Mark Cuban: The most patriotic thing you can do is "get rich"

http://blogmaverick.com/2009/08/13/the-most-patriotic-thing-you-can-do/

by aichcon • 17 years ago

28 88 17 years ago

blogmaverick.com

nazgulnarsil4• 17 years ago

demonizing the productive rich along with the hereditary wealth parasites is a fatal mistake for a civilization IMO.

dschobel6• 17 years ago

if they pay taxes and buy goods and services, why should it matter if the wealth is self-made or inherited?

jsackmann• 17 years ago

Most self-made rich people get there by (I'll bet you've heard this before...) making something people want. It's a rare buyer who buys something for $20 and values it at exactly $20 -- most buyers think it's worth a little more, or a lot more. That difference means that most purchases are not only beneficial to the maker/inventor (who is making money on the transaction), but also to the buyer (who believes their life will be better because of the transaction).

So, if you set everything else equal (purchase of goods and services, payment of taxes, etc.) the self-made rich are doing a lot more for others than the rich-by-inheritance.

ckinnan• 17 years ago

There's a huge difference between the rich and high income earners. The rich/wealthy often favor higher taxes because their income is from tax-free bonds or from control of assets, where income is deferred and usually part of a one-time transaction, like sale of a company, where taxes can be avoided.

High-income earners, on the other hand, often have negative net worth (school and housing debt). The rich want high taxes on the high-income earners because they don't want the upstarts competing with them for control of assets...they want to make it harder for the next wave of entrepreneurs to build disruptive or competitive businesses.

It is ironic, but taxes on new capital formation directly benefit those who already have capital.

mcslee2• 17 years ago

This is an astute and important point. I have always found it flawed that a middle-class American family making around $100K in income will pay more taxes than someone with $10M+ portfolio of municipal bonds.

With that said, I agree with Mark Cuban's philosophy here, and do not get personally upset with paying taxes.

I don't think the solution is to complain about taxes on high income earners. Rather, there just needs to be more pressure on instituting equivalent taxes for other forms of wealth generation (i.e. get rid of tax-free bonds).

nuweborder2• 17 years ago

Cuban is well known for speaking his mind, and he lived up to his reputation in this interview. Thats what we are all out here to do. And thats what this country is built on. Entrepreneurship. Creating something from nothing, and making the process better, more efficient, and productive each time.

Mark Cuban said that we need to make a boatload of money, but does not say how exactly to do that. At this point, you cant go by the Mark Cuban book. Dont try to duplicate what he did. Aside from the rare occassion of the German based ebay copycats whom later became reviered VCs, The European Founders (http://www.europeanfounders.com/index.html), you have to create your own path. What do you enjoy? Where is there a void in the market? Etc.

But, hopefully, you are not trying to "Get Rich Quick". Create your entrepreneurial venture off of passion and a genuine interest in what you are creating. Dont need it to blow up and produce millions over night, because you have to pay your electric bill. Thats not the way.

timr• 17 years ago

"And thats what this country is built on. Entrepreneurship. Creating something from nothing, and making the process better, more efficient, and productive each time."

I'm pretty sure that if this country was "built on" a concept, it was intellectual freedom. Entrepreneurship is perhaps a nice consequence of that legacy, but let's not confuse which end wags the dog.

nuweborder2• 17 years ago

Without entrepreneurship, there would be no Ford, no Microsoft, nor many other "must haves" that we enjoy today. Entrepreneurship created the automobile, the computer as we know it today, the website that we are discussing on right now, and all the startups that Y-Combinator supports.

Allow me to rephrase. Entrepreneurship is what our economy is built upon. Not intellectual freedom. Granted, intellectual freedom created peanut butter, the lightbulb and more. But no one was attempting to create these items for sales purposes initially. Peanut butter was invented by George Washington Carver, not Jiff.

And I wouldnt say that intellectual freedom is what built this county. As so many whom actually put in the man hours, hard work and physical suffering to build this country, did not have any intellectual freedom, and died in the process.

jhancock5• 17 years ago

"Make a boatload of money. Pay your taxes. Lots of taxes. Hire people. Train people. Pay people. Spend money on rent, equipment, services. Pay more taxes."

Don't most wealthy people hire lawyers and lobbyists to help them not pay taxes? Don't they also move jobs overseas to reduce how much they pay to their own economy?

Cuban seems to be living in a dreamworld.

pchristensen• 17 years ago

They pay much more in taxes despite the fact that they do this. By "pay more taxes" he means that the more money you make, the more taxes you have to pay. I'm sure that if you asked him, he'd say it's also your duty to pay as little tax as required.

jhancock5• 17 years ago

Have you been keeping up with UBS private banking trial? Many wealthy have access to loopholes or simply hide behind legal and banking confidentiality to illegally hide wealth.

Sure, most wealthy pay more on an absolute scale. Not always so on a relative scale.

Cuban's core rational is that rich people make things move, shape change. I agree somewhat. So it follows that if they make less efficient things more efficient, then removing all tax loopholes and aggressively going after illegal tax behavior would force these wonderful, really smart rich people to make the tax system and government spending of it more efficient. As long as they have a way around paying, they have no incentive to make the tax usage more efficient.

run4yourlives2• 17 years ago

They pay much more in taxes despite the fact that they do this.

I'm pretty sure Warren Buffet proved otherwise:

http://www.timesonline.co.uk/tol/money/tax/article1996735.ec...

dschobel6• 17 years ago

People don't move jobs abroad. Corporations (with a legal mandate to make as much profit for their shareholders as possible) move jobs abroad.

jhancock5• 17 years ago

"a legal mandate to make as much profit for their shareholders as possible".

I have never seen a law that says such a thing. Shareholders get to vote respective to the rights of their share class...That's about it. Other than embezzlement and other forms of fraud, a company can do as they like.

Locke16896• 17 years ago

To be sure, this happens, but I'm not sure I'd accuse him of living in a dreamworld...

For one, he's not saying you can't go through hoops to avoid paying taxes, he's saying don't do it. Of course, if we wanted to we could legislate to prevent this exploitation of tax law, although I'm not sure how far that would get without a considerable social realignment.

jhancock5• 17 years ago

Wasn't trying to completely dismiss Cuban on this. I simply do not see enough wealthy not using loophole that are available to them. This is why I say he's living in a dreamworld. Your right, to fix this, you have to legislate out all the loopholes. And this would take considerable social alignment.

dschobel6• 17 years ago

and your 3rd [thought] should be a recognition that in paying your taxes you are helping to support millions of Americans that are not as fortunate as you.

So just to clarify-- if you become successful, it was a combination of hard work and good fortune but if don't become successful, it was just poor fortune?

zackattack2• 17 years ago

I think so.

Consciousness is a gift through fortune. Through consciousness, you eventually come to a realization that you should work hard and endeavor to become successful. The less fortunate never reach such a level of consciousness.

dschobel6• 17 years ago

I agree that both are necessary but insufficient conditions independently but I've always been irked by the fact that the hard work/motivation part is always immediately dropped when you talk about average working stiffs.

It's like some bizarre fear that by admitting that some people are simply feckless and/or unmotivated you risk marginalizing everyone hasn't "made it" whereas in reality incentives are a huge part of the productivity equation (as anyone with a knowledge of basic economics can attest).

jonallanharper6• 17 years ago

Making a wise decision is a choice.

And, essentially the choice is whether to think or not to think.

The results of that choice are not a random twist of reality that's foisted on an individual... the results are the real and logical outcomes that can be expected using the application of probability.

noelchurchill• 17 years ago

I'm almost certain there there may be flaws in this though but:

Isn't there a limited monetary supply at any given time? So the richer I get, the less rich other people become. Even after I pay rents and salaries and everything else, if I'm richer than I was before, then there is less wealth available for everyone else.

phamilton• 17 years ago

http://paulgraham.com/wealth.html

he presents a great example of a couple of friends with beat up cars....

If 4 guys all have old beaters worth 1000 each. in total they have $4000 split evenly. Each has 25% of the wealth. If one guy goes, and decides to fix up his car, and his car is suddenly worth $3000, then suddenly he has 50% of the wealth, and the other three guys only have 16%. But the face value of the other three cars did not change.

That's what screws up the old 80-20 rule... you think it's unfair until you realize that the 20% created most of the wealth they control.

pragmatic• 17 years ago

If that were the case, we wouldn't have any more wealth that we did when the country was founded.

Don't confuse wealth with money.

thwarted• 17 years ago

See http://www.paulgraham.com/wealth.html

jonallanharper6• 17 years ago

You've highlighted one of the most important fallacies in the modern liberal's mindset, in my opinion...

PG touches on this: "The Pie Fallacy" in http://paulgraham.com/wealth.html

My 2 cents on it: Wealth is created. Currency is a limited resource that represents that wealth. The value of a single unit of currency is increased every time more real wealth is created. Wealth is created when goods or services that people actually want are produced.

Locke16896• 17 years ago

You've highlighted one of the most important fallacies in the modern liberal's mindset, in my opinion...

Completely unnecessary partisan drivel. The man asked a question and you made a useless generalization that shows, more than anything else, that you don't understand your opposition's socioeconomic philosophy.

However, you are correct, currency is simply a tangible representation of value. Wealth is not a zero-sum game. Consider a screwdriver. Physically, this screwdriver is simply its raw materials. However, by organizing the materials in the right way, this screwdriver becomes more than the some of its parts and increases its value accordingly. Thus, by selling this screwdriver for its perceived value, one can create wealth in the difference of costs vs. revenue. Of course, a simplistic example, but one that answers the question fairly well.

Edit: Maybe I should cite pg and get on the bandwagon...

iterationx2• 17 years ago

Imagine you're on an island with $100 split among five people and five goats, each goat is worth $20. But one guy has 2 of the goats and he breeds them until there's 50 goats. So now each goat is worth ~$2. So if the others had done nothing, they could still buy a couple more goats. So if you measure wealth by purchasing power it can increase for everyone.

jonallanharper6• 17 years ago

"[when that tax bill comes your thought should be]... a recognition that in paying your taxes you are helping to support millions of Americans that are not as fortunate as you."

Right, so I bust my ass in school, non-paid internships, contracting as much as possible, and 50 hour work weeks on my startup... and the reason I'm making money is b/c I'm more "fortunate" than the slob who is still playing video games in college after 6 years and the idiot who chooses to have kids he can't afford?

OK, got it... making wise choices makes you "fortunate"... and it's "unfortunate" when idiots who make poor decisions just don't make quite enough money to afford cigarettes, bling for his car, and health insurance.

Another serious flaw in this article, besides his inept philosophy: money stolen from us by the government is not "helping to support millions of americans"... it's being completely wasted by GovCo, for the most part, or at minimum used very inefficiently.

forinti• 17 years ago

It always amazes me how americans have the smallest social safety net of the developed world and are always blaming the unfortunate for eating up their taxes.

You also work more hours than workers in other developed nations and yet still can't stop going on and on about lazy people.

321abc4• 17 years ago

Not to mention the daily stories of Wall St hustlers stealing billions, trillions of taxpayer dollars being given away as welfare to corporations (which promptly pay out billions in bonuses) and trillions pissed away on murdering tens of thousands of people in other countries, but people are all up in arms when some single mother gets a $100 in food stamps, or a Mexican risks death in the desert to come mow your lawn. Or god forbid that health care suddenly becomes affordable. That would be a true outrage!

There's really very little sense of proportion in this country.

scott_s3• 17 years ago

Without the infrastructure around you, you would not have the opportunity to succeed. Much of this infrastructure is public - paid for and run by the government. Taxes are not the government stealing your income from you. It's the government pooling resources so the society we live in can continue to function.

There's more to success than making wise choices. It's also have the ability to even have that choice because of your surrounding environment.

solutionyogi13• 17 years ago

Wow, HN folks sure have a 'socialist' slant. Anyway, do you think you are getting your money's worth when you give away 30% of your income in taxes? Do you know how much of the tax money is spent of infrastructure? Look at this chart of US budget spending.

http://en.wikipedia.org/wiki/File:U.S._Federal_Spending_-_FY...

65% of taxpayer's money went to defense/social security/medicare-medicaid. Think about it for a moment. 65% of the money spent had nothing to do with infrastructure. Also, do you think that government is spending all the taxpayer's money carefully OR you think that government wastes tremendous waste amount of money? There are 3 ways to spend money:

1. Your own money on yourself. [You are very careful about getting your money's worth and you do spend generously] 2. Your own money on someone else. [You are very careful about getting your money's worth but you spend as little as you can] 3. Someone else's money on someone else. [Let's burn some money to heat up the place!]

Government falls in 3rd category and it's no surprise that there is tremendous waste.

That's why libertarians are advocating 'limited government', 'minimal taxes' so that people (you and me) can keep their hard earned money for themselves and spend as they see fit.

decode2• 17 years ago

"Right, so I bust my ass in school, non-paid internships, contracting as much as possible, and 50 hour work weeks on my startup... and the reason I'm making money is b/c I'm more "fortunate" than the slob who is still playing video games in college after 6 years and the idiot who chooses to have kids he can't afford?"

I don't know you, but I consider myself fortunate to be making more money than most because I was given, through no merit of my own, the ability and environment in which I could become educated and work towards goals that ended in lucrative work. As the child of educated, middle-class, white-collar people in a modern industrialized country, I have had thousands of opportunities denied most others in the world. If any of those things changed, for example if I happened to be born 300 years ago or if my community never taught me the importance of education and hard work or if I was born in a place where subsistence-level living is the norm, I would be in a completely different boat. If you have the ability to make wise choices that effect change in your life, then yes, you are fortunate.

On a side note, this sort of disdain for the poor is disturbing to me. Do people really think poor people choose to be so? Nobody wants to be poor.

miked• 17 years ago

Do people really think poor people choose to be so? Nobody wants to be poor.

That no one wants to be poor is obvious enough, but it's hardly the same as whether or not they choose to be. The poorest person I know has an IQ of 186 and a PhD in chemistry. He chooses to live on government disability and not work, even though he's quite capable of doing so. But he he shares a quality I've noticed in all of the poor people I know personally: a belief the world owes him a living. Everything in his screwed-up life is someone else's fault, never his, no matter how much damage he inflicts on others.

That isn't all poor people, but it's a lot of them.

mikeryan8• 17 years ago

Wow that's cold.

It's a bit ugly that you can loop everyone that can't afford healthcare, mental health issues or drug addiction into a single bucket and dispose of them.

Those who can afford to spend 6 years in college playing video games, rarely are the ones who are doing it on the gov't dime. Its the kids that grow up in crappy underprivileged neighborhoods with poor school systems and no guidance are the ones that need help. But hey its their parents fault right?

You sir, compassion less, and cold spirited and are the one I can do without.

jonallanharper6• 17 years ago

And, you sir, live in a false reality.

I bet you'd love to tell us how socialism would work if we "just gave it a chance." Let me guess... it "hasn't been implemented properly" yet right?

solutionyogi13• 17 years ago

Here's the problem with your argument. How are you going to make sure that government helps those poor people (the one you identified in your post) and not others? How are you going to make sure there is no waste/minimal waste? How are you going to make sure that lobbyists/corporations won't lobby the government to get this additional taxpayer's money and use it for their own instead of helping the poor? Where is the accountability? Show me one government program which has achieved its stated goal without wasting huge amount of taxpayer's money.

Let me give you an example. NY State auditors recovered around 270 million dollars in Medicare fraud/waste between Oct 07 to Mar 08 (6 months). This is only one state, think about the amount of fraud/waste happening in other states. In fact, they plan to spend 90 million dollars to prevent this fraud/waste! Why give government money so that they can waste it and then let them spend more money so that they can prevent the waste?

Link: http://www.nysun.com/new-york/state-recovers-269m-in-medicai...

321abc4• 17 years ago

"Patriotism is the last refuge of a scoundrel." -- Samuel Johnson

"The most patriotic thing you can do is get rich." -- Mark Cuban

Sounds about right.

anamax4• 17 years ago

You're mis-reading Johnson. He's not saying that patriotisim is bad - the word "last" is important.

Asimov's "Violence is the last resort of the incompetent." has a similar trap for those who don't read critically.

decode2• 17 years ago

He makes an argument for making money, but not for getting (or being) rich. What societal advantage is there to one person amassing wealth? It seems like Cuban is saying that if you create wealth, you can pass it on to others. So wouldn't that mean that it would be better for society if you were just a conduit for wealth, paying your employees, contractors, and suppliers as much as possible?

It seems like the most beneficial thing would be to "Hire people. Train people. Pay people. Spend money on rent, equipment, services." but not skim a bunch off the top for yourself.

iterationx2• 17 years ago

Getting rich by creating American jobs that manufacture goods that we sell to Asia and re-balancing the trade imbalance would improve the dollar strength and create American jobs, that'd be ok. If I get rich by putting Applebees out of business because I made a slightly better boneless buffalo wing, nothing would be gained.

zackattack2• 17 years ago

I would also like to point out that Cuban has incentives to have his fan base think of him as patriotic: he wants patriotic people to consume his NBA entertainment and think well of him.

Just because someone posts something on their blog, does not mean it is what they truly believe. It is only what they want to appear on their blog.

Mark Cuban: The most patriotic thing you can do is "get rich"

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