In Defense of Rich People-Wealthy Are Becoming Endangered in California
Ventura Star, March 21, 2005
By Terry Paulson, PhD

It's time for a little truth telling about "rich people" in America. Contrary to the political rhetoric that you often hear, rich people make a big difference to us all. It is affluent Americans who put their wealth at risk by investing in the small businesses and corporations that fuel our economy and create our jobs. It is the generous donations to non-profit organizations from affluent Americans that sustain the lion's share of the budgets for countless philanthropic activities. It is also affluent Americans who pay the vast majority of the income taxes that allow our government to provide services for the rest of us.

Some politicians would have us believe that successful entrepreneurs are not "working Americans." Entrepreneurs don't have regular working hours; instead, they get to be concerned about the future of their companies and the paychecks for their employees 24/7! That full-time job makes them very special "working Americans." Sure, they reap the benefits of their success, but they also take the brunt of their failures. The rich do not always get richer! Sometimes they go bankrupt. Data suggests that the amount of money earned by California's richest citizens shrunk by more than 20% from 2001 to 2002 during the economic downturn.

Some suggest that the affluent don't pay their "fair share" of government taxes. Like all Americans, the wealthy work hard to minimize their taxes, but those who avoid paying any taxes are the exception, not the norm. In fact, at the end of the day, if President Bush is successful in getting his way in making his tax relief plan permanent, the so-called "rich" will be paying a higher percentage of the income tax load in America than when Bush started his tax relief plan. Under the Bush plan, the percentage tax relief has been greater for the low-income Americans, and even more low- income Americans are now paying no income taxes at all. Although the amount returned to the rich is greater because they have paid more income taxes, the percentage returned to them is much less. In short, contrary to what you hear, the affluent are paying a higher percentage of the load under Bush's leadership!

In California, our state treasury is also highly dependent on taxes from affluent citizens. When they do well, a good percentage of their yearly income benefits the rest of us Californians. When they do poorly, as they have in recent years, state revenue falls! Some want to take even more. In the November election, California citizens voted to increase taxes on the most wealthy in order to pay for mental health services. Is it any wonder that even more of our affluent residents are moving to states where they are more appreciated and can keep more of what they have earned? When they move, they often take their businesses and the jobs those businesses create with them. Our goal should not be to tax these people more, but to build a state environment where more Californians become wealthy, and we keep them that way!

Winston Churchill said it well: "Some regard private enterprise as if it were a predatory tiger to be shot. Others look upon it as a cow that they can milk. Only a handful see it for what it really is-the strong horse that pulls the whole cart."

Thomas Sowell, author of Basic Economics, points out something that people tend to forget: "Those who rail against profits and 'greed' seldom stop to think through what they are saying, much less go check the facts. Most of the great American fortunes-Rockefeller, Ford, Carnegie, etc.-came from finding more efficient ways to produce a product or service at a lower price and attract more customers. If making a fortune represents greed, then greed is what drives prices down."

A profit isn't what successful companies take from their customers; it is what they earn by making a difference for them. By achieving business goals, corporations help their customers by providing a service or a product that helps them do things better, cheaper, more effectively or in a new way. By making a difference for customers, they get to make a difference for themselves-they get the satisfaction of serving and the opportunity to make a good profit. Profitable corporations and the entrepreneurs and investors who reap the benefit of investing in them are what keep our American economy strong! They fuel the dream. After all, when was the last time you got a job from a poor person?

It's been said that the charity of the poor is to wish the rich well. Instead of taking them for granted and attempting to tax them out of our state, we should thank them for carrying most of the load for the rest of us. They are one endangered species we do not want extinct!

Dr. Terry Paulson is a psychologist, speaker and author of The Dinner: The Political Conversation Your Mother Told You Never to Have

—May we never forget how truly blessed we are!