Beating up on the wealthy seems to be the order of day. I suspected that. But a recent Wealth Matters column touched a particularly raw nerve. It looked at how even people with sizable fortunes were concerned about money in this recession and the impact that could have on the rest of us.
Readers rejected the attempt to understand the concerns of the rich.
“That’s so stupid that you ought to be slapped for it,” one woman wrote.
My favorite began: “Bowties and Reaganomics are for losers. You can cry for the rich all you want, the rest of us will be happy to see them get taxed.”
The vehemence in these e-mail messages made me wonder why so many people were furious at those who had more than they did. And why are the rich shouldering the blame for a collective run of bad decision-making?
After all, many of the rich got there through hard work. And plenty of not-so-rich people bought homes, cars and electronics they could not afford and then defaulted on the debt, contributing to the crash last year.
ONE WAY
However, in this recession, anger flows one way. Eric Dammann, a Manhattan psychoanalyst, theorizes that a lot of people are angry that the rules of the game seem to have changed.
“There’s always been envy and hatred toward the rich, but there was also a strong undercurrent of admiration that was holding these people up as a goal,” Dammann said. “This time it’s different because it feels like it’s a closed club and the rich have an unfair advantage.”
What is troubling is that the anger has hardened for some into a suspicion that all wealthy people are motivated purely by self-interest, said Brad Klontz, a financial psychologist in Hawaii and a coauthor of the forthcoming book, Mind Over Money: Overcoming the Money Disorders That Threaten Our Financial Health.
“The script goes like this: Money is bad, rich people are shallow and greedy, and people become rich by taking advantage of others,” Klontz said. “But the same people who say money is bad say money is connected to their self-worth — they wished they had it and you didn’t.”
In boom or bust, envy is natural, and the desire for a level playing field is understandable. But so too is the desire to do better financially, to the point where it seems at times to be hardwired into our national psyche.
“To revile the rich is to revile the American dream,” said Robert Clarfeld, president of the wealth management firm Clarfeld Financial Advisors.
This resentment was so palpable, I started to wonder if it was having any effect — were the wealthy aware of it, and if they were, did they care?
TAX AND GIVE
A big concern among the wealthy right now, their advisers say, is not populist anger but how it might translate into tax-the-rich legislation on the federal and state levels. Their concern is twofold.
The first is that any tax increase has a direct impact on the income they withdraw from their portfolios. More money going to the government means less to live on.
“They’re very concerned about taxes going up,” said William Woodson, managing director at the Family Wealth Management group at Credit Suisse. “The percent that goes to taxes is significant if it’s a 15 percent capital gains vs 25 percent capital gains. It makes a big difference.”
The second concern may be disheartening for those who are angry at the rich, but like the museum exhibitions or scholarships they pay for: Increased taxes could cut into donations. While there is not a direct correlation between tax deductibility and personal donations, there is a correlation between increased taxes in a continued weak economy and charitable giving.
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