What do Beyonce and Jay Z have in common with Walmart’s Walton family, Dr. Dre and Nike’s Phil Knight? Love them or hate them, as American billionaires, they are a target on the campaign trail.
“You’ve got CEOs making 300 times what the average worker is making. The deck is stacked in favor of those at the top,” says a pro-Hillary Clinton political advertisement.
“Millionaires and billionaires do not pay their fair share,” fellow Democratic candidate Bernie Sanders said in a recent speech, claiming the wealthy created a “corrupt” political system and a “rigged” economy.
But billionaire Jean Paul DeJoria, founder of Patron Tequila, says most wealthy Americans did not get rich because of handouts or a rigged economy.
“If there is a CEO who creates value for shareholders and wealth for the economy, the value they create is so much greater than their compensation.”
– Sydney Finkelstein, author of “Superbosses” and a professor at the Tuck School of Business at Dartmouth College
“We look (at) it as stupid politics,” DeJoria said in an interview from his home in Austin, Texas. “That’s what people say to get other people to vote for them, but it’s not accurate.”
Wealthy Americans create jobs, according to DeJoria, who began selling papers at 10 and was once so broke he lived out of his car in the parking lot of a Mexican restaurant.
A study by the National Bureau of Economic Research found successful entrepreneurs realize just 3 pertcent of the value of what they produce, while consumers reap the rest, either directly through employment or by social benefit.
“If there is a CEO who creates value for shareholders and wealth for the economy, the value they create is so much greater than their compensation,” said Sydney Finkelstein, author of “Superbosses” and a professor at the Tuck School of Business at Dartmouth College.
Given the blame directed at America’s millionaire class for inequality, the U.S. economic meltdown and our slow recovery, Fox News spent a week analyzing the Forbes list of 400 wealthiest Americans. Admission to the list starts at a record $1.7 billion. In total, the top 400 created or controlled more than 10 million jobs across the country. The top 100 founded companies that employed, on average, 40,000 workers.
“These are people giving us jobs. To demonize them is to damage the underlying force of this country,” said management consultant Eric Schiffer. “We are only as good as our people and we don’t want to put our best players on another team. If you tax them, they will leave.”
Sanders has proposed a top federal tax income rate of roughly 54 percent, with a capital gains tax rate to match, up from the current 25 percent. The combined federal and state rate for the highest earners would top 76 percent in California and New York.
“When you are working 7 or 8 months a year just to pay taxes, what kind of incentive is that?” asks DeJoria.
If that were to occur, DeJoria and others predict one of three things will happen. The wealthy will either leave, park their income offshore like many U.S corporations or they will hire the nation’s best tax lawyers to get around the rules. In any case, the U.S. government could very well end up with less, not more revenue.
“They’ll look for loopholes or they’ll take their money to another place,” said Finkelstein. “Companies and wealthy individuals have been successful in finding completely legitimate legal ways to minimize tax regulations.”
Being jealous of wealthy people is a “very human tendency,” acknowledged Finkelstein. Yet, DeJoria says many young progressive voters don’t see the irony, voicing their antipathy for ‘millionaires and billionaires’ on Bill Gates software or Mark Zuckerberg’s Facebook using an IPhone developed by the late Steve Jobs.
Read more: www.foxnews.com