Send a Tweet
Most Popular Choices
Share on Facebook 25 Share on Twitter Printer Friendly Page More Sharing
OpEdNews Op Eds    H3'ed 4/27/18

What "Toys R Us" Teaches Us About Taxes

By       (Page 1 of 2 pages)     (# of views)   No comments
Author 2553
Message Sam Pizzigati
Become a Fan
  (2 fans)

From Counterpunch


(Image by JeepersMedia)   Details   DMCA
- Advertisement -

By the time you read this, your favorite hangout as a kid may have gone kaput. Toys "R" Us, the iconic global retailer, recently announced its impending demise after over a six-decade run.

That sad news no doubt has many of us waxing nostalgic. All those aisles piled so high with games and action figures! For kids, a veritable miracle.

But this miracle, according to the economic orthodoxy that dominates our times, should never have happened.

- Advertisement -

Conservative pundits and politicians have been insisting for a generation now that entrepreneurs only start exciting new businesses when governments "back off." So governments have backed off. At every level, they've deep-sixed regulations and cut taxes on rich people.

High taxes on high incomes, the reasoning goes, discourage entrepreneurship. No one with a great idea for a new business is going to start that business, conservatives argue, if Uncle Sam is just going to tax away the rewards.

The same goes for investors, they say. They're not going to invest in "job-creating" enterprises if high taxes threaten to eat away at their potential earnings.

- Advertisement -

This conservative take on taxes totally muddies how our economy actually works. Case in point: the story of Charles Lazarus, the founder of Toys "R" Us.

Lazarus, a World War II veteran, noticed soon after the war that all his veteran friends were settling down and raising families. Products for kids, Lazarus figured, had a great future, and in 1948 the budding 25-year-old entrepreneur opened a storefront outlet for children's furniture.

Lazarus soon added toys to his store's selection and quickly saw their awesome sales potential. Parents, he realized, only buy a crib once. But they replace toys year after year. By 1957, Lazarus had opened his first toys-only store. By the mid-1960s, his one store had become a chain. Lazarus became a classic entrepreneurial success story.

All this success happened in an economic environment that bears little resemblance to ours. In America's postwar years, high incomes faced high tax rates. Income over $200,000 for a single earner faced a 91 percent tax rate throughout the 1950s. In 1980, the year Ronald Reagan won the White House, America's most affluent still faced a 70 percent top tax rate.

These high tax rates didn't seem to undermine the entrepreneurial spirit of Charles Lazarus. He built his toy business right amid them. And Lazarus didn't build that business out of the goodness of his heart, either. He saw himself as a businessman out to make a buck.

"If you're going to be a success in life, you have to want it," he would later tell Forbes. "I wanted it. I was poor. I wanted to be rich."

- Advertisement -

But "rich" will always be relative. Yes, Lazarus did face high tax rates. But so did everyone else in his lofty income tax bracket. He remained, after taxes, rich by the standard of his day. He felt rewarded enough to exercise his entrepreneurial talents.

Next Page  1  |  2

 

- Advertisement -

Rate It | View Ratings

Sam Pizzigati Social Media Pages: Facebook page url on login Profile not filled in       Twitter page url on login Profile not filled in       Linkedin page url on login Profile not filled in       Instagram page url on login Profile not filled in

Sam Pizzigati is an  Associate Fellow, Institute for Policy Studies

Editor,  Too Much ,  an online weekly on excess and inequality

Author, The Rich Don't Always (more...)
 

Go To Commenting
The views expressed herein are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.
Writers Guidelines
Contact AuthorContact Author Contact EditorContact Editor Author PageView Authors' Articles
Support OpEdNews

OpEdNews depends upon can't survive without your help.

If you value this article and the work of OpEdNews, please either Donate or Purchase a premium membership.

STAY IN THE KNOW
If you've enjoyed this, sign up for our daily or weekly newsletter to get lots of great progressive content.
Daily Weekly     OpEdNews Newsletter
Name
Email
   (Opens new browser window)
 

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

Presenting America's Ten Greediest of 2013

A Daring Bid to Stomp Out CEO Pay Excess

Are Heartless People Simply Born That Way?

Counting Dollars the Rich Want Uncounted

In an unequal America, empathy, not just housing, has become too pricey

The Mess on Our 'Information Superhighway'