Some Wealthy Step Up

I don't know how many people are aware of this, but there are a number of wealthy individuals, mostly in Europe, that are petitioning their governments to tax them more.  This is all in an effort to assist governments in getting back on track, lowering the deficit, and combating austerity measures that are largely unfair to the poor.  To me this is amazing news.  I never thought I would see the day when the wealthy would ask for higher taxes.  Granted, it is in the wake of widespread unrest and the inability of governments to reduce their deficits, but still, it is a step forward.  The whole idea came from Warren Buffet, the American billionaire, who published an op-ed piece in the NYTimes urging the wealthy to step up to the plate and ask for more taxes to be taken out.  While it is fantastic that there are a number of individuals in Europe who are taking this stance, there has yet to be many in the United States or Britain for that matter who have taken up Buffet's idea.  To read more details, follow this link.  While this may assist government's in reducing their deficit if enough of the top earners are taxed more, there are questions that come to my mind about the efficacy of this idea moving forward. 

My first concern would be that governments would not actually use this new found money to reduce the deficit, but would rather use it to maintain current spending.  Here is the caveat however, in order to drag ourselves out of this recession, there must be a two fold effort on the part of the government, to both cut spending in unnecessary areas, but also to increase spending to promote job growth.  There must be a balance that is reached in order for this idea to work out and personally, I feel that to date, governments are largely on the wrong track when it comes to recovering from our current economic situation.  Many governments, including our own, have adopted austerity measures to help reduce deficits and grow the economy, yet it hasn't worked.  I wonder if they will be able to figure out the right balance of cuts and spending to get us out of this mess.  Extra money in their hands might do the trick, but it might also go to waste.  Especially looking at the United States government where it took them an extremely long time to figure out a budget and then they dragged things down to the wire in order not to default on our country's debt.  For some reason, I don't really trust our government with extra money from the wealthy.  While Warren Buffet's idea is fantastic, I think that there are more useful ways for that money to be put to use. 

If the wealthy are to take up Buffet's idea en masse, then I feel that there needs to be some tweaking done to that idea.  Buffet's idea edges closer to socialism than I would personally like.  What I would like to see is the wealthy taking that money and personally using it to assist the poor, promote job growth on their own through personal programs, or simply donate it to charity where it will be put to use in their given country.  I believe that if they did this, it would benefit more people and have a greater effect on the economy.  By injecting capital directly into the system, they are skipping the bureaucratic step of government where it would take much longer for the money to make its way into the necessary places.  The most surefire way to  drag ourselves out of this recession is to create jobs.  The wealthy have the capability of doing this.  If they used their money to assist industries with capital and help companies to grow and hire, then the money in effect produced by industries and business would make its way into the governments hands where they could use it to reduce the deficit. 

I hope that Warren Buffet's call does not fall on deaf ears here in the United States.  I am excited that there are a number of individuals in Europe who see the benefit of his idea, yet at the same time, I am not surprised that wealthy individuals here in the U.S. are dismissing his idea altogether.  It seems that while the wealthy everywhere seem to be an insulated group largely unaffected by the current economic situation and possessing the means to go on living even if they didn't work another day, the wealthy in the United States are especially possessive of their earnings and even more insulated than the wealthy elsewhere.  Perhaps taxing the wealthy more is the right thing to do, maybe it will be a wake up call, or maybe it will cause them to take their wealth and leave.  Buffet's idea, unfortunately, could also be a disincentive for businesses to grow as the owners of those businesses see a higher tax for themselves if they make more money.   Again, I think we need to remove government from Buffet's idea and somehow get the wealthy to see that they can do more good by helping those in need personally with their extra money (provided they think they have extra).  We shall see where this ends up, but regardless of the end result, at least there are those wealthy individuals out there who still possess a philanthropic heart to some extent and are willing to sacrifice for the benefit of the whole.