The federal surplus for the close of fiscal year 2000 was nearly double the surplus for the prior year. This is a problem! A massive, growing federal surplus is a signal that the government is taking too much of our money.
Back in the days of the federal deficit, we constantly heard about how bad that was — and rightfully so. Now that we have a huge federal surplus, we don’t hear any complaints. Why is this?
There are two major psychological reasons why the surplus is not widely seen as a problem.
The first is low self-esteem. Specifically: the low self-esteem of the people who make the most money. The people who make the most money in this society are penalized. How? By having to pay a higher tax rate in proportion to the higher amounts that they earn. The conventional term for this form of taxation is “progressive.” The honest way to phrase it is: punishment of success precisely because it is success.
I believe that many people who earn a lot of money know, or at least sense, that they are wrongly punished for being successful. They are disgusted by the spectacle of a Hillary Rodham Clinton — or a George W. Bush, for that matter — staking a moral and legal claim to a sizable portion of their income. This is why they seek every tax loophole they can possibly find. I don’t condemn them one bit for seeking tax loopholes. But I fail to see why they don’t simply form a political action group, schedule press conferences, distribute literature and proclaim, “This is our money. Stop penalizing our success!”
The second psychological factor is envy. In discussing this issue with people, I find that many agree with me that the government takes too much of their own money. But the vast majority cry no tears for the wealthy. Instead they say, “The rich have too much as it is. They should have to pay generous taxes.” Of course, would they support the government’s high taxes if they themselves happened to become rich? Would they abstain from taking advantage of tax loopholes? Most would not.
Ask yourself: what psychological motive could be involved here other than envy? Envy, Ayn Rand wrote, is hatred of the good for being the good. Note that most who seek to “soak the rich” would love to have more money themselves. Make no mistake: high taxation advocates love money. Hillary Rodham Clinton enjoys her million dollar book deals and cattle futures. The problem is that people like her see other people with more money, and they become angry, hateful, and resentful.
Envy and low self-esteem are neither admirable nor healthy qualities. Most of us can see this in the context of daily life when dealing with family, friends and co-workers. Why is it so hard to grasp this principle on the social and political level?