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Advocates of “Tax the Rich” Please Read The Millionaire Next Door

By Thomas J. Stanley on Nov 21st, 2011 in Studying the Wealthy

In a recent article from The American Thinker, Chris Corrodo provides an excellent counter to those who advocate increasing the taxes of the so-called “rich.”  He briefly discusses the characteristics of the millionaires profiled in The Millionaire Next Door


Thomas J. Stanley’s insightful book tells us that the majority of wealthy people live quite frugally, and about 80% of them are first generation rich, receiving little to none of their wealth from inheritance.  It’s hard [for advocates of tax the rich] to talk about the greedy rich guy when he drives a 2004 pick-up truck and gets his clothes from Ross.


Instead, the conventional picture of wealth as a morally questionable man in an Italian suit, driving a Ferrari onto his yacht before enjoying a cruise on the Mediterranean while smoking fine cigars lit with $100 bills — and don’t forget about the corporate jet.  This is the picture of wealth from the perspective of the left, and it is very politically advantageous.  If anyone deserves to be resented and hated for his excesses, it’s certainly this oppressive character, no matter how fictitious he may be. 


The motives of the millionaires next door are misunderstood by most people.  Building wealth is much more about becoming financially independent than living in a mansion surrounded by expensive artifacts.


 




 

3 responses to “Advocates of “Tax the Rich” Please Read The Millionaire Next Door”

  1. Swintah says:

    “anyone deserves to be resented and hated for his excesses…”

    Ummm, I’m a part of “THE LEFT” (according to T.V., a monolithic bloc of commies and America haters), and I don’t hate rich people. I hate people who game the system to their favor to become rich, while pushing the costs on the public. I don’t hate rich people: I hate cheaters.

    It’s pretty clear you didn’t read this when I last posted this link, I think it will clear up some of your misconceptions: http://www.rollingstone.com/politics/blogs/taibblog/owss-beef-wall-street-isnt-winning-its-cheating-20111025

  2. Denno says:

    Dr. Stanley, thank you for this post. BTW, I always find it interesting that those who disdain people who made their wealth through political favors somehow believe that the people who doled out those same favors are the ones who should write laws and regulations to ostensibly make things better.
    I enjoy your blog very much.

  3. Mark says:

    Dr. Stanley, what seems to get lost in these discussions is the distinction between income and wealth. The political discussion is focused on whether or not to tax the “wealthy,” although the tax would be on income. As you have demonstrated, most millionaires next door are wealthy in terms of assets, but do not necessarily have huge incomes. They maximize their wealth primarily by playing good “defense” (i.e., being frugal). It is the free spenders with high incomes who would pay a slightly higher top marginal rate and be most affected by income tax increases. A return to a top marginal rate from 10 years ago will likely cause a high earner who is also frugal to pay a bit more taxes in lieu of a bit more savings, but their lifestyle won’t be changed.

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