If the debate over the tax deal between President Obama and congressional Republicans has shown anything, it is that the American Left really hates the rich.
But why?
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Politicians often divide Americans between “the rich” and “working people,” implying that the rich don’t work for their money. Complaining about the tax deal, Rep. Jim McDermott (D., Wash.) contemptuously referred to the rich as “trust-funders,” suggesting that most had done nothing to earn their wealth. But in reality, roughly 80 percent of millionaires in America are the first generation of their family to be rich. They didn’t inherit their wealth; they earned it.
In fact, several studies indicate that the rich work very hard for their wealth. For example, research by professors Mark Aguiar and Erik Hurst found that the working time for upper-income professionals has increased since 1965, while working time for low-skill, low-income workers has decreased. Similarly, according to a study by the economists Peter Kuhn and Fernando Lozano, the number of men in the bottom fifth of the income ladder who work more than 49 hours per week has dropped by half since 1980. But among the top fifth of earners, work weeks in excess of 49 hours have increased by 80 percent. Dalton Conley, chairman of NYU’s sociology department, concludes that “higher-income folks work more hours than lower-wage earners do.”
Research by Nobel Prize–winning psychologist Daniel Kahneman showed that those earning more than $100,000 per year spent on average less than 20 percent of their time on leisure activities, compared with more than a third of their time for people who earned less than $20,000 per year. Kahneman concluded that “being wealthy is often a powerful predictor that people spend less time doing pleasurable things and more time doing compulsory things.”
The rich are not sitting by the pool, sipping their cocktails; they are sitting in their offices, working their behinds off.
And more important, their work often produces the goods, services, and technologies that make all our lives better. Nearly all of the modern technological marvels in our life, the things that help us live longer, reduce the amount of manual labor in our lives, or just entertain us, are the result of someone trying to become rich, and often succeeding.
We also hear constantly that the rich need to “pay their fair share.” But the rich already pay a disproportionate share of taxes. The richest 1 percent of Americans earn 20 percent of all income in America but pay 38 percent of income taxes. The top 5 percent earn slightly more than one-third of U.S. income while paying nearly 59 percent of income taxes. One might suggest, therefore, that the wealthy already pay nearly double their “fair share.” Of course other taxes, such as payroll taxes, property taxes, sales taxes, and the like, tend to be more regressive, mitigating this somewhat. But even if you include all types of federal, state, and local taxes, the wealthy pay a higher proportion of taxes than their share of income would warrant.
"But even if you include all types of federal, state, and local taxes, the wealthy pay a higher proportion of taxes than their share of income would warrant."
Who made Michael Tanner the arbiter of what's warranted? How about capital gains rates on the "carry" of a hard-driving hedge fund manager? How about a 35% maximum rate on people who earn their money the old fashioned way, by inheriting it and clipping coupons? Huh, Mr. Tanner?
Nobody hates rich people. There's a lot of resentment, however, against rich people who act like they deserve to be rich. Ever see a Powerball winner act as though he deserved to win the lottery?
How'd I know that it was MikeB that responded to this article? Of course you resent* the rich. You made as much an admission to that in Jim Manzi's article.
"Ever see a Powerball winner act as though he deserved to win the lottery?"
And there are many others who feel their lives have been destroyed because they have won the lottery. Feeling regret is not an attitude of entitlement, in my opinion.
*By the way, people who resent others can easily be manipulated into hating the other. That's why the Democrats engage in class warfare and identity politics.
"The richest 1 percent of Americans earn 20 percent of all income in America but pay 38 percent of income taxes. The top 5 percent earn slightly more than one-third of U.S. income while paying nearly 59 percent of income taxes. "
From where do these figures come? Can you cite references?
All things considered, the people who are most closely emulating the Paris Hiltons of the world are the members of the Political Class. These people make one's nightmarish memories of the worst possible high-maintenance "significant other" seem tame by comparison.
I should apologize, as it is unsporting to offer the mental image of Harry Reid in gold lame so close to lunch.
Wanting the tax system to be slightly more progressive by increasing the top rate by 4% is not class warfare. If we were talking about a 20% hike, increasing the estate tax back up to 55%, and increasing capital gains tax up to 35%, then you could reasonably complain.
And by the way I find it humorous that people on the left are claiming class warfare against them at the same time the right is saying the exact same thing.
Oh, and it's also important to recognize that the very wealthy don't actually pay 35% due to investment income. Warren Buffet has pointed out many times that his effective tax rate is only 18%.
"Wanting the tax system to be slightly more progressive by increasing the top rate by 4% is not class warfare."
Never mind the fact that a "progressive" tax system is inherently based on class warfare (why shouldn't the poor and the rich just pay the same rate?), when the 4% increase in marginal tax rates is not enough, what should the next percentage rate increase be? Another 4%? 5%? 10%?
"Warren Buffet has pointed out many times that his effective tax rate is only 18%."
He is correct that the marginal tax rate is higher than his effective tax rate, but last I checked 18% of billion is greater than a marginal tax rate of 35% on $250,000 in annual income. That is an argument to remove marginal tax rates and only have an effective tax rate, but then we're back to my argument above.
"Politicians often divide Americans between “the rich” and “working people,” implying that the rich don’t work for their money."
Mike, the progressive, socialist professional, political, parasites are the guilty ones of dividing the Amerians into a class warfare society!
We should be speaking to the 40.8 million laggards who have spent many, many hours of their lives, for generations, making their monthly jaunts to the mailbox for their checks! Just saying.
What will these people do when the Obama regime finally kills their 'golden goose', the 'rich' who pay those checks...I know, so do you.
It is notable how some of the commentators here simply prefer to ignore the essential point made by this wonderful piece: what is fair share? By their standards (which they of course prefer not to reveal explicitly) the answer of the liberals is: "whatever we say it is". If liberals decide it should be several times your share of income, rich people, than that is the moral ground. George Orwell would have been proud.
Instead of tackling the fundamental difference between Libertarians and Liberals on the meaning of Fairness, the commentators prefer to argue percentage points.
And to Tony -- the statistics about share of income and share of tax burden come directly from the IRS' income statistics division. Lucky for us, otherwise the "rationalizers" here would have claimed the rich invented these numbers...
So they hate us? Who cares? We've got our wealth, and we'll keep it. And the new compromise will see to it. We don't ask for love. We ask for low taxes. And we got them.
Can someone provide a link to a source substantiating this quote:
"Households with more than $1 million in income make half of all charitable donations in this country. That totaled more than $150 billion last year."
While I am willing to believe it, my liberal friends (yes, I do have some, and yes, they DO respond to objective data) won't accept a throwaway sentence in an opinion column. I would like the original data from the original source.
Tanner makes the serious mistake of believing that the libral-progressive-socialists hate the rich. They don't - they are the rich. They are the political, industrial, banking and Wall St. elites whose real agenda is to transfer the power and wealth of the lower and middle classes to themselves. Don't listen to their rhetoric - look at the results of their policies. Diminishing prosperity for the poor and middle classes and record profits for the elites. That's the real goal here.
Labor and product markets mitigate whatever progressivity that is in the tax code. What that means is that to get someone to do a job for you, you have to make it worth the trouble. When there are higher taxes on rich employers, they simply raise prices to get their money back. Their poorer workers pay hidden taxes in higher prices.
@Brian Pendell; "In 2001, Independent Sector, a nonprofit organization focused on charitable giving, found that households earning less than $25,000 a year gave away an average of 4.2 percent of their incomes; those with earnings of more than $75,000 gave away 2.7 percent."
We are not resentful, but we are more generous than the lot of you combined.
