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It takes a village to raise a millionaire

(Page 2 of 2)



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But the success of the wealthy is built on a foundation provided by society and its many members, argues Chuck Collins, one of the authors of the UFE study. The study goes through case after case of how society stands behind wealthy individuals, and, indeed, of how often the rules are tilted in their favor.

Google's existence, for instance, hangs on the fact that the federal government spends tens of billions of dollars a year on research, mostly in grants to universities, including for creating and improving the Internet.

Also, wealthy CEOs depend on a multitude of brilliant and less brilliant employees, plus a system of corporate governance that is stacked in favor of excessively large salaries.

Many of the rich "were born on third base," the study says.

For example, prosperous parents give their children a head start by buying homes in a good school district, financing college, and contributing to the purchase of a child's first house or condominium.

There's nothing wrong with that.

But 75 percent of Americans inherit nothing. They, too, may benefit from the free-enterprise system, financial markets, democracy, law and order, a public school system, libraries, museums, and other aspects of modern society. It can be argued, though, that the rich especially gain from this system.

"The notion that wealthy individuals might have an obligation to pay something back to society is a radical departure from today's individualistic, antigovernment ethos," writes Scott Klinger and two other authors of the UFE study. "Many successful people view government and society as irrelevant to their good fortune, or worse, a hindrance. They attribute their success to their own character, values, and performance."

The question is: If the wealthy gain more than others from the system, how much should they give back?

In 2001, with President Bush's tax cuts in effect, the wealthiest 1 percent of households paid 41.7 percent of their income in federal, state, and local taxes while the middle tier of householders paid 28.5 percent, according to one study. But the share paid by those super-rich will fall to 36.1 percent by 2010 with only a slight decline for the middle class.

Whether that lower rate will prevail depends on the fate of the estate tax, which is slated to disappear in 2010 then reappear in 2011. The Bush administration wants to eliminate it permanently. UFE and other liberal groups want to preserve it, which would again bump the tax rate for the superwealthy above 40 percent. Responsible Wealth has persuaded 1,700 millionaires and billionaires to sign a petition against its abolition.

As for those at the bottom of the economic heap - like those students at the alternative high school in Boston - the climb upward looks longer and harder than ever.

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