I have come to a point of empathizing with wealthy Americans. In my estimation, they are being financially victimized. Much of what brought me to this conclusion appears in the thoughts that follow.
The Cambridge Dictionary defines the word victimize as such: “to treat someone in an intentionally unfair way.” The case I make now is that wealthy Americans are financially victimized. The victimization happens in how their tax rates are determined.
Consider some observations as to what drives their tax rate determination. Because it is politically beneficial, there is an effort to condition non-wealthy citizens to believe the wealthy should pay a substantial amount of their wealth in taxes. Since the wealthy are very much in the minority by way of numbers, conditioning the non-wealthy to expect, and even demand, redistribution of wealth brings votes to those politicians who pursue wealth redistribution.
This conditioning process has several moving parts. One is that politicians, almost always Democratic, and their supporters claim great concern for people. They look for opportunities to demonstrate that concern. The demonstration of concern is hardly ever productive for citizens, but simply mischaracterizes what might be a productive action by an individual or group seen as the opposition.
A case in point as to how this supposed concern for people plays out was evident in Democratic opposition to the recently passed tax legislation (Tax Cuts and Jobs Act). While offering nothing by way of legislation when the American economy needs to be stimulated with jobs brought back to and created in this country, Democrats latched onto what they saw as a vulnerable point. The proposed Republican legislation limited the duration of the individual tax cuts but made the corporate reductions permanent. Democrat after Democrat was before a microphone talking about how this was unfair to individuals, especially the middle class, and how it favored big business.
Not one time did I hear a Democrat explain why Republicans took this action. It was because the Senate has what is called the Byrd Rule. This rule originated with Senator Robert Byrd, a Democrat from West Virginia. The time limit on individual tax cuts was included in the bill so it complies with Senate rules – the Byrd Rule – that legislation can be passed with a simple majority only if it doesn’t drive up the deficit 10 years after passage. Not a single Democrat was going to vote for this legislation. Consequently, Republicans made the change so that they could pass it with a simple majority, which they had. Democrats only told the part of the story that would lead the non-wealthy to think Democrats were concerned about them.
Democratic actions described above also reflect another step in the conditioning process. This step is to paint Republicans as members of a party that does what is good for the wealthy while showing no concern for the non-wealthy. Beyond pressing Democratic concern for the non-wealthy, telling only the advantageous part of the Byrd Rule situation was intended to advance the “Republicans love wealthy people and don’t care about the nonwealthy” narrative
Even further, conditioning the non-wealthy includes instilling dislike, if not pure hate, for the wealthy. In part, this is done by repeatedly saying the wealthy are not paying their fair share in taxes. An example is what President Barack Obama said, as reported by Joel Gehrke in an article titled “President Obama on the ‘fiscal cliff’ agreement:”
“‘Obviously, there is still more to do when it comes to reducing our debt,’” Obama said in the video. ‘And I’m willing to do more, as long as we do it in a balanced way that doesn’t put all the burden on seniors or students or middle-class families, but also asks the wealthiest Americans to contribute and pay their fair share.’”
At the bottom line, this statement says make the wealthy pay and pay. The call for the wealthy to pay more is repeated frequently, but never with specificity. Sean Hannity, host of “Hannity” on Fox Cable News, has asked numerous proponents of the wealthy paying their fair share to name that fair share rate. I have never seen him get a straight answer.
The effectiveness of this conditioning process is reflected in several outcomes. One is that polls show this approach to be effective. In an article titled “High-income Americans pay most income taxes, but enough to be ‘fair’?” Drew Desilver, based on a Pew Research Center survey, reports: “Some six-in-ten Americans said they were bothered a lot by the feeling that ‘some wealthy people’ and ‘some corporations’ don’t pay their fair share.”
Nobody is able to make a fact-based argument as to what constitutes fair share, but continuously repeating the call produces the feelings reflected in that Pew survey.
The Drew Desilver article makes this statement, based on a Monmouth University poll, regarding the then-developing 2017 tax legislation: “The poll, released Monday, found that 50 percent of the public believes the federal taxes they pay will go up under the Grand Old Party’s proposal; 25 percent think their taxes will stay the same, and just 14 percent say their taxes will go down.”
I am comfortable concluding these poll results were not driven by respondents examining their tax situation in light of the proposed legislation. There might be some exceptions, but most respondents had to be going on “gut instinct” conditioned by the process I have described to this point.
The end result is that this conditioning process brings far too many non-wealthy individuals to the point that they faithfully vote for those politicians who work this conditioning process with amazing acumen. My observation is that Democrats are masters of this conditioning process. Since the wealthy are vastly outnumbered by voting non-wealthy citizens, many of whom have succumbed to Democratic conditioning, tax policy results in this country are predictable. Here is the picture based on Pew Center research reported in the Desilver article:
“In 2014, people with adjusted gross income, or AGI, above $250,000 paid just over half (51.6 percent) of all individual income taxes, though they accounted for only 2.7 percent of all returns filed, according to our analysis of preliminary IRS data. Their average tax rate (total taxes paid divided by cumulative AGI) was 25.7 percent. By contrast, people with incomes of less than $50,000 accounted for 62.3 percent of all individual returns filed, but they paid just 5.7 percent of total taxes. Their average tax rate was 4.3 percent.”
It appears to me a sizable number of citizens who pay little or nothing in taxes get to elect politicians who, in turn, take huge sums from the wealthy and pass benefits to those non-wealthy citizens who are conditioned to support this process.
There are at least two sources of sadness from what I have described here. One is that this looks and smells like financial victimization of the wealthy. The second is that the benefits provided to the non-wealthy normally do little or nothing by way of nurturing productive attitudes, promoting individual responsibility, allowing for and encouraging upward mobility or unifying a nation. We must find a better way.