April 20, 2011

Don't Sock it to the Rich

Read/Post Comments (2)

Bob W. Rush, of Mansfield Missouri, submitted the following “To the Point” article to the Springfield News-Leader which was published on April 18, 2011:

Here's a simple story: Mr. Gotrocks became a millionaire by making and selling widgets. The president raises Mr. Gotrocks' taxes because he makes more than $250,000. Where does the millionaire get the extra money to pay his tax increase? He raises the price of his widgets. Who buys the widgets? You and I, the people who make much less than $250,000. Yet, most of us praise the wise president for socking it to the rich. The end.

Following is my reply to Bob Rush’s simple story (also submitted on April 18):

The wise President raised Millionaire Gotrock’s taxes and wise millionaire Gotrocks never considered raising the price of the widgets he sold, because he knew that raising prices would lower the number of widgets sold, and lower the respect his customers have for him and his product. Innovative Gotrocks took advantage of the skilled workers temporarily unemployed, and hired enough of them to diversify his business, add a new product to the market, and felt good that he was able to do his part in helping the country get out of a deep hole.

The beginning.

Posted by Peggy S. Hedrick at 12:59pm

Click here to comment:

To the unpublished (unless you choose to publish) comment received:. I DO believe that my scenario works, and it is not a fairy tale. There are examples all around us. And, if I had a million dollars, and a successful business –that is what I would do. And the reason one shop after another is closing at malls and even one monster business after another in the larger market all over the country—is because some Gotrocks couldn’t see beyond their noses, and refused to improvise, and priced their products out of the market! Businesses that are trying to adapt to the circumstances, as often as not, are surviving. And more than a few Gotrock businesses got where they are because they know how to bounce back.
Posted by P.S. Hedrick on 4/20/2011 at 3:16pm

Hi Peggy---plz publish this wherever you can.

Here's a "simple story" for Mr. Rush:

Mr. Gotrocks should move to Australia. Aussies on average buy a lot more widgets than Americans--- and pay more for them.

Here's the facts: Their minimum wage is more than twice what ours is---$15 per hour vice $7.25 in the U.S. ( BTW, the dollar exchange rate is at parity.) All Aussies make enough at their one job to buy a new car, a house, and lots of widgets. Because of this, the average wage-earner has more dignity than the American worker, which neither Mr. Rush nor Mr. Gotrocks probably care diddley-squat about---but what they would indeed care about is that small businesses in Australia are flourishing. (It happens I know a few owners.) The whole economy there is booming. House prices, car prices and widget prices are soaring. They did not experience a recession. There are probably as many Aussie tourists at Disneyland as Americans. And don't assume this is only because they are selling their minerals to China. The United States has far more natural resources than Australia, and is selling them as fast as it can.

Oh yes….Mr Gotrock's tax rate would increase substantially because everyone pays more taxes Downunder, but he would still be able to tuck away a tidy sum in his Swiss bank account because he could raise the price of his widgets!

And one more thing for Mr. Rush: Please, please don't play that old Yankee Doodle tune, "Well why don't you just move down there if you like it so much!" I love America, and most Americans. I just wish we could dump some of the tired old capitalist myth and dogma--- and live up to the "Dream."
Posted by Wally Rees on 4/21/2011 at 11:35am