Do you agree? Do you believe it is acceptable to cut these families down to size by taxing much of their wealth away? Do you think it is acceptable for anyone to accumulate a lot of money by doing nothing? Be careful, that’s a trick question.
Let’s say you have $2,000; perhaps a tax refund and decide to invest. In addition, now that you are age 25 it seems like a good time to start saving for the future so you add $100 a month to your nest egg. Fast forward and you are ready to retire at age 65. During those years you have invested a total of $50,000, but you have $255,100 (at only a 6.5% return). You didn’t do a thing to earn that $200,000 plus.
But let’s say you are one of the really fortunate few Americans and rather than starting with $2,000 you inherited $5,000,000. Using the same assumptions as above, at age 65 you have $67,076,374. You gained over $62,000,000 and did nothing for it … except take risk.
Are you envious of the lucky stiff in example two? Are his or her riches unacceptable even though both individuals did nothing to earn the bulk of their money?
What about the person who ran a business for forty years and sold it for $100,000,000 at age 65? Do we look at the $100 million as fair game for the rest of us ignoring the economic benefits created for many people over that forty years?
Whose riches are unacceptable to whom?