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Jewish World Review May 24, 1999 /9 Sivan 5759

Thomas Sowell

Thomas Sowell
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Income, taxes and demagoguery

(JWR) ---- (
WHEN YOU HEAR POLITICIANS and intellectuals talking -- often very loudly -- about "the rich," do you ever wonder who they are talking about and how much money those "rich" people make? And do you ever wonder why those who are making so much noise about the rich don't just come right out and tell us what kind of money they are talking about?

Instead, we hear about the top 10 percent or the top 5 percent. But why so squeamish about saying how much money that represents?

There is a reason for all this noise about the rich ---- and for all the silence about how much money is involved. Talking about the rich is politically very useful for whipping up envy and getting support for heavy taxes. But the incomes of most people in the top 5 or 10 percent are a lot less than most Americans would consider rich.

If the incomes of all the people in an American household adds up to $72,000, that puts them in the top 10 percent of all households. But, when a husband and wife make $36,000 apiece, most of us would not consider them rich. Nor would we be likely to think that putting heavy taxes on them would be a good idea.

Any attempt to lower the taxes of such a couple is guaranteed to bring out the noisy demagogues in Congress, denouncing "tax cuts for the rich" because people in the top 10 percent would benefit. But the only people whose taxes can be cut are the people who are paying taxes -- mostly people in the upper brackets, who are not rich.

Even the top 5 percent of households do not usually fit what most of us would consider to be the rich. If all the incomes in your household add up to $127,000, then you are one of those top 5 percent who are so rich that the government thinks it should be taxing you like mad.

That's $63,500 apiece if husband and wife are both working ---- about what mid-level civil servants would make. Or, if only one person is working and earning the whole $127,000 alone, that is about the average salary of a college president -- and much less than the average income of a college athletic coach. It is nowhere in the ball park compared to the incomes of top lawyers, corporate executives or professional athletes.

What about the really rich people --- the ones with their own private jets and mansions here and there? There are such people but there are not enough of them to affect the statistics very much. Moreover, genuinely rich people usually have tax accountants to go with their jets and mansions, so that they can keep their jets and mansions.

The people who really get hit hard by taxes that are supposed to be soaking the rich are ordinary people who happen to be at the stage of their lives where they are earning more than they did in years past and more than they will be earning in the future. These are largely people in their 50s or early 60s who have worked their way up to a decent income and are seeing much of it drained away by politicians who proclaim that "the rich" ought to pay "their fair share."

This "fair share" is as completely undefined as "the rich" themselves. The demagogues don't dare talk specifics in either case or people will start to see through them.

If we look at wealth instead of income, it becomes even more obvious that "the rich" are not a different class of people but largely people in older age brackets who have accumulated some money in a pension fund, paid off most of their mortgage and put a little money aside to see them through retirement and the illnesses of old age.

The average net worth of households headed by someone 65 years old or older is more than 10 times the net worth of households headed by someone under 35 years of age. But these aren't different classes of people, because everyone who is 65 or older was once 35 or younger.

Many of the statistical "poor" are just as fictitious as the statistical "rich." For most Americans, being in the bottom 20 percent of the income distribution is strictly a transitional phase. More of them rise to the top 20 percent than remain at the bottom, and the rest of them are scattered all in between.

Most Americans are likely to have incomes in the top 10 percent at some point or other during their lives. So when politicians start talking about taxing the rich, send not to know for whom the bell tolls. It tolls for thee.


05/18/99: Random thoughts
05/14/99: Aborted knowledge
05/10/99: The new "fairness"
05/04/99: Holding parents responsible
05/03/99: Exit strategies
04/28/99: Tragedy and farce
04/26/99: Guilt and cop-outs
04/21/99: Choosing a college
04/16/99: When success fails
04/13/99: A photo-op foreign policy
04/09/99: Russia and the Serbs
04/06/99: Random thoughts
03/31/99: Irresponsible "experts"
03/29/99: Another Doleful prospect?
03/23/99: Random thoughts
03/22/99: Loving enemies
03/19/99: Naming names
03/15/99: Undermining the military
03/10/99: Joe DiMaggio -- icon of an era
03/02/99: Facts versus dogma on guns
03/01/99: Losing the cultural wars
02/22/99: "Saving" social security
02/18/99: Too many Ph.Ds?
02/8/99: A national disaster
02/8/99: Economic fallacies in the media: Part II
02/5/99: Why economists visit dentists so often
02/2/99: Warning: Good news
01/29/99: What is at stake?
01/26/99:Moral bankruptcy in the schools
01/22/99: Who is going to convict Santa Claus?
01/19/99: Seeing through the spin
01/13/99: A trial is a trial is a trial
01/11/99:Trials and tribulations
01/08/99: Rays of hope
01/04/99: Random thoughts
12/31/98: The President versus the presidency
12/29/98: The time is now!
12/23/98: World-class hypocrisy
12/21/98: The spreading corruption
12/17/98: Politically "contrite"
12/16/98: Polls and partisanship
12/14/98: The "non-profit" halo
12/11/98: Corruption and confusion
12/03/98: The health care "crisis"
11/30/98: Knowing what you are talking about
11/23/98: The impeachment legacy
11/23/98: Random thoughts
11/19/98: Tales out of bureaucracies
11/16/98: Scholarships based on scholarship
11/12/98: Forward march
11/09/98: Moral outrage
11/05/98: Will the Republicans ever learn?
11/02/98: A voter's duty
10/30/98: The poverty pimp's poem
10/29/98: Random thoughts on the election
10/27/98: "Partisan" and "unfair"
10/23/98: Ed-u-kai-tchun
10/21/98: McGwire, Maris and the Babe
10/16/98: Lightweight Boxer
10/14/98: A strange word
10/09/98: Impeachment standards
10/08/98: Alternatives to seriousness
10/07/98: Heredity, environment and talk
10/02/98: A much-needed guide
10/01/98: Starr's real crime
9/24/98: Costs and power
9/18/98: Are we sheep?
9/16/98: Judicial review
9/15/98: Hillary Rodham Crook?
9/14/98: Taking stock
9/11/98: Moment of truth
9/04/98: Random thoughts
8/31/98: The twilight of special prosecutors?
8/26/98: "Doing a good job"
8/24/98: America on trial?
8/19/98: Played for fools
8/17/98: A childish letter
8/11/98: Hiding behind a woman
8/07/98: A flying walrus in Washington?
8/03/98: "Affordability" strikes again
7/31/98: Random thoughts
7/27/98: Faith and mountains
7/24/98: Clinton in Wonderland
7/20/98: Where is black 'leadership' leading?
7/16/98: Do 'minorities' really have it that bad?
7/14/98: Race dialogue: same old stuff
7/10/98: Honest history
7/09/98: Dumb is dangerous
7/02/98: Gun-safety starts with
parental responsibility
6/30/98: When more is less
6/29/98: Are educators above the law?
6/26/98: Random Thoughts
6/24/98: An angry letter
6/22/98: Sixties sentimentalism
6/19/98:Dumbing down anti-trust
6/15/98: A changing of the guard?
6/11/98: Presidential privileges
6/8/98: Fast computers and slow antitrust
6/3/98: Can stalling backfire?
5/29/98: The insulation of the Left
5/25/98: Missing the point in the media
5/22/98: The lessons of Indonesia
5/20/98: Smart but silent
5/18/98: Israel, Clinton and character
5/14/98: Monica Lewinsky's choices
5/11/98: Random thoughts
5/7/98: Media obstruction of justice
5/4/98: Dangerous "safety"
5/1/98: Abolish Adolescence!
4/30/98: The naked truth
4/22/98: Playing fair and square
4/19/98: Bad teachers"
4/15/98: "Clinton in Africa "
4/13/98: "Bundling and unbundling "
4/9/98: "Rising or falling Starr "
4/6/98: "Was Clinton ‘vindicated'? "
3/26/98: "Diasters -- natural and political"
3/24/98: "A pattern of behavior"
3/22/98: Innocent explanations
3/19/98: Kathleen Willey and Anita Hill
3/17/98: Search and destroy
3/12/98: Media Circus versus Justice
3/6/98: Vindication
3/3/98: Cheap Shot Time
2/26/98: The Wrong Filter
2/24/98: Trial by Media
2/20/98: Dancing Around the Realities
2/19/98: A "Do Something" War?
2/12/98: Julian Simon, combatant in a 200-year war
2/6/98: A rush to rhetoric

©1999, Creators Syndicate