Google+
Close
Merry Christmas to America’s Top 1 Percent
The rich are more like Santa than Scrooge.


Text  


Deroy Murdock

In this season of giving, the words hurled at America’s wealthiest citizens have been far from generous.

The recent debate over the Obama-GOP tax-cut compromise featured language best described as “affluphobic.”

Sen. Bernie Sanders of Vermont, a self-styled socialist, spent nearly nine hours on December 10 excoriating affluent Americans. Sanders complained to colleagues that “when the rich get richer…they say: ‘I am not rich enough. I need to be richer.’ What motivates some of these people is greed and greed and more greed.” Sanders further filibustered: “Greed is, in my view, like a sickness. It’s like an addiction. We know people on heroin. They can’t stop. They need more and more.”

Advertisement
Sanders wailed that the top 1 percent of taxpayers (who made more than $380,354 apiece) earned 20 percent of America’s Adjusted Gross Income (AGI) in 2008, according to IRS data analyzed by the Tax Foundation. True. They also paid 38 percent of all federal income taxes. The top 5 percent (with incomes exceeding $159,619) earned 34.7 percent of AGI and paid 58.7 percent of taxes. The top 10 percent (with incomes above $113,799) earned 45.8 percent of AGI and paid 69.9 percent of federal income taxes.

So, do these rich people pay their “fair share?” If not, should the top 10 percent finance 75 percent of income taxes? Eighty percent?

In contrast, the bottom 50 percent of taxpayers generated 12.8 percent of AGI and paid 2.7 percent of all federal income taxes.

High-income taxpayers also cough up state and local levies and often pay taxes on sales, property, capital gains, dividends, partnerships, and corporate income. Their wealth floods public coffers and flows into government programs, many targeted at low-income Americans.

So what? Generosity is a snap when tax authorities demand tribute. How do the rich behave absent government coercion?

“These people who are worth hundreds of millions of dollars,” Sanders stated on the Senate floor, “Maybe they’ve got to go back to the Bible or whatever they believe in understanding that there is virtue in sharing, in reaching out, that you can’t get it all.”

Sanders should appreciate these IRS data:

To be surgically precise, as Ryan Ellis of Americans for Tax Reform notes, an IRS review of Returns with Itemized Deductions (columns CI and CJ) indicates that in tax year 2008, Americans who earned at least $200,000 filed 3,912,225 tax returns or 9.96 percent of that year’s 39,250,369 total returns. This group deducted $72,336,640,000 in charity, or 41.83 percent of the $172,936,002,000 for such deductions that all filers claimed. In short, the top 10 percent of taxpayers paid 42 percent of all charitable deductions, worth $72 billion in 2008 alone.

To understand wealthy Americans’ “virtue in sharing,” consider The 2010 Bank of America Merrill Lynch Study of High Net Worth Philanthropy. Conducted by Indiana University’s Center on Philanthropy and released November 9, this fascinating document (recommended by the National Taxpayers Union’s Andrew Moylan) finds rich people doing what Senator Sanders asked.

This survey included 801 respondents who made at least $200,000 and/or enjoyed at least $1 million in net worth, excluding housing. The average respondent was worth $10.7 million.

Among these multi-millionaires, 98.2 percent contributed to charity, versus just 64.6 percent of the general population. The wealthy typically gave away about 8 percent of their incomes in 2009. This figure has slipped as the economy has slid. In 2007’s survey, the rich donated between 9.3 percent and 16.1 percent of income.

In 2009, 26.8 percent of Americans volunteered with charitable organizations. However, 78.7 percent of wealthy people volunteered — nearly triple the national figure. The average rich respondent volunteered 307 hours. Rather than merely write checks, the average wealthy American last year gave to charity the equivalent of 38 eight-hour shifts.

The Center on Philanthropy’s researchers valued each hour of voluntarism at $20.85. So, the average rich American’s 307 volunteer hours equaled $6,400.95.

“High net worth households play an important role in the philanthropic landscape,” the Bank of America study concluded. “They give between 65 and 70 percent of all individual giving and between 49 and 53 percent of giving from all sources, which includes giving from corporations, foundations, and both living and deceased individuals.”



Text