Tagged as billionaire
I think there should be special provisions in the child support formulas in every state that discriminates according to income. I don’t think there should be a blanket formula that applies even-handedly to everyone. I think billionaires and very wealthy people are a special class that should be treated differently for these purposes. Just like I think the very poor should be treated differently.
In New York, if a parent falls below the poverty guidelines, he or she is exempt from paying child support. It’s been a while since I looked at the statute, but I believe that this is correct. If it is, that is clearly discrimination. It is discrimination in favor of the poor. And it is a good thing. If you can’t afford it, you shouldn’t be forced to pay support. That is what the social services laws are meant to do, to take care of people who are a public charge due to poverty.
Similarly, I think the ultra wealthy should not be held to the same standard as everyone else. Think about it: In New York, if you are like billionaire Donald Bren, and if the statute is strictly applied, here is what you would owe your children for child support:………………………..doing the math hold on…………………..am terrible at Math…..wait….he’s worth about $12 billion dollars, right? According to Forbes? That is his annual net worth? And he has two children with Jennifer Mckay Gold? So if we are talking about New York, hypothetically, we are looking at 25% of his adjusted gross…..Okay. Hold on. Doing the Math……….$25,000,000 per month? That can’t be right……..What is 25% of $12,000,000,000.00? I don’t know. But whatever it is, it’s a lot of cheese.
Now. Donald Bren is big cheese and he can afford it, if Forbes has it right. But is that the point? I don’t think so. Even in New York, once the adjusted gross goes above $80,000.00, the formula goes out the window. Because everybody can see that children don’t need that much money per month to subsist – even the children of billionaires.
What is the purpose of the child support laws and formulas? Well, Congress acted on this issue in 1988 requiring that states adopt uniform support guidelines. Each state has its own laws regarding child support, but there is a lot of similarity between the states as far as I can determine. Now, the purpose of the guidelines, among other things, is to provide “just” and “appropriate” financial support — in relation to the actual cost of raising a child — to minor children based on parental income and net-worth.
In New York, there are, as I said, provisions in the statute to accomodate very high and very low incomes and networth. And I cannot imagine that the rule is not the same in California and the rest of the country. If it isn’t, then these states need to change their guidelines to reflect these fringe cases.
No one can make a logical argument that the child of a billionaire like Donald Bren should get 17% of his adjusted gross income every month in child support. That is not “just” and “appropriate” and it is far in excess of what it costs to raise a child –even the child of a billionaire. Typically, clothing, food and shelter are the expenses factored into “cost of raising a child.” Even for the children of billionaires, how much can that reasonably be? How much is just and appropriate? Even for the most expensive designer clothes, organic food, and upscale zip code, how much can that amount reasonably come to? I can tell you this: it will be a lot, lot less than 17% of twelve billion.
Thus, should there be different rules for billionaires? And if so, should there be one rule to determine the amount of support, such that every single billionaire and high net-worth person would pay the same? Or should it be determined on a case by case basis? In Bren’s case, his son and daughter are suing him for retroactive support to the tune of $400,000 per month, per child. That amounts to $4,800,000.00 per year per child or $9,600,000.00 in the aggregate. What percentage of his total net worth is that? $9.6M is what percent of $12B? Hang on…..doing the math…..I get .8%. Don’t laugh. Is that correct? That can’t be correct….
Well, whatever it is, it is a far cry from the 25% they would normally be owed if he was a poor guy. But it far exceeds the reasonable cost of their care, even with “add ons” such as college, extra curricular activities and things like that.
In short, it is a ridiculous amount of money. And applying the formula to a case like this just gives a ridiculous result.
What is the solution? Well, I don’t think the formula should be applied beyond a certain income level. It’s got to be done by agreement. And there should be some legal parameters from which parties can craft an agreement that passes scrutiny. What those variable should be, I can’t say off the top of my head. I’m not a legislator after all. Am just a blogger.
But, a multiplier should be used. Whatever the average cost of raising the average child is in the state, then multiply by five, or something like that. And that would be the amount. Or say that parties should pay the same percentages, but set a ceiling for the amount of income considered for the support. So, in Bren’s case, he’d pay 25% per month, for two children, capped at a million dollars of considered income.
What do you think? Good discrimination? Rational discrimination? Or bad, irrational discrimination that favors the rich?
Tagged as billionaire