Scoot: Is spending money on booze and women the reason you’re not rich?!

Scoot
December 04, 2017 - 10:52 am

Do you envy those Americans who have money to invest?  Have you wondered what you can do to become rich in America?  Republican Senator Chuck Grassley thinks that if you don’t have money to invest and join the ranks of the richest Americans, then you’re spending too much money on the wrong things.

In an interview on November 29th, Senator Grassley said:

“I think not having the estate tax recognizes the people that are investing,” Grassley said, “as opposed to those that are just spending every darn penny they have, whether it’s on booze or women or movies.”

Grassley gave that explanation for why so many Americans are not rich when he talked about his support for the new Republican tax plan, labeled the “Tax Cut and Jobs Act.”  The senator favors the new Republican plan that would double the exemption from $11 million a married couple could leave to heirs to $22 million.

The estate tax has also been called the “death tax,” and it has long been argued that the tax is unjust because it amounts to a double tax on income.  The income was taxed as income and then it is taxed again when it is inherited.  I think that’s a good argument, but this blog is not about whether the estate tax is fair.  It is about the claim that Americans are not rich because they spend too much money on booze, women and going to the movies.

Is it really that simple?  Senator Grassley’s comment about why more Americans are not rich parallels Hillary Clinton’s famous campaign reference to Trump supporters being “deplorables.”  Are you not rich because you spend too much money on booze, women and movies?

There are great success stories about Americans, and even immigrants coming to this country, that started with literally nothing and build fortunes and empires.  However, many of the stories used to demonstrate that anyone could become rich in America start with an individuals borrowing money from their family.  Wasn’t the advantage of family money the first catalyst to the process of becoming rich?

President Trump has talked about starting from nothing to become a billionaire.  On the campaign trial, presidential candidate Mitt Romney told the story of the owner of a popular restaurant franchise building an empire from nothing but an idea for a single restaurant.  What was not part of the story was the fact that he borrowed money from his father to start his first restaurant.

Credit goes to anyone who builds an empire from a loan.  Many people have gotten loans from their family or inherited money and quickly lost it all because of a bad idea or poor decisions, but there should be no doubt that the opportunity of start a business with money from family is an advantage.  And maintaining and growing a successful business from an idea is a challenge not everyone is fit to take on.  Another factor to consider is that anyone who is part of a family with money also probably had access to a better education and may have had great business role models to follow.

Senator Grassley’s comment that he supports changing the estate tax, which benefits the rich, because those who aren’t rich have made the careless decision to spend money on “booze, women and movies” dismisses the daily efforts of the millions of hard-working individuals who have great ideas – if only they had a family to lend them the money to get started. 

Getting a loan from a family member might require fewer financial qualifications than trying to borrow money from a bank.  Many great ideas may not pass a bank’s strict requirements for securing a loan or showing a business plan showing why an idea will be successful.  Not everyone was onboard with the idea behind FedEx.

Lawsuits have been filed because someone took someone else’s idea and made a fortune.  Doesn’t that demonstrate that it takes money to make money?

It is true that many people spend too much money on booze, women and movies; and I have not always been good with money decisions in my life.  However, implying that the people in this country who are not rich are not rich because they spend “every darn penny they have, whether it’s on booze or women or movies” is an insult to hard-working Americans.

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