Guest Author: Don Wong Jr. is a serial entrepreneur focused on telecommunications and real estate development. He previously served as Vice President for the Asian Pacific Fund, a community foundation serving the needs of Bay Area residents.
Over the past week, I've seen and heard some very staggering facts and figures related to the wealthy in this country and abroad.
On Friday, I was listening to a discussion on NPR that turned to the national and state budget deficits. Eventually (inevitably?) one speaker suggested the need to increase taxes on the wealthy as a possible solution. Another speaker commented that California already has a fairly progressive income tax system: the wealthy (defined as individuals and families with $100,000 or more in adjusted gross income) earn 54 percent of the total income in the state, but they pay 80 percent of the personal income taxes collected by the state. Similar patterns can be seen at the federal level.
The Tax Foundation, citing a new report by the Congressional Budget Office, observes: "the 'super-rich,' the top 1 percent of households, are now paying a record 27.6 percent of federal taxes and a record 38.8 percent of income taxes. By contrast, the bottom 80 percent of households--representing 90 million households--pay 31.1 percent of federal taxes and just 13.7 percent of income taxes. In other words, the top 1.1 million American households pay a greater share of the income tax burden than the bottom 90 million combined. Indeed... it may not be long until the wealthiest households will be shouldering a larger share of all federal taxes than the bottom 90 million."
In another report on NPR earlier in the week, I caught the tail end of a discussion where the speaker was attempting to characterize the magnitude of the enormous wealth being created in China. The speaker referred to a Hurun Report, a listing of China's wealthiest individuals, to explain that China recognized its first billionaire only four years ago. The following year, the number of billionaires quadrupled to four. Last year, the number reached 15. This year, there are 106! The speaker qualified this number by observing that the 106 figure is probably low because of underreporting and the desire of many of China's super-wealthy to remain private. This trend is remarkable in that most agree that China is still in the early stages of its economic rise.
A New York Times article on Friday entitled "A New Breed of Billionaire" describes similar phenomenal wealth creation in other countries like Turkey, India, Mexico and Russia. The article draws parallels between these elites and the American elites at the turn of the 20th century, "And just as Rockefellers, Carnegies and Morgans once used philanthropy to smooth the rough edges of their cutthroat business reputations... local billionaires in emerging markets are trying to do the same."
In fact, these entrepreneurs are giving away significant portions of their wealth through their own foundations to fund health and education initiatives in their own countries. Jane Wales, president of the Global Philanthropy forum, is quoted as saying, "What we are seeing in these countries are people emerging from the private sector with tremendous wealth who are attracted to highly strategic philanthropy."
About the author: Don Wong Jr. is the Founder and Managing Member of David Ltd., a real estate development consulting firm providing real estate development services to major wireless communications companies. Prior to starting David Ltd., he served as in-house counsel to one of the national carriers and was a management consultant. Don is a member of the State Bar of California and a California Real Estate Broker.
Comments