Tax Lawyer's Blog

“Children, how hard is it for them that trust in riches to enter into the kingdom of God. It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God.”

- Mark 10:23 – 10:25 -

JLP over at All Financial Matters weighs in on the soak-the-rich approach to funding the copious Obama bailouts:

I want to gag when I hear people say stuff like, “The rich get the majority of their income through dividends, yet they are taxed at the 15% poverty level.”

[D]ividends have already been taxed at the corporate level. [The]15% is a tax rate and should not be equated with any economic level. The more you make, the more you pay.

Nothing particularly controversial about that, right? The author is merely saying that dividends are subject to double taxation, therefore, applying a reduced rate to dividends received makes sense.

Fair enough. But then JLP goes a step further.

The unforgivable sin or suggesting that the rich deserve to be rich

JLP has the unmitigated temerity to suggest that the rich deserve to be rich, that they didn’t come by their wealth by having a rich daddy, by exploiting the poor or by having the right genitalia or the proper amount of melanin in their skin:

I get the feeling that [some people] think that most rich people woke up rich.

Personally, I think the middle class’ struggle has much more to do with their inability to prioritize.

I would suggest [these people] read The Millionaire Next Door, by Thomas Stanley and William Danko. In that book he will find that most millionaires drive old cars.

Take a look around at what most “middle class” people drive and you will probably see that they are driving cars and SUVs that they really can’t afford. Imagine how much money could be saved if we didn’t have to drive $50,000 SUVs.

I can imagine the face of a committed collectivist turning mauve as he reads this. For him the mere suggestion that people who are suffering may have made poor choices that caused that suffering is anathema.

Collectivist assumptions and the myth of the evil rich

But it makes perfect sense that the collectivist should feel this way. That’s because he assumes that people are (or at least should be) equal to one another in all material ways. Consequently, when faced with the obvious fact that some people have more wealth than others, the progressive feels duty bound to find some external reason for the financial disparity.

This is no mean task. On the contrary, it’s a matter of life and death. Should he fail to locate an external cause for one man’s poverty and another’s wealth, he is compelled to admit that his entire world view is based on a lie: Namely, that people do not have substantially differing energy levels, skill sets and intelligent quotients. 

Trust me, though, he never fails. Instead, he poses this question to himself:

Since the rich are not rich because of better work habits, greater innate intelligence or greater tolerance for frustration, then why are some people rich and other’s poor?

Since the premise of the query itself excludes all other possible (and I would say more logical) reasons for the inequality of individuals, the collectivist has only one choice left: The “haves” cheated. The rich abused and exploited their natural equals thereby turning them into artificial unequals.

It really shouldn’t surprise us, then, that once you suggest that the rich just may have worked harder and smarter than the middle-class and the poor (as JLP has done above and as I have done here, here and here) the committed progressive feels obligated to label you a heartless bigot. After all, acccording to him, only a bigot could possibly believe that some human beings deserve more than other human beings.

The Myth and the manipulation of the have-nots

The left, therefore, must peddle the idea (the Myth) that the rich became rich not by any special merit of their own, but through the oppression and exploitation of the poor and disadvantaged.

But why do people buy into the Myth? Sigmund Freud taught us that human beings have a difficult time making painful acknowledgments about their shortcomings (i.e. to admit that one’s own choices have played a big part in one’s financial failure). He called this phenomenon psychological denial.

The left is acutely aware of our species’ penchant for denial and so it intentionally and cynically perpetuates the notion that the wealthy and the successful achieved their status not through intelligence, delayed gratification and hard work, but, rather, through the exploitation of the weak, the subjugation of the poor and the oppression of the disadvantaged. It’s an old, but brilliant, strategy.

That’s because the Myth is catnip to the loser. FN 1  And he dips his paws so deeply into that catnip that the Jaws of Life can’t pry them loose. That’s because blaming others feels good. It relieves him of his responsibility for the future and it assuages his guilt about the past.

In other words, the loser who buys into the Myth has a kind of epiphany: He reckons that it has never been his fault that his family is impoverished. He concludes that his predicament is merely the result of the injustices of an unjust society. In one fell swoop the Myth allows him to completely and utterly erase the slate of his past transgressions.

So the peddlers of the Myth dangle in front of the poor and lower middle class a tasty psychological palliative. One that convinces them that the cause of all their woes is an oppressive, patriarchical cabal of middle-aged white men hell-bent on seeing them stay right where they are, on the bottom rung of the ladder. A new truth emerges and they tell themselves, “We never had a chance to begin with. The game was rigged from the outset and we were destined to be screwed.”

Those buying into the Myth, having absolved themselves from all responsibility for their plight, soon begin to feel better about themselves. They no longer feel the pressure to change. They conclude, “I am just fine the way I am, thank you very much. It is others who need changing, not me.”

FN 1 - I use the term “loser” here to refer an individual who is ostensibly unsuccessful and avoids taking responsibility for his lack of success. The man who is struggling to support his family and attempts to do something about it besides blaming others, is by no means a “loser.” And my guess is, he won’t be struggling for long.

The danger of the Myth

By locating the cause of the individual’s failures outside the individual himself, the left has in effect paralyzed the individual. After all, if you truly believed that the game was rigged and that you were powerless to do anything to improve your plight, you would be foolish to waste your time trying to do so?

And make no mistake, the diminishment of the individual is a primary goal of the left.  If you are able to convince people that their individuality doesn’t matter; that everyone is basically equal in intellect, talent and perseverance, it is a very short hop indeed to convincing them to elevate the collective over the individual. 

But there is yet an even more pernicious consequence of the left’s perpetuation of the Myth. It encourages people in the lower economic strata to supplant their self-loathing with an even more intense loathing: Hatred of the rich.

There’s a bit of a paradox at work here. The Myth posits that there are no real qualitative differences between human beings while simultaneously seeking to segregate human beings into two separate and distinct classes:  The Saint-like poor and the Satan-like rich. The left won’t admit it, but this is precisely what its perpetuation of the Myth is designed to do. And it’s effective because it does two things at once. First, it intensifies loyalty to the left because human beings are bound to feel affection for those who help them like themselves. Second, it ratchets up hatred of the rich because human beings naturally despise those whom they believe have cheated and oppressed them.

Every totalitarian leader from Stalin to Chavez has perpetuated the Myth. And it’s perfectly understandable why. It works.

At any given moment in any relatively free society the number of people who consider themselves successful and well-off are greatly outnumbered by those who are struggling. If you are a politician or a seeker of power, why would you waste your limited time and resources courting the 3% at the top of the heap when you can focus on the 60% at the bottom who are psychologically ready, willing and able to latch onto any external excuse given them for their failure.

Stalin scapegoated the privileged classes, Hitler the rich Jews, and Chavez the wealthy landowners.

Final observation

I agree with JLP. People who fail to succeed in life – however they define success- do so largely because of their own prior bad choices and not because, as the collectivist left would have us believe, that the rich conspired to keep them down.

I would much rather live in a society that rewards excellence even though it is achieved by a relative few, than one that coddles mediocrity merely because the mass of men have a talent for it.

The left may be selling the Myth, but some of us ain’t buying.

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