Opinion

Felix Salmon

Sob story of the day, Glen Esnard edition

By Felix Salmon
September 14, 2010

Somebody should tell the senior executives of Grubb & Ellis that their president of capital markets, Glendon Esnard, is mad as hell, he’s not gonna take it any more, and that in fact he is seriously considering leaving the country altogether:

Apparently our president thinks that living in America is so wonderful that we will never leave, despite being directly attacked and held responsible for the political class’s inability to constrain its desire to buy votes with our money. He should think again.

“We”, here, in case you were wondering, is that beleaguered and demonized class of people making more than $250,000 a year. They We are being vilified by no less than the President of the United States himself — “for his own personal gain”! And let me tell you, they we are suffering. Take poor Glendon himself:

I have no funded retirement plan save Social Security, if it is there when I need it. I have no guarantee of permanent health care. I am paying off school loans for our three children. A meaningful number of my friends have lost their jobs, and all who are still employed, including my family, have taken significant pay reductions. My brother-in-law has been told to take every Friday off with a 20% cut in pay, but his work load hasn’t changed. Everyone I describe here earned over $250,000 per year.

I’m sure that Glendon, with his 30 years of commercial real estate experience and his extensive knowledge of both investment sales and the alternative real estate investment market, has managed to amass a decent nest egg by this point. Still like any good socialist, he still hankers for a defined-benefit pension and a guarantee of permanent health care. He’d surely love it if the government paid for college education, too. Probably that’s why he’s thinking of leaving the country: he’s decided that he wants to move to Sweden. Or maybe France.

Comments
27 comments so far | RSS Comments RSS

You’re doing this on purpose now, Salmon :-)

Posted by ottorock | Report as abusive
 

I am confused as to what he wants.

Posted by david3 | Report as abusive
 

What the hell is Esnard talking about? He’s AREADY left the country. He’s in Newport Beach California, for cryin’ out loud.

Posted by EricVincent | Report as abusive
 

If I were Mr. Esnard, writing a letter to argue the point that my family isn’t wealthy, I might look for a closing address other than Newport Beach, California. Mr. Esnard lives in one of America’s wealthiest towns, in a gated community where a house down the street is on the market for $1.3 million (public information). Based on his letter, his household income is 5x the median. There may be a decent argument out there that the wealthy should pay lower taxes, but I don’t think there’s a decent one that Mr. Esnard isn’t wealthy. The game of pretending that very rich people are part of the middle class grows more tiresome the more debased the American political debate about wealth and taxation becomes. It’s hard for me to muster sympathy for people who are really struggling with their private school bills. Also I don’t recall Mr. Esnard asking the government to butt out of his real estate market when it was massively subsidizing his earnings by inflating real estate prices with cheap leverage. Please post it if I missed that letter.

Posted by najdorf | Report as abusive
 

I am starting to rethink my stance on ‘going Galt.’ It isn’t at all a bad idea: by removing some of the most reality-challenged among us from places of influence and power, it will have significant positive externalities.

Go, Esnard, go. For the love of all that is holy — go.

Posted by wcw | Report as abusive
 

Wait–do the friends who are unemployed make more than $250K too? Is he supporting them (letting them live in his pool house, perhaps) and so cannot spare anything extra for the IRS?

If he’s doing God’s work it should be taken under consideration.

Posted by LadyGodiva | Report as abusive
 

Simon,
At least he acknowledges that he is a lemon ;-)

Posted by LadyGodiva | Report as abusive
 

Dang, he’s making $250k and he can’t even pay for his kids to go to college without loans?!?!?

Oh, wait. He lives in Newport Beach. Not simply rich, STUPID rich.

Posted by TFF | Report as abusive
 

If he’s a US citizen. leaving the country won’t do it; he’ll still have to pay tax unless he gives up his citizenship.

Posted by comment1 | Report as abusive
 

I bet you have to try really hard to struggle to get by with only $250,000 a year.

Posted by drewbie | Report as abusive
 

The comments in response to that letter are great too. Particularly one suggesting all these poor, underpaid, overtaxed men move to Thailand for the quality of life (!) and while they are there, find themselves a Thai bride. Why have an English-speaking bride who can argue back when you’re being a moron and complaining about how hard done by you are on a quarter of a million a year? Go find yourself a Thai bride who’s escaping poverty herself and who’ll just nod and smile when you make an overpaid, overopinioned, underthought fool of yourself.

Posted by Mostannoyed | Report as abusive
 

I was surprised most people who commented at the paper agreed with him that HE was somehow oppressed because he had bills and could barely pay them and yet might have to pay taxes.

The rich pay accountants (or become hedge fund managers) to find loopholes so they pay a lot less tax. If you make 250 taxable then you are making way more then 250k!

Most of us have saved all our children’s lives to pay for their school and the kids will have to work to fund what may be missing. That is real life. I have never made over 100k and managed to never overextend myself, yet put money away for retirement and my son’s higher education and never once complained about paying taxes, and I live in that overtaxed socialist/communist country North of you…

Those same opportunities are available to American families, but you have to have a brain in your head first and not spend every dime on cars, homes, jewelery and prestige. He wants to keep up with the Joneses and this tax is making that difficult and so he whines no fair! Everyone else is sucking his life’s blood!

Esnard’s reality is he is feeling the pinch because he relied on his mortgage and other tax breaks which may no longer be forthcoming to help fund his lifestyle and mortgage and seeing his fellow rich lot take a few minor pokes he fears his overspending might catch up to him. And so he is angry as hell and not going to take it anymore!

What he and many people I know need is to get the rug pulled out from under them so they can experience joblessness, poverty and the never ending cycle once you land there and the need to taste the overwhelming agony of not being able to feed your family and having to take handouts and handups and stand in food lines.

Handouts and hand ups available only because the Government had to step in and see that people don’t despair and go hungry while others worry about their taxes being too high to fund such things.

Yes I am preaching. I have an abscess tooth and people like this give me the same kind of pain that permeates the being. I had a girlfriend who used to say she was poor when she couldn’t afford a second Sandals vacation … and whose husband loved to tell me he probably paid more in taxes then I made and so attempted to make the same whiney argument this fellow is trying to make. She is now whining to those in her own class. (and by that I mean class of elitist, selfish, boorish snobs, although she thinks otherwise)

Posted by hsvkitty | Report as abusive
 

Well said, hsvkitty…

The median household income is around $50k. If you can’t make ends meet when you are earning twice that figure, you are doing something seriously wrong.

I have no philosophical objection to people who earn large paychecks, at least not if they are doing something useful, but only a complete loser would cry poor when making *5* times the median income. Or more.

You think you earned that money with your brains? Try starting over in India and see how far your brains take you there. But first renounce your citizenship.

Posted by TFF | Report as abusive
 

Mr. Esnard shouldn’t whine but talk like a man.

Still, time was, the successful people of the world flocked to America.

“Mick Jagger Recounts Fleeing High Tax Rates in England, Success ‘Resented’ Unlike in America”

http://newsbusters.org/blogs/brad-wilmou th/2010/05/21/mick-jagger-recounts-fleei ng-high-tax-rates-england-success-resent ed-

America is supposed to be the land of boundless opportunity, not the land of ugly envy. Hasn’t a century of socialist experiments taught us where wealth redistribution leads?

Posted by DanHess | Report as abusive
 

I’m willing to bet that Mick Jagger was facing a higher tax rate than Glen Esnard.

I do agree that “wealth redistribution” is the wrong tack to take. The Bush tax cuts reduced taxes on pretty much everybody, but they also created an exceptionally steep taxation curve beginning around $50k (FICA tax but no income tax) and continuing up to the Social Security taxation cap (household income of $100k-$200k). Depending on your exact situation and your state of residence, your marginal tax rate is between 40% and 50% on your wages in this range.

Higher taxes are needed to pay the bills, however exceptionally high MARGINAL tax rates are very damaging. The solution (as Reagan found) is to broaden the tax base.

Posted by TFF | Report as abusive
 

I’ll put that in practical terms…

Last year I picked up a part-time job paying a solid $15k. As a result of that job and the associated expenses, our discretionary income has fallen by $5k to $10k over the last year.

Those 50% marginal taxes are a killer.

Posted by TFF | Report as abusive
 

“Hasn’t a century of socialist experiments taught us where wealth redistribution leads?”

You mean like the failure of Taiwan in the wake of land redistribution? Or the hell-hole that is modern Sweden? Perhaps you refer to the unfair way in which Norway decided to transfer its national oil wealth to all its citizens rather than a select few, and the disastrous effects that has had on the country?

Oh, perhaps you mean the way that countries that have NOT imposed much wealth redistribution (Brazil, Mexico, Nigeria) have done so well in the post-war years?

Posted by name99 | Report as abusive
 

@name99 –

Wealth redistribution works? Let’s have a look at those countries, shall we?

Taiwan — Similar person income taxes to U.S., much lower corporate income tax

Norway — Tiny population, vast oil. Not exactly our situation.

Sweden — A highly educated, homogeneous population helps, as does a Lutheran work ethic, as compared to most places where everyone tries to take advantage of the system. Still with all these advantages, they had to scale back their welfare state after their 1990s financial crisis. Fact: Did you know interest rates briefly hit 500%?

Brazil — A bloated public sector crippled the country and led to rampant inflation. Lack of property rights for the half or more of the population that is ‘unofficial’ (the Hernando de Soto problem).

Mexico — Hey this is supposed to be my example! They were socialist for much of the 20th century!

Nigeria — One of the most corrupt countries on Earth. After thieves in government are done, there is nothing to distribute.

Got any other examples? I think we ran out!

Posted by DanHess | Report as abusive
 

DanHess, I think you are undermining your own example. Where exactly does Mr Esnard think he’s going to move to? The point is, running a civilised country requires taxation. Every civilised country in the world has a signficant tax base (and that includes the US). And actually, amazingly enough, some countries do things slightly differently to the US and sometimes, incredible though it may seem to you, they manage to do some things better.

As for Mick Jagger, the anecdote you use to prove your point happened 40 years ago when top rates of tax were over 90% (my heart still doesn’t bleed for him, btw). Not what Mr Esnard is facing. And actually, Mr Esnard does have some options, come to think of it. He probably would face lower taxes in Nigeria. He’s welcome to try it out there and see if he can begin to see the value of participating in a functioning civil society.

Posted by Mostannoyed | Report as abusive
 

The issue is not taxes per se. Taxes toward genuine *public* goods are one thing (police, infrastructure, medical research and many other things). Taxes for the sake of redistribution and social engineering are entirely another. Those cases haven’t worked out so well in the past (see every nation that ever fell under the spell of redistribution). Even in Europe with its ‘soft’ redistributionism we have seen decades of relative stagnation. I am half Austrian and I have seen it. The motivation to become a ‘big success’ was just not what it has been here.

When wealth is taken from the productive to give to the unproductive, not only is it wrong — it tends to ruin economies. One would think that a whole 20th century of suffering from failed redistributionist policies would have taught us a thing or two. But we tend to be pretty dim to history.

Posted by DanHess | Report as abusive
 

All you whiners saying that he shouldn’t be whining that Esanrd can’t get by on $250k need to realize that the more money the gov’t takes the less Esnard will have to spend. Those bills Esnard pays are keeping people employed, probably more so than wasted gov’t spending.

Posted by bernandoo | Report as abusive
 

Okay, people. Most of what the government needs the money for is entitlement programs. Programs that were supposed to pay for themselves. But they didn’t. Yes, he makes a lot of money. A lot more than I do. But he worked for it. There is this weird mentality that economies magically happen. They don’t. If starting and growing a business was easy, everyone would do it. It requires work and the best work gets the best rewards. These people aren’t exploiting the poor, they are the only reason there is an economy at all. Unfortunately, our tax system says, “Congratulations, you are successful, pay us more money so we can benefit those who didn’t work as hard.” That is wrong. Those of us who realize this understand that those who benefit without putting money in are parasites. And if we eliminate the free market like some on the left want to do, it will still lead to exploitation. Think about it, without money there is only power. What if someone you know doesn’t like you is in charge of the local ration house? At least in the free market, the money is impersonal.

Posted by Ravens_talons | Report as abusive
 

I’m the opposite of Esnard. So far this year, as a freelance graphic designer, I’ve made less than $10K. I live hand to mouth, and I’m thrilled if I find a $5 bill in a pocket of jeans I take out of the dryer.

At $250K per year, Esnard is certainly giving more to the government in annual taxes than I’ve grossed in the last TWO years — probably more.

I’ve met really rich people before. Esnard is not rich. At his salary, he may have a nicer home and some nicer stuff than I do, but he’s definitely not “rich.” At his salary, neither he or his kids are “set for life”.

The contempt that many commenting on this blog have for Esnard is sad. They envy his success because they themselves have have failed — either by choice or bad luck or… whatever — to achieve the relative success Esnard has.

Do some simple calculations on a 1040 form and figure out how much the government SEIZES from Esnard’s annual salary. Then calculate your own. Odds are the state and federal government SEIZES much more money from Esnard than they do from the complainers on this page.

Esnard is right. This crowd in Washington – who have voted THEMSELVES salaries nearly 4x the national average – ENGINEER and DEPEND on our contempt of people like Esnard.

We are nothing more than “useful idiots” to the bloated, self-important, drunkard back-slappers who continuously get elected in Washington and in State Houses across the country. They FEED off of your contempt of the “Esnards” of the world. They are parasites who live very comfortably and produce NOTHING but class envy and anger.

Government is inefficient, ineffective, virtually insolvent and divisive. They have betrayed our trust, but they still have the authority and power to seize our hard-earned money at every turn — sales taxes, excise taxes, fuel taxes, property taxes, income taxes, death taxes, capital gains taxes, endless fees to drive our cars, park our cars, use “public” transportation. It goes on and on.

Esnard isn’t the villain here. Esnard doesn’t have the POWER to seize your income, or put liens on your bank accounts and property, or any of the methods our out-of-control government has to take our money.

I wish Esnard and the rest of us the best of luck. We need it.

Posted by AtomicMug | Report as abusive
 

“And let me tell you, they we are suffering.”

Thank you Felix. Your words and colorful grammar are so profound that I have reconsidered my position entirely. Of course the $250k+ earners (I’m not in that category) aren’t actually paying enough for the (failing) social programs in this country and should be taxed more to make things right. Certainly the proposed federal furloughs will pay the bulk of our national debt, though, right?

Besides, why would rich people move their residence to more favorable countries and commute to the US to save money anyway? It’s not like they can afford it.

Posted by icesyckel | Report as abusive
 

I understand the vitriol for the rich – not the reasoning behind it but I mean I understand that liberal minded folks have bought into the fact that rich people must pay more. I would think that everyone’s goal is to make more money than they make right now. Today the watermark is 250k, which is really not a lot of money, tomorrow it maybe 100k, then 50k. The point is – we should not tax individuals by what they earn. We should tax everyone at the same rate. If you make 30k or 5m you should pay the same percentage. When the tax cuts are expired those making over 250k will jump to about 39% form 35%. So on 250k your liability is 87,500 at 35%. at 39% you owe 97.5k. That’s a lot of money. Compare that to someone making 50k at a tax rate of 20% they pay 10,000. That’s also a lot of money. Everyone must shoulder the same proportional tax burden. You shouldn’t be taxed at a higher rate because you simply make more. Its like being punished for being successful. Not all wealthy people are evil not all poor people are noble. Some wealthy people are evil and most, not all, poor people have been duped into believing they have no choice but to remain poor.

Posted by cuinphilly | Report as abusive
 

You folks are brutal. 40 percent of that 250 thousand or 100 thousand dollars goes to the Feds. Plus Mr. Esnard has to pay state taxes on that 250 thousand dollars. Don’t forget the property taxes he has to pay on his home. Don’t you think he is paying enough? What is our government doing with all the money they are already taking from Mr. Esnard? Our government is paying to educate, house, feed, and jail illegal aliens. Yet, our roads, railroads, and airports are in need of repair. We do not have enough energy sources. Our streets do not get swept, water mains burst, pot holes do not get fixed. I make 60 thousand a year and my taxes have gone up significantly, especially since I have decided to go back to school. I have to pay a 40% tax on my classes. OUCH!! I voted for Obama and now I regret it big time.

Posted by RightOne | Report as abusive
 

The rest of the story: Poor Mr. Esnard was supposedly let go from Grubb & Ellis, the company went out of business and Mr. Esnard lost his deffered compensation. boo hoo

Posted by bigbusiness | Report as abusive
 

Post Your Comment

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
  •