Encomium to the rich

At this time, many among the politicians, opinion writers, and the general public give themselves to vilifying the rich. On a closer look, however, this attitude can hardly be justified:

– The rich pay by far most of the income taxes at federal, state, and local levels. Yet, they receive exactly the same level of services from the government as the paupers. That notwithstanding, a large number of people are clamoring to increase even more the taxes of the wealthy. Indeed, it seems there is a contest for who can devise more imaginative means of soaking the rich. For instance, it was discovered that among people applying for unemployment compensation there are some that had high incomes before losing their jobs. Immediately, someone in Congress has introduced a law to deprive the “rich” of what is their contractual right. Should we expect next that children of a high income parent cannot claim the life insurance if the parent dies in an accident? Some people in Congress would certainly find uses for the money.

– They pay a larger share of local property taxes and school taxes because they have pricier homes. They do not, however, receive better police and fire protection or use different roads than the poor, nor do rich children receive more attention in public schools.

– They pay more into the Social Security fund (through payroll “taxes” or self-employment “taxes”), but there is a ceiling to their benefits when they retire. As if this was not enough, they will be now punished to pay to the Medicare fund a 3.8% surtax on non-earned income, including that earned from selling their homes.

– Their utility bills (electricity, telephone, etc.) are loaded with fees to pay for the cost of services of those who are poor.

– In order for the universities to offer scholarships to students in need, the rich parents have to pay a tuition higher than the cost of the education of their children.

– At the same time, a 2002 survey by Citigroup on charitable giving has shown that generosity increases proportionally with wealth and is not greatly impacted by economic downturns, tax law changes or disasters like that of September 11, 2001. Instead of a “thank you,” a law was passed, reducing their charitable deduction, even eliminating it, as their income increases.

– According to the same study, the rich volunteer more readily their time to charitable and civic initiatives.

There are, of course, men that are idle and of bad character among the wealthy, but not more numerous than among the poor.

Pillorying the wealthy citizens, under the guise of “fairness” (never appropriately defined) is a relatively new phenomenon. The founding fathers of the country “were men of substantial property” who “had economic security as few men had in the 18th century.”[1]. The net worth of George Washington was estimated at $525 million.[2] As recently as in 1960, the wealth of John F. Kennedy did not seem an impediment to his winning the presidency. The animosity toward the rich that more recently took root in the minds of people is an expression of the communist philosophy of class struggle, which crept into universities first, and then from there into the society at large. Communist philosophy postulates that wealth can only be obtained by taking it from someone else, the corollary being that the total wealth is somehow constant. In reality, wealth is generated by intelligence and competent effort and some people create more of it. In the process, they not only enrich themselves, but benefit the rest of society.

There is an inconsistency, however in the attitude toward wealth. Nobody grudges the multimillion dollar contracts that a Michael Jordan, for instance, had for many years, or clamor that he should have taken lower salaries for the benefit of the bench-warmers. This is probably because most people understand the role of talent in basketball, but much fewer understand what it takes to manage a billion-dollar business.

Earlier observers have noted the contrast between Europe (France was the first example), where a man who had amassed a fortune was viewed with envy and hostility, and the U.S., where such a sight emulated the desire to follow the man’s example and enrich oneself as well. The explanation is found in the class structure which continued to exist in Europe even after equality was legally proclaimed, and which has hindered economic mobility. In the U.S., after the abolition of slavery, there was never a class structure. All Americans are middle class (with varying incomes). Reflecting the European mentality, the French word applied to newly rich, “parvenu,” is derogatory and could be translated as someone who acquired wealth above his class. By contrast, the American term “selfmade man” is positive (or, at least, it used to be until left-wing politicians started to attack Mitt Romney with it). The unequaled dynamism of the American economy has been a consequence of that difference.

So, in conclusion, let’s celebrate our rich citizens!


[1] http://www.aeroelectric.com/articles/honor.html

[2] http://www.businessinsider.com/american-presidents-republican-candidates-net-worth-2012-1?op=1