Columns

Why do we hate the rich?

Kathleen Kennedy | The Daily Cougar

Kathleen Kennedy | The Daily Cougar

While campaigning in Toledo on Oct. 12, 2008, President Barack Obama told Samuel “Joe the Plumber” Wurzelbacher,  “I think when you spread the wealth around, it’s good for everybody.”

Two years later in Quincy, Ill., Obama said, “I mean, I do think at a certain point you’ve made enough money.”

These statements may not bother you. Some of you may say it’s only fair that the rich pay more or that wealth should be equally distributed. To be fair means to be free from bias. This is neither fair nor just. There are two sides to every story and two people in every conflict.

Class warfare ideology is no new phenomenon. Conflict between social and economic classes can be found throughout the history of human civilization: the French Revolution, the Cuban Revolution and the Marxist Soviet Union. Each can be described as bloody reigns of terror in which countries were ruled by violence, fear, mass executions and injustice.

All of these conflicts were caused in part by desires for the redistribution of wealth and resulted in despotic bedlam. There was no universal equality, but rather, ubiquitous injustice.

Socialistic redistribution of income is thievery made legal. By the Fourth Amendment, we are guaranteed protection from unreasonable searches and seizures of our property. Rightfully and legitimately earned wealth is property, or at least our founding fathers certainly seem to have thought so.

“The utopian schemes of leveling (redistribution of wealth), and a community of goods, are as visionary and impracticable as those that vest all property in the Crown,” Samuel Adams said. “(These ideas) are arbitrary, despotic, and, in our government, unconstitutional.”

Former president James Madison had similar philosophies.

“I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents,” Madison said.

For those who say the wealthy should pay their fair share: The top 1 percent takes home 16.9 percent of total income, but pays 36.7 percent of income taxes. The top 10 percent earns 43 percent of total income and pays 70 percent of income taxes.

A 2004 Congressional Budget Office report says the top 40 percent paid 85 percent of income taxes whereas their counterparts, the bottom 40 percent, paid 6.1 percent.

The 1 percent has become the moniker for greedy, capitalist pigs. But this discrimination, like all other forms, is false. In the 2009 Congressional Budget Office tax data, the top 1 percent earned about $1.2 million pre-tax income on average and paid $337,700 in federal taxes; they earned 13.4 percent of the nation’s income, but paid 22.3 percent of the federal income taxes.

This group is responsible for 30 percent of philanthropic contributions made in 2009. Many of these men and women also bear personal, financial responsibility for their companies which generate the jobs necessary for economic development.

It is odd that we hate the rich. Logically, we should admire them for their ingenuity and business savvy. Going to college, getting a degree and earning a secure income from a successful and rewarding career are goals to which we should all aspire.

There is no reason to begrudge others their success or resent their triumphant pursuit of the American dream. Rich folks are people too. As author Sister Mary Tricky said, “Rich people are just poor people with money.”

The vast majority of wealthy Americans rightfully and legally earned their money, so maybe we should stop spurning the rich and start learning from them.

Sarah Backer is a business sophomore and may be reached at [email protected].

19 Comments

  • “When the people find that they can vote themselves money, that will herald the end of the republic”. Benjamin Franklin.

  • I do have a problem with your comment. The rich don’t pay their share in taxes because the previous administration gave them tax breaks so they can write off their taxes. You should not put your own bias in a article. People don’t hate the rich because they made their money. People hate the rich because they use their money and status to look down on people. You saw that in the election. I don’t want to be like anyone who looks down on people just because I have more money

  • @RXTT – You are correct that many rich people dislike/hate the poor. There are many reasons for this. One of the primary ones is the fact the wealthy believe that many poor people feel entitiled to rich people’s money. This often takes the form of the argument that the rich don’t pay their fair share. To a wealthy person’s ear, this sounds like, “I want someone else to pay for the benefits I receive (entitlements, public schools, infrastructure, etc.”). The wealthy resent this. I don’t think its a stretch to think that anyone who hears, “I want to take your money for my benefit” is going to react poorly, regardless of their economic circumstance. Furthermore, many wealthy are also bothered by what the poor define as a “fair share.” What is a fair share? Mitt Romney paid more in taxes last year than all but a very few Americans, yet he was lambasted as not having paid his “fair share.” To the rich, it takes perverse stretch of logic to understand how someone can pay more taxes than 99% of the population and still be accused of not paying their fair share. While extreme (but logically consistent), some wealthy would argue that the government should divide the cost of government by number of adults in the country and send each one a tax bill for that amount. While that method of taxation would be completely imposible to implement, it would at least pass the common sence test of each person paying their “fair share.” The point is that the wealthy resent how (in their eyes) many have twisted the definition of “fair share” to mean “wealthy pay for everything and no one else has to pay and that will be called fair.”

    I am not trying to defend the political positions of the wealthy, and there are obviously arguments to be made for progressive taxation, entitlements, and a social safety net, but I do think everyone would be better off if they took a couple moments to try to view the world from the other side’s perspective. If you step into a wealthy person’s shoes for a moment, its not hard to see why some of them openly dislike the poor. And that’s an important thing to understand since, in America, the wealthy get to call the shots.

  • I think the point has been missed here. We have institutionalized bias toward the rich with our tax system. That has contributed greatly to the greatest income disparity in the world. Wealth has literally been redistributed upwards. Americans have said in poll after poll that it is not envy that seeks change but rather fairness in the system.

  • @ Deborah – I would be curious to know, specifically, what tax policies are institutionally biased towards the rich? The most common example put forth is that capital gains are taxed at a lower rate than ordinary income. So it appears on its face that Warren Buffet pays a lower tax rate than his secretary. But that storyline is willfully ignorant of certain facts. Let me put forth a very simplified example that shows how Mr. Buffet pays a much higher tax rate than his secretary. Then I’ll fill it in with actual figures that Mr. Buffet has publicly disclosed.

    Say there is a company that has one shareholder. This company has a pre-tax net income of $1 billion dollars. This company pays taxes at a rate of 35% (Federal statutory rate). After taxes, the company has income of $650 million. It then decides to dividend out that income to its sole shareholder. Those dividends are then taxed at a rate of 15%. This results in the shareholder receiving $552.5 million. Thus the EFFECTIVE tax paid on the $1 billion of income the company made is 44.8%. People wanting tax reform will claim that this rich guy only paid 15%, but the reality is that this rich guy and HIS company actually paid 44.8% – a far higher rate than any wage earner pays.

    Now lets use Mr. Buffets actual numbers. I’ll use 2011 figures as publicly disclosed.

    Berkshire Hathaway (Buffett’s company) had pretax income of $15,314 million and had an income tax expense of $4,568 million (page 87 of Form 10-K Audited Annual Report filed with the SEC). This is an effective tax rate of 29.8%. Mr. Buffett then paid additional personal income taxes of 17.4% (ABC News). Combined, Mr. Buffett’s business and personal income tax rate was 42% – a rate much higher than a salaried employee would pay – including his secretary.

    If you have other biased policies that should be pointed out, I’ll be more than happy to discuss those as well. Maybe there are some that I haven’t heard of (I have a BBA & MS in accountancy and have worked in SEC (financial) reporting for 7 years). But speaking in generalizations, the wealthy pay a lot more in taxes than working folks do.

    http://abcnews.go.com/blogs/business/2012/01/warren-buffett-and-his-secretary-talk-taxes/
    http://www.sec.gov/Archives/edgar/data/1067983/000119312512079022/d280149d10k.htm#tx280149_17

  • I emailed the Daily Cougar a response to this piece, but I thought some people might enjoy this:

    Today I read the opinion piece which Sarah Backer wrote, normally I don’t bother with the opinion pieces because they tend to be either very obvious or somehow uninteresting, but today’s piece was actually shockingly bad. I noticed several fallacies and points which were either unclear or incorrect. I thought I’d let you know for future columns!

    1) The third paragraph (beginning with “these statements) is unclear. I think it’s is trying to make the point that we need to
    examine this a different standpoint than the point made by president Obama, but the choppy sentences (“To be fair…” , “This is neither…”) makes is hard to follow and I’m unsure as to whether she’s calling the taxing the wealthy or the argument itself being
    unfair.

    2) The first argument being made is a false dilemma. Taxing the
    wealthy is in no way ideologically or practically similar to a bloody mass proletariat uprising. Suggesting that revolution is the logical conclusion of unequal taxes is ridiculous. These revolutions were not started by someone deciding to tax the wealthy – they were a reaction of decades and centuries of economic and social inequality perpetuated by the government consistently favoring the upper class. Taxing the wealthy can be viewed as way to equalize society and thus diffuse class conflict.

    3) “Socialistic redistribution of income is thievery made legal,” is a very grand, definitive statement which is not (and probably can’t be) backed up. Quoting two wealthy men who lived centuries ago is not sufficient evidence for such claims. Both Adams and Madison lived before socialism had been imagined, in a time when rampant capitalism (backed by the government) caused the rise of child labor, widespread environmental destruction, ethnocide, and genocide. While no doubt the opinions of the founding fathers is important and interesting, it is not definitive in the modern world. In their time over 50% of Americans were farmers – now it’s less than 4%. Slavery was the basis of the Southern American economy, obviously this is no longer the case. This is a different world economically, socially, and politically. Using the words of the founding father’s to support your argument is a tired strategy which is ultimately unconvincing.

    4) The point regarding the differences in income versus tax rate fails to communicate the disparity in income between the American classes and the effects of income taxing on different income groups. The average income for an American household is about $44,00 – if this was flatly taxed (let’s use 10% as an example) after income tax they would make about $39,000, which is a small amount for anyone with children or dependents. Compare this to the top quintile of American household income – $157,000. Ten percent of this still leaves them with over $141,00, more than enough to continue living an affluent lifestyle (and leaving them with more than $100,000 more than the average). Unequal tax income brackets are used because different income groups are affected differently by the taxes – lower income earners would suffer proportionately more than than the higher earners – equal income tax rates accentuate inequalities in society.

    5) Your argument about philanthropy is a bit silly. If a group has a much larger percentage of wealth then the rest of the nation it follows that they will contribute a lot more to charity than other less wealthy groups. Furthermore, if they have enough wealth that they can just give it away without major consequences for their lifestyle, this proves they can obviously survive higher tax rates.

    6) The main point of disagreement I have with your article is the
    last three paragraphs. One in two undergraduates are unemployed. Working hard is not at all a guarantee – privilege, luck, and many factors lead to admittance into the upper class. The idea that going to college and working hard will inevitably lead to wealth and luxury is false. While the idea itself is not completely false, it can lead to a culture of victim-blaming.
    Wanting to tax people is not “begrudging” people of their success. Taxes are a necessary part of society to insure infrastructure, education, public health, and institutions that benefit everyone.
    Blaming or praising people as the sole architects of their status
    ignores the existence of societal forces which grant privilege or
    enforce discrimination.

    7) What we “learn from the wealthy” is a questionable statement that suggests that all of the upper class got to where they are in the same industrious, typical way. Am I to supposed learn from Bill Gates or Mark Zuckerberg and drop out? Am I supposed to learn to embezzle and act cut throat with any competitors? Should I lobby congress for my personal gain? Blanket statements such as this don’t add much to your argument.

    While I understand that income taxes and class conflict are very
    controversial, difficult, and complex issues to address (and I don’t pretend to be an expert) it would be nice if the column was a better researched and without such obvious logical flaws. That said, it’s always nice to hear someone else’s opinion, especially if they care enough about it to publish it across campus.

    One in two undergraduates are unemployed. Working hard is not at all a guarantee – privilege, luck, and many factors lead to admittance into the upper class.

  • We do not hate rich people.The problem are individuals who have not earned their wealth. What do I mean? I mean the children, grand children, great children, etc. of these families such as Rockefellers, Rothschilds, JP Morgans, Trumps, Johnson & Johnsons , etc. who are completely out of touch with the struggle and suffering most of us endure day by day. For example, Mitt Romney said that if a college student needed help paying for college he should just burrow money from his parents. This is coming from a man who is the son of a millionaire.

    What pisses people off is that the top 1% have this ironic ideology about working hard, claiming to the top, pull yourself up from the bootstraps, and being blessed. I laugh so hard when I hear rich people brag about being blessed because I ask myself: what did a poor, starving child in a 3rd world country do to piss off God to not have been “blessed”?
    Unfortunately, no one has the opportunity to choose their parents and what level of income they have. These individuals were lucky enough to have been born into the right families but then they have the audacity to say they are “job creators” and everyone else should just “get a job” and “work hard” when they have nothing to show for it.
    Congress has lowered taxes to their lowest levels since the 1950s but we ended up with the Great Recession and high unemployment anyway. These so called Capitalists have shipped millions of jobs overseas to China (communist country) in order to have cheap labor. I hate the term “job creator” because it is reminiscent to the dark ages when Kings and Queens ruled over the peasants because of divine right theory. Lastly, Paul Ryan VP Candidate was on Social Security when he was young man after his father passed away. Paul Ryan saved that money in order to pay for college. However, now that he is a wealthy man he wants to privatize social security which would essentially get rid of the program. For some reason he forgot that if it wasn’t for Social Security he would’ve had a tough time paying for his education and not have accomplished as much if he was preoccupied with his financial situation.
    I am not against anybody who grew up on welfare or came from a middle class family wanting to get out and make something of themselves. I encourage it however in order for an individual to rise up the ladder of success they need a quality education and healthcare. It’s time that we all work together to get ahead.Yes that includes raising taxes on the wealthy so that we can pay down the debt, bring quality education for low income children, make college more affordable, pay for student loans, and have access to higher quality healthcare.

    • Matthew,
      You’re demonstrating exactly what this article is about.

      First, why should you care that somebody got into the lucky sperm club and inherited wealth. Do you feel the Govt. and yourself are more entitled to their private property than their heirs? What right do you have to take it?!

      You’re so lucky you live in a country (and a time in history) that offers more opportunity than anywhere on the planet. Yet you complain about it. Nobody owes you anything except what you create for yourself.

      I’m positive Romney said more than “college students,,,, should just borrow the money from their parents.” What he didn’t do is “whisper” maybe your student loans will be forgiven, just vote for me. If you fall for that then you’re buying into the whole Ponzi scheme currently going on in our Govt. Instead you should be asking yourself why college costs are so high today when compared to the past. Did your parents have to get themselves into as much debt to pay for college as young people today? You know the answer, but instead of holding your hand out expecting something for free, spend some time to find out WHY?

      Also educate yourself on when SS and Medicare are projected to go broke, and come back here with your plan to fix it without using unicorns and rainbows.

      You blame our recession on low taxes for the rich. Really? Educate yourself as to the REAL cause. Why were the banking regulations changed in the 90’s that blurred the banking and investment firms relationship’s? Why did all those banks start to loan to high-risk borrowers, and eliminate the practice of putting any money down? Who forced a gun against those (middle class) homeowners that signed a contract and took these loans they could never afford, or second mortgages so they could have that new boat and RV? Was it the RICH?!!

      It’s capitalists that allow you to have that nice smart phone, a closet full of clothes, a flat screen TV, supermarkets full of food, medical advancements to extend your life, and energy to power everything you do. Would you be able to own that smart phone, flat screen TV ,or your laptop if it was made in the U.S. and cost 4-8 times what you paid for it? Probably not. It was the evil rich that took a risk with their valuable private property that allows you to live the life you live. How will your job outlook, and future be if the Govt passes more regulations and higher tax rates that stifle investment and growth?

      Lastly, and most importantly, is Obama’s plan to “tax the rich” really going to do what you say it will? It sounds very noble, lower the debt, free healthcare, pay for YOUR education, etc, but again, educate yourself, take an Econ class, do something. Obama’s plan (depending on what speech he’s giving) is reportedly supposed to increase “revenue” by $80-$160 Billion each year, yet he also plans on continuing to overspend by ~$1 TRILLION. As I’ve posted here before, you don’t have to be a math major to know there are (1,000) BILLION in (1) TRILLION. Explain to me how raising taxes on the rich will do what you claim.

        • Man will always be a man. There is no new man. We tried so hard to create a society that was equal, where there’d be nothing to envy your neighbour. But there’s always something to envy. A smile, a friendship, something you don’t have and want to appropriate. In this world, even a Resource Based Economy, there will always be rich and poor. Rich in gifts, poor in gifts. Rich in love, poor in love.

          The statement above is why your RBE will never work.

  • The reason why a lot of people hate the rich: it’s easier to point the finger and blame someone else for your problems than to work harder or smarter and try and make your own way in the world.

  • It is in a societies best interest to limit the gap between the rich and poor.
    Money is not earned on an even playing field.
    The majority of government spending, benefits the wealthy lifestyle more than the poor lifestyle.
    The steepness of the tax curve should be determined by the citizens , free of any preexisting notions other than fiscal responsibility.
    The majority of the wealthy have no direct role in hiring or creating jobs for anyone.

  • Regardless of economic stature, I think everyone harbors a desire to be better off. From my standpoint, I hardly either hate or envy the rich. Many of the icons of current American industry rightfully deserve every dime of the wealth that they have earned, and hopefully will enjoy all the benefits that come with it. Unfortunately, the Wall Street players and hedge-fund managers that make obscene fortunes with insider information that creates a biased playing field doesn’t generate much love. Nor do the lobby-ridden rules of financial greed such as the legal ability to arbitrarily double credit-card interest rates without apparent bounds at the drop of a hat. All attempts to rein in these types of rules are met with millions of dollars of lobbiest ‘free money’ to keep the rules in place. Nobody appears to remember rules against loan-sharking, but these legal rules play-out very similarly on the very classes that are the target of the article. Meanwhile, the executives that force people into bankruptcy with their excessive interest hikes give themselves huge bonuses by all the revenue produced by those force to submit. It is not a hate of the wealthy that I feel; it is the hate of the lack of control over our own financial destinies when many of us do everything we were taught to as good workers and savers, only to get screwed by arbitrary rules that permeate every perceivable financial obligation these days.

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