Mike Alley made lots of money running Fifth Third Bank’s central Indiana operations until he quit in 2002 to run his own investment firm, and he’s still making it pumping resources into entrepreneurial companies.
That perspective — of shifting from a relatively secure paycheck to a livelihood based entirely on his own smarts — persuades Alley that the tax system is upside down and ultimately destructive.
The people taking the greatest risk get hammered hard through capital gains taxes compared to those who put relatively little of their own skin in the game, he says. In other words, he thinks executives, sports figures and other high earners should pick up more of the bill.
“If you’re working for the ‘man,’ have a paid job and make a boatload of money, I’d be in favor of having a higher tax for that man,” Alley says.
Alley also thinks people like himself, who invest in new and growing companies, contribute more to society than some other big earners.
Of course, if Alley invests well, he has potential to make an income wildly beyond the typical corporate executive and even some professional athletes. Like many others who invest in start-ups and early-stage companies, Alley hopes for a 20-percent return on his investments over a decade or more. But a huge winner could shatter that figure.
Alley is concerned about sentiment in Congress to bump up the capital gains tax to about 20 percent from the current 15 percent. That would strip away incentive to take risk and starve entrepreneurial companies of cash, he fears. The result would be diminished growth in products and services of the future.
What do you think? Do private investors like Alley carry too much of the tax burden?