Tags: tax | wealthy

The Wealthy Aren't Scrooges

Thursday, 23 Dec 2010 12:07 PM

By Deroy Murdock

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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."

Self-styled socialist Sen. Bernie Sanders of Vermont, for instance, spent nearly nine hours on Dec. 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."

Sanders wailed that the top 1 percent of taxpayers (who made more than $380,354) earned 20 percent of America's adjusted gross income (AGI) in 2008, according to IRS data. True. They also paid 38 percent of all federal income 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?

High-income taxpayers also cough up state and local levies and often 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?

Sanders stated on the Senate floor, "There is virtue in sharing, in reaching out." He should appreciate these IRS data: In 2008 alone, the top 10 percent of taxpayers (who earned at least $200,000) paid 42 percent of all charitable deductions, worth some $72.3 billion.

To understand wealthy Americans' "virtue in sharing," consider The 2010 Bank of America Merrill Lynch Study of High Net Worth Philanthropy. This fascinating document finds rich people doing what Sen. 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 multimillionaires, 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 donated time. The average rich respondent volunteered 307 hours — the equivalent of 38 eight-hour shifts.

Some highly wealthy individuals give enough to rename entire institutions after themselves. New York University's Medical Center was rechristened the NYU Langone Medical Center after venture capitalist (and plumber's son) Ken Langone donated $200 million without restrictions in 2008.

Nonetheless, some remain utterly unimpressed with America's wealthy. According to Massachusetts officials, an arsonist on Nov. 24 torched a $500,000 house under construction in Sandwich. On Dec. 2, an arson attempt almost destroyed a Marston's Mills home. At both crime scenes, someone graffitied: "F*** the rich."

On Dec. 14, Clay Duke opened fire on a Panama City, Fla., schoolboard meeting before fatally shooting himself. His online "last testament" echoed today's anti-rich themes: "the Wealthy manipulate, use, abuse, and economically enslave 95 percent of the population," Duke wrote. "Our Masters, the Wealthy, do as they like to us."

While most wealthy people legally acquire their money, greedy crooks like Bernie Madoff exist, alas, and should be imprisoned and impoverished. Also, capitalism should be cleansed of the bailouts, subsidies, and special favors that perversely find roofers and waitresses underwriting financiers and speculators.

But these are exceptions, not the rule. Despite today's destructive anti-rich slogans, the data demonstrate that wealthy Americans are much less like Scrooge and much more like Santa.

Deroy Murdock is a columnist with Scripps Howard News Service and a media fellow with the Hoover Institution on War, Revolution and Peace at Stanford University. E-mail him at deroy.murdock@gmail.com

© Scripps Howard News Service

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