Americans want lower tax rates on dumb luck

Americans seem increasingly comfortable with Obama’s calls tax-the-rich. This isn’t, however, because people generally believe that taxing the hell out of the wealthy is the best way to fund the government. People tend to support heavy taxation of high earners out of jealousy and greed. They don’t perceive that they have any chance of becoming wealthy so it is always the ox of someone else being gored. In other words, “tax the rich” is a simple proxy for “tax someone else”.

That is a bold statement but I think I can demonstrate its validity with this.

In February, the online pollster YouGov asked a representative sample of 3,500 American adults what they thought would be a “fair amount of tax” to pay on lottery winnings. The survey specified different amounts of winnings, ranging from $1 million to $100 million. …

Less than a quarter of respondents chose a tax rate of 30 percent or higher on any level of lottery winnings. The vast majority thought that a reasonable amount to pay was much lower, with the average being only 15 percent. Democrats and Republicans differed only a little: The average rate preferred by Republicans was 14 percent, compared with 17 percent for Democrats.

Amending my comment above: “People don’t perceive that they have any chance of becoming wealthy through investment, enterprise and work”. They do believe, however, that they have a shot at becoming wealthy through lottery winnings.

When asked if the government should heavily tax wealthy individuals who become rich via investment, industry, delayed gratification, risk and work, Americans tend to see this as “taxing other people” and polls show increasing numbers of Americans support taxing other people. Heavily taxing other people is a fine thing, the polls tell us.

On the other hand, when asked if the government should heavily tax wealthy individuals who become rich via dumb luck, we see a very different response. In this circumstance people imagine themselves as the target of the burdensome tax and are not so quick to demand the government confiscate a large percentage of their own wealth.

We can only conclude, therefore, that opinions expressed in polls have little to do with the best way to design tax codes and everything to do with class warfare. Americans are susceptible to Obama’s demagoguery of tax rates and when he engages in it, he is simply stirring up of hate and division.

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3 Responses to Americans want lower tax rates on dumb luck

  1. Greg B says:

    Well of course.
    As soon as they win, it is their money. Not someone else’s.
    And we all know, lotteries are nothing more than a disguised tax on poor (and deluded) people.
    One that they willingly line up to pay.

  2. Notamobster says:

    Absolutely brilliant use of deductive reasoning, RD. I love it when you distill an idea down to its lowest common denominator. Your ability to see and define human nature in situations where most would never imagine looking, is still astounding, many years into our friendship.

    Thank you.

  3. R.D. Walker says:

    You are welcome and thank you for the nice compliment.

    I like proofs like this and it is hard to debate that human nature is, at its core, selfish. To expect anything else is to be liberal and ignorant… but I repeat myself.