The Secrets Of Greater Compensation

What would Democrats do if Trump were no longer president? Given that nearly every ounce of effort is directed at destroying the president, the answer is who knows? Nevertheless, I have a sneaking suspicion that battling income inequality is going to be high on the liberal their agenda for some time even after Trump is gone.

Liberals in the country want two things, the ouster of Trump by any means and more entitlements. Regarding the latter, the have-nots, represented by congressional Democrats, want to denigrate the most successful individuals in the country. Inequality is the refrain from virtually every downtrodden group in the country.

There are so many things the government can do to encourage “all boats to rise at the same time.” Why is it so important to steal money from those who have distinguished themselves? Should Americans be attacking other Americans for doing their job well and earning more compensation?

Our leaders ought to document the reasons why some people earn more than others. If they did they would see a number of interesting things. For instance, most big earners are intelligent and have attended college. A large number of them are creative, innovative and ambitious. Many are risk takers. The vast majority are quantitatively gifted and/or qualitatively advanced. Most successful people have personality characteristics that encourage others to follow them. In other words they are born leaders.

Successful people are not just focused on amassing a large bank account. They know that material benefits will follow success if they build companies and convert ideas into tangible items that people need. Earning large compensation is just a derivative of the actions of brilliant business people.

It’s true that many successful individuals are brought up in homes that include intelligent parents with great work ethic. They emphasize hard work and attaining good grades in school. They recognize the importance of attending college. In these households earning a degree is not debated.

It’s true that families in lower socioeconomic classes have greater challenges including less money and time (especially for single mothers and fathers). Putting food on the table may supersede deep conversations about getting ahead and excelling in school. It’s all this that makes it so difficult for urban kids to compete with affluent children.

But the search for equality should not entail tearing down successful people or organizations. The demise of exceptionalism will not result in the advancement of the middle class. The have-nots should focus on what the haves do and have done to get ahead. They should be instructed on which characteristics enable one to get ahead to make a better life.

What does it take to earn significant compensation? Does anyone really believe that a company will pay its employees a huge amount of money without requiring something in return? What does one have to do to convince his or her company to pay them high six figures?

The answer is that individuals would likely need to be responsible for generating revenues equal to at least ten times their compensation (a rough estimate). How easy would it be so sell that many products or services?

Earning a good living is not as difficult as it seems. But, not everybody can earn out-sized compensation. If you aren’t trained, have minimal education, aren’t ambitious and aren’t willing to work hard and be a productive contributor to the success of your employer, you will be doomed to mediocre compensation for life.

Income Inequality Arguments Are Bogus And Dangerous

Not long ago, President Obama instituted a tried and true gambit to garner political favor- he began to attack affluent Americas. As expected, our leader’s rhetoric gained traction with liberal members of Congress and progressives throughout the country. Income inequality is now the mantra of many people who have less than the “1%” in the United States. But some astute economists and social scientists believe this strategy is misguided and dangerous.


There are some basic questions that one should ask before adopting the president’s perspective. Do the affluent actively prevent the other 99% from improving their standard of living? No. Does incrementally higher compensation of the 1% come out of the pockets of the 99%? No. Does the income inequality argument foster class warfare? Yes.


What specifically is the objective of those who demonize the wealthiest among us? The obvious goal is to increase taxes on the 1% and distribute it to the 99% (via welfare and/or tax relief). Considering that the marginal federal tax rate is almost 40% for the wealthiest Americans, and they pay about 50% when state and local taxes are factored in, is it shocking that some people believe the wealthy are already paying their fair share?


One of the classic arguments against high compensation is “These people [the 1%] earn too much money. It’s selfish and un-American to want more.” Since when is there a limit on the amount of wealth a person may accumulate? I always thought that the free market decides the value of a worker. Now, philosophers and local government representatives have become compensation experts. The moral argument is another canard. I ask, do the scriptures say a person’s compensation be limited? And what about our laws?


Throughout history, aristocracies stole money from the lower classes. In France, the greedy upper class ultimately got what they deserved- revolution and execution because they were thieves. In Russia, the same story played out. The czars and the czarinas absconded property and money from their subjects. Once again, a revolution resulted, and now there are no more czars and czarinas.


The political implications of singling out an innocent group because they have a different skin color, a different God or even if they earn a high salary are inappropriate. Rallying the majority against a minority who is not breaking the law for political advantage is a dangerous precedent as we have seen in any number of situations throughout time.


There will be some who object to the position I have taken. But, consider that the vast majority of billionaires and millionaires in this country earned their money by working diligently. True, some inherited their fortune, and some broke the law (hopefully they will all be prosecuted). But, the vast number of affluent people in this country wake up every morning, go to work, try to be creative and think of new ways to earn money legally.


Notwithstanding this, some affluent people have advantages in the race for financial success. (Note: I totally understand and support those who have aspirations aside from the accumulation of money.) Children of wealthy parents usually do not pay for college. Parents may be alumni, increasing the probability that their offspring will be accepted to the most prestigious schools. And the list goes on.


But, the most important advantage of affluent children is that their parents emphasize the importance of education, good values and the ability to support one’s self. It is a given that these children will go to college and graduate, for the most part. Considering that a huge amount of money is available for scholarships and grants, the financial burden on middle and lower class children in not overly burdensome as we have recently learned (See my essay “The Real Cost of Education” published by Softball Politics).


Progressives have attacked affluence mercilessly over the past decade or so, as if every person with a high net worth is a felon. Of course, the economic crisis and the greed that fueled the recession did not help the reputation of the wealthy. They were targeted even more aggressively, as if every investment banker packaged and sold “crappy” mortgages. And, every financial person is a Bernie Madoff in-training.


The fact is that the group being persecuted pays the lion’s share of taxes. Every new dollar of ordinary income that they earn, results in 50 cents of new revenue for federal, state and local authorities. Every dollar of long-term gains is taxed at 20%. The 99% should hope that rich people earn more because the U.S. Treasury will collect more that can be used for entitlements and other benefits that accrue to the 99%.


The best outcome is for all economic groups to rise in unison. This has not been the case in recent years, but it should be the objective, rather than mass redistribution of wealth. In the first, everyone earns their keep. In the second, more people will become wards of the state.