr.

The Woes of the “Wealthy”

A recent article in The Wall Street Journal highlighted the difficulties faced by some six-figure-per-year earners as they consider the ramifications of Obama-led tax increases on their income bracket.  Several families were profiled in the article, and each had their own sad story with respect to how, despite public perception, they are hardly “rich,” and in no position to withstand taxes much higher than those which they already pay.  A link to the article follows here:

http://online.wsj.com/article/SB123983744241222865.html

The public response to the article has been substantial, and the debate that’s ensued has centered on the matter of class warfare; some reviewers sympathize completely with the $200,000 to $400,000-per-year families profiled in the article and rail against any prospective tax increases on a bracket that already pays the lion’s share of U.S. income taxes, while others feel that these folks are indeed “rich” and should be happy to pay more to buttress the government dole.

As for me, I think the article highlights two separate issues, which are in no way mutually exclusive: the inherent unfairness of the war against anyone who actually aspires to do something professionally meaningful with his life, and the importance of sound financial management.   

First, I have long stood against the class warfare that’s regularly incited by Democrats in order to reap votes on election day.  Taxes on higher-earning Americans need to be cut, and no, I don’t think the lower brackets in this country pay their fair share.  Raise taxes on them (or better still, lower them for everyone).

All of that said, one can be completely against everything Obama and his merry band of socialists stand for and still wonder how a family earning hundreds of thousands of dollars per year is “just getting by,” as it was put by one article interviewee.   A belief in the inappropriateness of high taxes…as well as a belief in sound personal financial management…are two ideas that can live together perfectly well.  Taxes should be cut across the board, and people should do a better job of tracking what they’re doing with their money.  I in no way think that those who make six figures a year are automatically rich, nor do I even feel that discussions about what defines rich for the basis of assessing taxes are even appropriate, but I will admit that from a personal financial planning standpoint, if someone is “just getting by” on nearly a half-million dollars a year, you have to at least consider that there’s something else going on here that has little to do with being sucked dry by our favorite, leeching, deadbeat Uncle…a guy named Sam.

Agree or disagree; please register your comments below.

Robert G. Yetman, Jr.  Editor-At-Large www.ChristianMoney.com

Tags: class+warfare, robert+g.+yetman,+james+l.+paris,+christian+financial+advice

Retention Bonus Payout Policies Should Not Discriminate Against Execs

We’re all familiar with the “travesty” of AIG executives receiving retention bonuses at a time when the failing insurance giant is receiving an enormous lifeline, courtesy of the U.S. taxpayers.  During the wildly overdone uproar last month, vile hypocrite Bawney Fwank was all-too-happy to grill embattled AIG CEO Edward Liddy over the payment of the bonuses, and Sen. Charles Grassley of Iowa went as far as suggesting that AIG execs should do the honorable thing and kill themselves.  That’s great.  It’s so nice to see all of this indignation from a body (the U.S. Congress) that is embarrassingly replete with tax cheats, liars, and all-around dirtbags; chutzpah can be a wonderful thing, I suppose, if you’re arrogant enough to express it and those around you haven’t enough spine to call you out.  As for me, I'm waiting to see if any of these esteemed members of congress will be tossing themselves from a tall building in the wake of the lynching given the American taxpayer atop Mount Porkulus. 

Now comes the news that retention bonuses far in excess of those paid out to AIG execs are scheduled to be paid to employees of Fannie Mae and Freddie Mac, the two stockholder-owned government sponsored enterprises (GSEs) that are every bit as responsible for this depression as AIG or any other entity.  To review, the relaxing of underwriting standards at Fannie and Freddie, powered chiefly by liberal social engineering policies developed in both major parties over the last ten years, contributed substantially to both the cause and subsequent effects of the implosion.  Many of those who were inclined to spit on AIG for handing out bonuses to execs seem comfortable in the hypocrisy that results from giving a thumbs-up to Fannie and Freddie bonuses by pointing out that even the small fry will share in the booty (although to be fair, Grassley, in an apparent attempt at appearing consistent, has gone on the record in recent days to express his outrage over the Fannie/Freddie bonuses).  GSE regulator James Lockhart has said that it’s all OK because “many hard-working lower-level employees which are important to the mission of providing stability, liquidity, and affordability to the housing market” will get the money, too; it’s not just going to evil rich guys.

This is garbage.  First, the bonuses scheduled to be paid to these GSEs over the next 18 months are substantially more than those paid to AIG ($210 million vs. $165 million).  More importantly, there should be one standard here, regardless of what size these bonuses are or what level of employee may benefit.  Any company that has seen its shareholder equity destroyed and is now largely dependent on government help for survival should expect to have its bonuses highly scrutinized and curtailed.  I don’t care who suffers as a result; the fair application of the policy should remain paramount.  In the end, if you decide that retention bonuses paid to Fannie and Freddie are fine because lots of “lower-level” people will share in them, but retention bonuses paid to AIG are wrong because they’re being paid to “higher-level” people, then you’re complicit in another of the many unfortunate cases of class warfare-cum-communism that we’re seeing now and which are important tools in the Obama-led assault on capitalism and the traditional American way of life.  You know better than that.

Robert G. Yetman, Jr. Editor-At-Large www.ChristianMoney.com

Tags: aig+bonuses,+executive+bonuses,+robert+g.+yetman,+james+l.+paris,+christian+financial+advice