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Belmont Club

“Fabulously Wealthy”

April 5th, 2013 - 3:39 pm

When Barack Obama debated  ”Joe The Plumber” the candidate put his philosophy of taxation this way to the aspiring small businessman:

Obama: Why don’t you want me to tax the rich? I want to tax the rich so the poor can get rich quicker.

JTP: What happens when I get rich?

Obama: Why, the good news is you’ll have gotten there faster.

The verbatim conversation went this way:

Joe: … and I’m, you know, buying this company and I’m gonna continue to work that way. Now, if I buy another truck and adding something else to it and, you know, build the company, you know, I’m getting taxed more and more while fulfilling the American Dream.

Obama: Well, here’s a way of thinking about it. How long have you been a plumber? How long have you been working?

Joe: Fifteen years.

Obama: Okay. So, over the last 15 years, when you weren’t making $250,000, you would have been getting a tax cut from me. So you’d actually have more money, which means you would have saved more, which means that you would have gotten to the point where you could build your small business quicker than under the current tax code. So there are two ways of looking at it. I mean, one way of looking at it is, now that you’ve become more successful…

Supposing Joe the Plumber actually got rich. Here’s what’s in store for him. As The Hill reports, “Obama budget to take aim at wealthy IRAs”

President Obama’s budget, to be released next week, will limit how much wealthy individuals – like Mitt Romney – can keep in IRAs and other retirement accounts.The senior administration official said that wealthy taxpayers can currently “accumulate many millions of dollars in these accounts, substantially more than is needed to fund reasonable levels of retirement saving.”

Under the plan, a taxpayer’s tax-preferred retirement account, like an IRA, could not finance more than $205,000 per year of retirement – or right around $3 million this year.

Bill Maher, in a moment of lucidity, told Larry King that maybe the reason Joe the Plumber wanted fewer taxes was because in the end he would have to pay more taxes. Therefore he needed to save more for his retirement to compensate for the fact that they were going to take his retirement money away from him. So he wanted to start saving more before it was too late.

But maybe it’s already too late.

The shorthand for this process is ‘Cyprus’. Marc Faber, a financial pundit at CNBC recently predicted that what occurred on the Mediterranean island would “happen everywhere in the world, in Western democracies”.  There was simply no other place for government to get money except by taxing wealth. So they were going to do it. “If you look at what happened in Cyprus, basically people with money will lose part of their wealth, either through expropriation or higher taxation”.

And sure enough the trend is global. Australian Prime Minister “Julia Gillard has failed to rule out if Labor will raid superannuation funds in the May budget, saying any decisions made for the sector will be in Australia’s long term interest.” That means she’s going to do it.

It will interest Americans to note that according to the Australian Labor party, being “fabulously wealthy” means A$2 million in lifetime savings.

Are you fabulously wealthy? Are you planning on becoming fabulously wealthy anytime soon?

Forget the anxiety about government coming for your guns. It’s your money they’re interested in. The gun part is just to make the money part easier. And if they can’t get the bucks one way, they’ll try another. “French President Francois Hollande declared on Thursday that companies would have to pay a 75 percent tax on salaries over a million euros after his plan for a “super-tax” on individuals was knocked down by the constitutional court.”

But there’s no need to worry. Julia Gillard said ”we have created a scheme which gives working Australians the opportunity to look forward to a decent retiring income.  You can always trust Labor with superannuation”.


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All Comments   (22)
All Comments   (22)
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The senior administration official said that wealthy taxpayers can currently “accumulate many millions of dollars in these accounts, substantially more than is needed to fund reasonable levels of retirement saving.”

Beneath exactly what rock did the quoted cretin crawl from? It's not the government's job to determine a reasonable level of retirement savings.

In previous administrations, ridicule would be a sufficient answer to this idiocy. The Obama administration? I'm pretty sure the majority of them are reading that statement and going "Yup."
1 year ago
1 year ago Link To Comment
If your retirement is based on a large company retirement plan, like GM, Ford etc, or a federal annuity like civil service or the military, its cash flow can be discounted, based on life expectancy, to Present Value. Even without COLA's these can be very big numbers.
So, dust of your excel Fx key, use the PV function, add your independent, prudent citizen savings/IRA/401k etc.
Add further the recent Wikileaks like opening of offshore account info...
Duck and Cover.
I am thinking food and fuel supplies, well hidden in a modest rural home...
1 year ago
1 year ago Link To Comment
"Fabulous" It's not just for the Bravo network anymore.

We should demand a full audit of all elected officials and Civil Servants above the GS-14 level, and all Contractors receiving over $100,000/annum, and their near relatives. If assets exceed declared income less reasonable expenses then some "fabulous" haircuts would be in order.
1 year ago
1 year ago Link To Comment
Financial Repression is clipping the IRAs and 401Ks of America by 5 to 6 percent per annum -- going back since 2008.

The Wan is overreaching.

Cyprus and Europe have Buraq smelling blood.

1 year ago
1 year ago Link To Comment
Well, there's more to it than meets the eye, cuz an IRA is also a swell way to pass money across generations tax-free, that is if you die before your actuarial time since you have required withdrawals up to that point. Which begs the question of what you do for money afterwards!

As usual with issues of taxing "the rich" it's about getting the numbers right. Here in the big city a retirement income of $100k is not "fabulous", though the number I saw of $220k might be getting there. Hey how do you *get* $220k annual income out of investments earning a Bernanke return of 3%?

The thing is it's all BS as if they confiscated 100% of all such accounts, it wouldn't make a dent in any of the actual problems.
1 year ago
1 year ago Link To Comment
Americans should demand a balanced government account the same way they would balance their own bank accounts. Start cutting what is unnecessary until you get to the necessary and then find more efficient ways to provide the necessary. IOW, cut the FEDERAL budget to the bone, shunting anything not specified in the Constitution to the state level. Disband all the duplicate departments on the federal level, starting with the Department of Education- they don't educate a single child. I would even bet test scores would 'magically' improve.
1 year ago
1 year ago Link To Comment
But where is there to run? The logic behind the statement that "we are all Cyprus now" is that it is simply the tip of things.

Cyprus is bust because Greece went down. If Greece is the bow of the European Titanic then we're only better from being on the fantail of the same ship. There is time enough to listen to a stirring rendition of "Nearer my God to Thee" but we are essentially in the same boat.
1 year ago
1 year ago Link To Comment
Cyprus was another control fraud.

That's why the trading records for Greek bonds were deliberately expunged.

It's the oldest long con/ control fraud of record: over paying for interest bearing securities destined to default.

It's the ONLY way to explain the erasures, the payoffs, and the debacle.
1 year ago
1 year ago Link To Comment
The people who have ample assets have been warned. Just like there is a
burgeoning underground market for labor and materials to avoid excessive taxation financial assets will find a hiding place outside of cash, IRAs and 401Ks
1 year ago
1 year ago Link To Comment
"Obama: Okay. So, over the last 15 years, when you weren’t making $250,000, you would have been getting a tax cut from me. So you’d actually have more money, which means you would have saved more, which means that you would have gotten to the point where you could build your small business quicker than under the current tax code. So there are two ways of looking at it. I mean, one way of looking at it is, now that you’ve become more successful…"

There is so much fail in the quoted paragraph it is almost beyond comprehension.

Just where does Mr. President think the man who hired JTP is going to get the money to hire JTP's co-workers? It beggars the question if Leftisists are really stunted in their mental growth...
1 year ago
1 year ago Link To Comment
So listen now
You cashless cow
You didn’t build
What you were willed
By government
It’s we who sent
You all your wealth
And now your health
From birth to grave
And let you save
What you have earned
And now you’ve learned
Your IRA
Will help you pay
The debt you owe
For passing Go

1 year ago
1 year ago Link To Comment
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