Saturday, October 16, 2010

Business And Charity

Santa Claus with a little girlImage via Wikipedia
Wall Street Journal: World’s Richest Man: ‘Charity Doesn’t Solve Anything’: he could do more to help fight poverty by building businesses than by “being a Santa Claus.” ..... “The only way to fight poverty is with employment” ..... “There is a saying that we should leave a better country to our children. But it’s more important to leave better children to our country.” ..... He has contributed hundreds of millions of dollars to his foundation and has funded millions of dollars in joint-venture projects with the Bill and Melinda Gates Foundation.

This reminds me of the gay marriage debate. The last scientific figure I read had gays at 1% of the population. As in, one per cent of the people are biologically gay, they do not choose to be gay. That is who they are. Some put that figure to be 10%. I think it probably is 1-2%.

Men and women marrying works. It works for 98% of the population, or those among the 98% who choose to marry. But it does not work for everybody.

I agree that creating jobs is a great way to cure poverty. But the best economists say no matter how hard you try, 5% of the people will stay unemployed. The economy needs a 5% unemployment to stay healthy. Those 5% are not being lazy. There just are not going to be jobs for them.

Some people are going to be poor. Some people are going to end up homeless. There charity comes into the picture.

But what the Bill And Melinda Gates Foundation is doing is not charity. Tackling health care in the Global South is not charity. That foundation has challenged many long held prejudices about poverty in the Global South. You make these people healthy, and they go out there and get jobs and work hard and lift themselves out of poverty. You give them family planning options, and they have fewer children. They have not had the option.

People should go get jobs, but you would not argue that for primary education age children, would you?

Private business has its place. The private sector takes care of about 80-90% of the population. The public sector gives employment to the other 10-15%. And then there are the unemployed who deserve unemployment benefits. There are the poor who need charity and social welfare. It is important to also think of that bottom 5% to keep the social peace. That is also important.

Everyone should have access to education, health and credit at all income brackets all over the world. Most people don't, and that is a problem. Between the private sector, the public sector, the informal economy, the NGOs and the charity organizations, all bases should be covered.

There is no one size fits all.

Wall Street Journal: The Rising Threshhold for Being in America’s Top 1%: the threshold for the One Percent Club has more than quadrupled since 1980 ..... A salary of $80,580 in 1980 would be $207,920 in 2008 dollars. But that still is far lower than the $380,354 required to make the 2008 cut-off. ..... In 2008, the top 1% accounted for 22.8% of the nation’s reported income, up from 8.46% in 1980.

Why the Wealthy Are Paying Less of America’s Taxes: the rich are running away with a disproportionate share of the nation’s income but paying ever lower taxes. .... the rich are indeed paying a lower share of the nation’s tax burden. But that’s because the rich are losing income. And while their share of the nation’s earnings is falling, their average tax rate is rising. ..... the top 1% of tax returns paid 38% of all federal individual income taxes ..... The top 1% paid an average income tax rate of 23.27% .... the top 5% of tax-payers earn 34.7% of income and pay 58.7% of taxes.

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