I started regarding HENRY when I read The fortune article “Why the ‘rich’ aren’t feeling so rich“. It referred to a “Message from HENRY” published around tax day in the Wall Street Journal. HENRY is an acronym for high earners, not yet rich. At first blush who cares about these people?
The reality is that we all should.
While they are high income earners making $250,000-$500,000 HENRY’s are not conspicuously wealthy. While their largest expense is taxes, their second largest expense is their children; as a result, many HENRY’s will have retirements that hardly reflect their income during their working years. HENRY’s are doctors, lawyers, contractors, consultants and business owners.
HENRY’s are the children of struggling emigrants and the children of the middle class.
Although there are only 5 million of them HENRY’s account for a disproportionate share of taxes, contributing 17% of all federal taxes at a time when fully 40% of the country pays no taxes whatsoever.
Why should we care? Because while everyone has had their eyes on the jobs lost in the financial sector and big names like GM, the HENRY’s are the drivers of the economy, controlling 15% of all consumer spending and stoking the engine of job growth in America. The HENRY’s own half a million small businesses and pay $100 billion in corporate taxes. Two-thirds of job growth is the result of the business activity of HENRY’s.
Let me say this again, the HENRY’s create jobs.
About a month ago I asked the question is it time for ATLAS to shrug? In response to the passage of health care reform, not because I feel that health care reform is a bad idea but because I question the wisdom of targeting a small segment of the population for additional taxes to fund a proposal the fruit of which all will enjoy. If we think of HENRYs as ne’er do wells, perhaps it is easier to believe that they should pay their fair share and they aren’t doing so already. Should a family that pays $100,000 in taxes be asked to pay more?
I am sensitive to the needs of small business. My landscaper is an emigrant who readily admits he would make more money and have fewer hassles if he had a job, but he tells me he is an entrepreneur. He employs a dozen guys. He is taxed on the supplies he buys for his business and is taxed on every service he provides for his customers. He pays FICA taxes, corporate taxes, state income taxes. corporate taxes and a roughly 7% tax the state charges called the gross receipts tax. That tax is what it sounds like: a tax paid on all receipts before legitimate business expenses are taken out.
I think we need to look at how we do things in America. I do believe that taxes are the price of success in America, but we all, regardless of income level have responsibilities in a civil society. Goose HENRY lays plenty of Golden Eggs for our country we need to make sure we don’t support policies that kill it.
Please comment.
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