Millionaires, Taxes, and the Tall Poppy Syndrome.
Capital goes where it is welcome and stays where it is well treated. Walter Wriston
Wriston's capital included both financial and human capital (founders, CEOs, talent, and ideas). The latter is often overlooked in most discussions, especially political ones, whose focus is on economic capital. TPS's interest is in the human capital (TPs).
Specific taxes targeting the wealthy are a form, or at least a basic version of TPS, especially when considering human capital, which is the source of financial capital (see Are England's Millionaires Being Tall Poppied?). When additional revenue is needed, politicians often call for higher taxes on the wealthy. This is short-term thinking that wins votes but does not address the root causes it frequently creates.
In 2022, the average income tax rate was 14.5 percent. The top 1 percent of taxpayers paid an average rate of 23.1 percent, which is six times higher than the 3.7 percent paid by the bottom half of taxpayers. The income share of federal income taxes paid by the top 1 percent was 40.4 percent.
The top 10 percent paid 72 percent of all taxes. The top 50 percent of taxpayers paid 97 percent of federal individual income taxes, while the bottom 50 percent paid only 3 percent.
Washington, which does not have an income tax, is considered to have one of the most regressive tax systems in the country. This means that lower-income residents pay a larger portion of their income than wealthier residents. Washington has a 7% capital gains tax on profits from the sale of certain long-term assets, like stocks and bonds, that exceed $250,000.
The Seattle Social Housing Tax is a separate tax that applies to employees based in Seattle and imposes a 5% levy on annual earnings over $1 million, starting January 1, 2025. Seattle is home to 53,100 millionaires, 127 centi-millionaires—those with more than $100 million in wealth—and 11 billionaires. Compared to the previous year, Seattle saw a decrease of 1,100 millionaires and three centi-millionaires.
A socialist Seattle mayoral elect, Katie Wilson, who has never held public office, called for more homeless shelters and a new local capital gains tax to generate progressive revenue from Seattle’s wealthy. She plans to appoint a cabinet of "exceptional" leaders who reflect the city's diversity.
On the other coast, New York City’s mayor-elect, Zohran Mamdani, plans to raise taxes on the wealthy to fund free transit, affordable housing, and government grocery stores. He also vowed to limit annual rent increases to 4 percent.
If you think too dumb, do not think too much.
The economic law of supply and demand is simple and reliable, generally saying that low supply results in higher prices. Since builders struggle to make a profit, fewer properties are constructed. Capping rent leads to fewer new properties and less affordable housing.
Los Angeles limits rent increases in properties built before 1978 to a maximum of 8 percent annually. The city council recently voted to cut the limit to 4 percent. Since 2019, building permits have dropped by 20 percent, while permits in many other cities have increased.
Analysis of TPS mainly focuses on emotional intelligence (EI) and dynamics in interpersonal relationships. I believe most of the dark emotions that fuel TPS are rooted in the seven deadly sins (see Anatomy of the TALL POPPY SYNDROME). By identifying the dark emotion in the cutter or TP, blame can be assigned and, hopefully, trigger some behavioral change in the individual.
In today's case study, the millionaire's behavior doesn't seem unusual. The politicians are doing what they always do: making promises and sometimes passing laws that are good for votes but bad for the country.
The cutters seem to be the ones undermining the success of the millionaires. They feel left behind and think they cannot reach the American Dream (blame politicians, not millionaires). Some are envious, angry, and perhaps unmotivated. These emotions are commonly found among cutters, but they do not reflect the true nature of the voters who elected the mayors mentioned above.
Buddhist Four Noble Truths
The Truth of Suffering (Dukkha)
Suffering is an inherent part of life, encompassing everything from physical pain and illness to emotional distress and dissatisfaction. Life consistently involves suffering in various forms, even when circumstances seem good, due to anxiety, uncertainty, and change.
The Truth of the Origin of Suffering
The root cause of suffering is desire and attachment. Craving and clinging to temporary states, things, or experiences leads to ongoing dissatisfaction and pain. This craving sustains the cycle of rebirth and keeps us trapped in suffering.
The Truth of the Cessation of Suffering
It is possible to end suffering by eradicating its causes—namely, craving and attachment. Enlightenment involves attaining a state where suffering has ceased, known as nirvana, bringing release from the cycle of rebirth.
The Truth of the Path Leading to the Cessation of Suffering
There is a practical path to overcome suffering: the Noble Eightfold Path. This consists of ethical, mental, and wisdom practices such as right view, intention, speech, action, livelihood, effort, mindfulness, and concentration. Following this path leads to liberation and true happiness.
Costs for goods and services have increased by 25 percent since 2020. Inflation may be even higher in big cities, especially in New York, which was ranked the second-most-expensive city in the world. Young and low-income earners are hit the hardest. The young are suffering (The Truth of Suffering) and feel they will never reach their financial expectations.
Buddhists believe that eliminating the causes of suffering is essential for achieving liberation. These fundamental causes are ignorance, craving, and hatred. Ignorance is not just a lack of information; it is the failure to understand the true nature of reality and that suffering is a natural part of life. While poor countries recognize this, many Americans, especially those living in the centers of the universe, do not.
People often seek a cause or scapegoat for their suffering, frequently blaming the government, especially President Trump. Victim mentality usually follows. If left unchecked, dark emotions like anger, frustration, and resentment can grow. Once these negative feelings take hold, someone must be cut down. The political winner will be the one who offers the most freebies.
Not only that, but we rejoice in our sufferings, knowing that suffering produces endurance, and endurance produces character, and character produces hope. Romans 5: 3-4 (ESV)
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