This next “why”
question is interesting because Social Security is,
in real terms, a pretty sweet deal for Richie Rich—one
of the most regressive taxes there is, because (a)
it is a tax on wages, not returns from capital (which
means that Warren Buffett and Bill Gates could cut
their SS payments to zero by eliminating their salaries
without noticeably affecting their income, let alone
their wealth) and (b) the wage limit on contributions
means even if Gates pays himself $100M in salary,
he pays the same $5580 a year as does a mid-level
computer programmer in Silicon Valley.
It is also hard to see how the conservative antipathy
could be based on the normal macroeconomic canard
about the effects of taxes on desire to work. Though
the average number of hours worked per week per employee
has stayed relatively flat over the last few decades,
the number of hours worked per family per week has
increased by 11% since 1975. Americans now have longer
work hours overall than citizens of any other developed
country. It is hard to imagine that the same folks
who preach to us about family values want parents
to spend even less time at home.
And I am not persuaded by the conservative claims
of concern about our nation’s savings rate.
While the Social Security “trust fund”
does not count as individual savings, I think a pretty
good case can be made for the proposition that the
$1.5 trillion dollars by which Social Security taxes
have exceed payments over the last 20 years—a
sum that has been invested in interest-bearing US
Government obligations—count as savings on a
societal level. And if you concede that point, privatization
will not budge the national savings rate.
So it is difficult to avoid the conclusion that the
basis for the conservative antipathy is neither concrete
nor based on genuine self-interest—Social Security
is simply another philosophical windmill to them.
Like a Japanese anti-Semite, they hate something they
have little or no direct experience with, just because.
And like Don Quixote, they see such overwhelming evil
in that windmill that they will do great damage to
see it destroyed.
Thus: why? What is the source of this animosity?
It seems to me that a case can be made that the hostility
of conservatives in general, and George Bush in particular,
is an inevitable consequence of that great American
myth, the Horatio Alger story.
From very early on, an essential aspect of American
mythology has been the idea of the self-made man.
Landed gentry were never an official part of the landscape
here. Immigrants could arrive in the “land of
opportunity” with nothing and achieve wealth
through individual effort. And so in a place that
fancied itself a meritocracy, and where the coin of
the realm was and largely remains the literal coin,
it was perhaps natural for those who moved up to be
seen as deserving of the fruits of their labor.
But when Henry Ford and John Rockefeller and Prescott
Bush died, their money did not. Their children inherited
it. Our collective mythology does not cover this outcome:
if a rags-to-riches journey confers merit, inherited
wealth does not. And in a society built on hard work,
a natural reaction to getting without effort is guilt.
In older, class-based societies, my sense is that
inherited wealth tends not to engender guilt. There
is a sense of noblesse oblige, but little concern
as to whether an inheritance is deserved.
The American system for many years reflected a different
view. A progressive income tax code, with top rates
ranging during the time from Roosevelt to Johnson
from 63 to 94 per cent during WWII, could be seen
as evidence of a view that wealth was as much a function
of the good fortune of circumstance as of atomistic
individual acts. Top estate tax rates, which ranged
from 50 to 77% during the same period arguably bespoke
a desire to make some attempt to reduce (though certainly
not eliminate) the advantages of birth.
Society to a large degree stigmatizes what it officially
dislikes through taxation – witness tobacco,
alcohol, and, until relatively recently, wealth in
general, and inherited wealth in particular.
That view of wealth has changed dramatically over
the last 20 years or so. Top income tax rates have
been cut somewhat, but taxes on wealth have been cut
even more. And although estate taxes have only come
down to 50%, estate planning loopholes now allow most
of the wealthy to largely avoid them. In sum, it is
now incredibly easy for big money to substantially
avoid being nicked as it passes from one generation
to the next.
It stands to reason that attitudes might take longer
to change than tax laws. So perhaps there are a number
of trust fund Baby Boomers who, at a subconscious
level, are not completely at ease with having been
born on third base, despite public claims about the
home runs they subsequently hit.
Which brings us, of course, to George W. Bush. I’m
no shrink, though I have previously exercised my Constitutional
right to psychoanalyze our Commander in Chief. But
there is abundant evidence in Dubya’s biography
to support the notion that as a young man he was profoundly
uncomfortable with certain aspects of his legacy.
His early coping strategy seemed to be to avoidance
of the scion role, but his toolset was limited. Even
the most spoiled brat must choose between following
the rules or breaking them – and break them
he did. But the most powerful President in recent
memory can do what the rebel without a cause could
only dream of: he can change the rules.
And so, finally, we come to a possible answer to
the “why” question. One of Dubya’s
newer rhetorical sleights is the use of the phrase
“ownership society” to describe the dismantling
of the social safety net and the individualization
of risk. But when George Bush talks about the ownership
society, what he really means is that he wants to
create an atmosphere in which there is no guilt associated
with ownership – a place where those who inherit
wealth will feel unapologetically entitled to it.
This, then, is the New Entitlement. Where once progressive
social programs that redistributed resources from
rich to poor were (perhaps unfortunately) called “entitlements,”
for unhappy “haves” like our President,
the term now means “what’s mine is mine,
and you ain’t getting any of it.” And
so he schemes to end the limits on transgenerational
transmission of wealth by framing the inheritance
tax as the “death tax.” He demanded sharp
reductions in taxation on income from wealth (dividends
and capital gains), while tax rates on labor are largely
unchanged. And he jousts with the Social Security
windmill because a system that rounds off the sharp
edges of poverty and misfortune is a reminder to everyone
of the role of chance in the distribution of the wealth.
And if net worth depends even in part on chance, his
claim of entitlement is suspect.
John Steinberg bloviates regularly at www.bluememe.blogspot.com