Deroy Murdock
Thursday, December 23, 2010
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.”
Sen. Bernie Sanders of Vermont, a self-styled socialist, spent nearly nine hours on December 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 apiece) earned 20 percent of America’s Adjusted Gross Income (AGI) in 2008, according to IRS data analyzed by the Tax Foundation. True. They also paid 38 percent of all federal income taxes. The top 5 percent (with incomes exceeding $159,619) earned 34.7 percent of AGI and paid 58.7 percent of 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?
In contrast, the bottom 50 percent of taxpayers generated 12.8 percent of AGI and paid 2.7 percent of all federal income taxes.
High-income taxpayers also cough up state and local levies and often pay 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?
“These people who are worth hundreds of millions of dollars,” Sanders stated on the Senate floor, “Maybe they’ve got to go back to the Bible or whatever they believe in understanding that there is virtue in sharing, in reaching out, that you can’t get it all.”
Sanders should appreciate these IRS data:
To be surgically precise, as Ryan Ellis of Americans for Tax Reform notes, an IRS review of Returns with Itemized Deductions (columns CI and CJ) indicates that in tax year 2008, Americans who earned at least $200,000 filed 3,912,225 tax returns or 9.96 percent of that year’s 39,250,369 total returns. This group deducted $72,336,640,000 in charity, or 41.83 percent of the $172,936,002,000 for such deductions that all filers claimed. In short, the top 10 percent of taxpayers paid 42 percent of all charitable deductions, worth $72 billion in 2008 alone.
To understand wealthy Americans’ “virtue in sharing,” consider The 2010 Bank of America Merrill Lynch Study of High Net Worth Philanthropy. Conducted by Indiana University’s Center on Philanthropy and released November 9, this fascinating document (recommended by the National Taxpayers Union’s Andrew Moylan) finds rich people doing what Senator 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 multi-millionaires, 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 volunteered — nearly triple the national figure. The average rich respondent volunteered 307 hours. Rather than merely write checks, the average wealthy American last year gave to charity the equivalent of 38 eight-hour shifts.
The Center on Philanthropy’s researchers valued each hour of voluntarism at $20.85. So, the average rich American’s 307 volunteer hours equaled $6,400.95.
“High net worth households play an important role in the philanthropic landscape,” the Bank of America study concluded. “They give between 65 and 70 percent of all individual giving and between 49 and 53 percent of giving from all sources, which includes giving from corporations, foundations, and both living and deceased individuals.”
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.
That same year, Lincoln Center’s New York State Theater was redubbed the David H. Koch Theater after the businessman and free-market activist contributed $100 million to renovate the New York Ballet’s home stage.
Nonetheless, some remain utterly unimpressed with America’s wealthy. According to Cape Cod cops and fire investigators, on November 24, an arsonist torched a $500,000 house under construction in Sandwich, Mass. On December 2, an arson attempt almost destroyed a Marston’s Mills home. At both crime scenes, someone graffitied “F— the rich.”
On December 14, Clay Duke opened fire on a Panama City, Fla., school board meeting before fatally shooting himself. His online “last testament,” linked to left-wing websites, including WikiLeaks and mediamatters.org, and echoed today’s anti-rich themes.
“I was just born poor in a country where the Wealthy manipulate, use, abuse, and economically enslave 95% of the population,” Duke wrote. “Our Masters, the Wealthy, do as they like to us.”
While most wealthy people acquire their money legally, 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.
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