Vanguard Founder Argues For Estate Taxes on US Wealthy

Photo by Alan Cleaver.

With 2009 coming to an end, soon we will enter 2010 – a fabulous year to die. In light of this forthcoming opportunity for every penny-pincher to die in peace, a liberal economic group is rallying for Uncle Sam to stake his claim in 2010.

In a recent press call, Vanguard founder & organization spokesperson, Jack Bogle made the following argument:

“I’ve known many people in the financial business, who said I’m really proud because I did it all myself,’” he said. “When someone has the temerity to say that to me, and a lot of people do, the first thing I say is, ‘Isn’t that wonderful. You did it all yourself. I think that’s terrific. I don’t know many people that have done that. But tell me, how did you arrange to be born in the United States of America.’”

He added: “Our birthright has created enormous wealth and stability of property and for us to think that we don’t want to pay our fair share of the costs running this nation when our young citizens, let us not forget, are dying in wars out there trying to protect democracy and the nation we built up, it seems to be quite outrageous.”

Although Mr. Bogle makes a strong argument for the taxation of America’s rich, a recent Mint.com blog post (the graphic can be seen below) reminds us of the effects of such an argument. If US Citizens owe Uncle Sam for our opportunities to succeed, why is the cost of that success so clearly placed on the shoulders of the most wealthy. Are the rest of our citizens not subject to the very same opportunity? This opportunity tax must not be based upon opportunity, but the successful use of the opportunity. Only those who successfully capitalize on the opportunity are subject to the tax. Maybe it is more of a ‘success tax’ than an ‘opportunity tax’.

If fact, those who benefit the most from Uncle Sam, those living on government assistance entitlement programs, should pay the most in taxes because they are receiving the highest concentration of opportunity. They are often provided with 100% of the resources (i.e. shelter & food) needed to pursue success. However, they are treated much differently. They pay no taxes at all. In fact, nearly 47% of Americans pay no federal taxes. Those Americans must live in a opportunity vacuum.

Although you certainly sense the sarcasm of my commentary, it is clear that we all owe taxes. The argument made by Mr. Bogle has some truth. As Americans, we are protected. We are provided certain infrastructure through which we operate our businesses. But where do we draw the line there? How much is too much? Is it right for 47% of Americans to have no tax liability, while others pay nearly 50% of their income in taxes?

Personal FinanceSoftware – Mint.com

via Do the Rich Owe America for Their Fortunes? – The Wealth Report – WSJ.