Taxing The Rich

Bill Gross is the head guy at PIMCO Advisors and manages billions in bond portfolios. Wall Street listens keenly when he talks about the economy and interest rates. The Dow fell 226 points on Tuesday in part because Gross said some bearish things during a mid-day appearance on CNBC.

Despite being very wealthy himself, Gross apparently has little patience for rich people who pat themselves on the back for their philanthropic activities.

Of course the wealthy fire back in cloying self-justification, stressing their
charitable and philanthropic pursuits, suggesting that they can more efficiently
redistribute wealth than can the society that provided the basis for their
riches in the first place. Perhaps. But with exceptions (and plaudits) for the
Gates and Buffetts of the mega-rich, the inefficiencies of wealth redistribution
by the Forbes 400 mega-rich and their wannabes are perhaps as egregious and
wasteful as any government agency, if not more. Trust funds for the kids,
inheritances for the grandkids, multiple vacation homes, private planes,
multi-million dollar birthday bashes and ego-rich donations to local art museums
and concert halls are but a few of the ways that rich people waste money – and I
must admit, I am guilty of at least one of these on this admittedly short list
of sins. I have, however, avoided the last one. When millions of people are
dying from AIDS and malaria in Africa, it is hard to justify the umpteenth
society gala held for the benefit of a performing arts center or an art museum.
A thirty million dollar gift for a concert hall is not philanthropy, it is a
Napoleonic coronation. MORE

I disagree with the solution he offers, which is that the government should use tax policy to redistribute wealth from the haves to the have-nots. His broader point isn't far off, though. Wealthy people who support opera, ballet, symphony, etc, and then pat themselves on the back for their "generosity" are being a little disingenuous. These may be worthy causes, but they aren't "charity."

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