5 Lies the 1% Want You to Believe About Wealth

The wealthiest 1% of Americans have gotten a lot wealthier in the past few decades, while many other Americans struggle with higher prices for groceries and car insurance. Money is power, and the richest Americans have often manipulated the public conversation about wealth in ways that serve their best interests.

Let’s look at a few big myths about wealth that the top 1% want you to keep believing.

1. “We got all our money from hard work”

Only 27% of rich people are self-made. Lots of rich people inherited their money. Or they inherited privileges — education, connections, social capital — that enabled them to make more money. Or they got lucky from a one-time score — like cashing in stock options as one of the first employees at a billion-dollar tech startup.

Some got rich from crime (er, let’s say “ethically dubious activities”). The Sackler family (who founded Purdue Pharma) got billions of dollars from selling addictive opioid painkillers, the likes of which have killed hundreds of thousands of people in America.

2. “Paying taxes is the worst thing to happen to anyone ever”

Taxes buy civilization. I’m grateful to pay taxes. I keep voting to raise my taxes, but no politician will. My income tax bill has never been a burden, because I only owe more tax if I make more money. And America’s top tax rates are much lower than Europe and other wealthy democracies.

OK fine, rich Americans: let’s say you made $500 million last year and you have to pay 50% of that in tax (you’re probably not actually paying that much) — you still get to keep $250 million!

America has a pretty high rate of tax compliance compared to other countries — people willingly pay their taxes in America, and it matters. There’s an ancient concept called “noblesse oblige,” the idea that people who are wealthy should be generous, and that with great privilege comes great responsibility. I’d like to see more of this noble spirit from the top 1%.

3. “More money won’t solve your problems”

Reality: money can solve lots of people’s problems. Money can buy food, car repairs, and therapy. Money can keep a roof over your head and get your child’s worrisome, persistent cough looked at by a doctor. Money can buy time, comfort, and peace of mind.

America mostly solved child poverty during the pandemic through the temporarily expanded Child Tax Credit in 2021. Giving more money to lower-income families helped them pay their bills and take care of their children. Being a parent, and just a person in general, is much less stressful when you have enough money.

It’s completely baffling to me that in a country where most people don’t have enough money, the wealthiest people on Earth have convinced so many others that “money is not the answer.”

4. “A rising tide lifts all boats”

Economic growth ideally should make everyone richer, but that’s not happening in America — wealth inequality has risen in the past 30 years, and the top 1% of Americans now have more wealth than the bottom 90%.

Some amount of wealth inequality is perhaps inevitable, and may have good effects, because it gives people an incentive to invest, take financial risks, and build hugely successful companies. But America has levels of wealth inequality where a few guys have hundreds of billions of dollars, and 63% of people don’t have $500 for an emergency expense.

When wealth inequality gets too severe, even aside from the moral and ethical issues, it can hurt economic growth. Consumer spending is 70% of America’s economy. If middle class people can’t afford to buy homes and cars and groceries while the top 1% get even richer, ultimately we are all going to be made poorer for it.

Warren Buffett, to his credit, is speaking out about the problem of wealth inequality. He’s also talked about tax reform, and how he believes it’s important for people like him who make billions of dollars from investments to pay a higher tax rate than their secretaries.

5. “We’re not rich”

Even the world’s wealthiest people still worry about their personal finances. I was listening to a podcast the other day with a successful entrepreneur and investor who said his net worth is over $100 million, and he still feels financially insecure.

Good for him for being so vulnerable and honest. But what’s the point of having all that money if you’re still living in fear?

Bottom line

I’m not trying to sound harsh, bitter, and conspiratorial about wealthy people. We’re all human beings, and most people are doing the best we can within our own limitations, biases, and cultural bubbles. Lots of people — including me! — have some degree of unearned privilege.

I believe in economic growth and hard work and hustle, of the dignity of labor and human potential. I want human ingenuity and enterprise to be richly rewarded. I love creativity and entrepreneurship, and I love making money, spending money, investing money, and donating money. I don’t want to live in a gray, sclerotic, bureaucracy-choked Socialist dystopia.

But I believe that America’s economy has gotten so far out of balance, with so much wealth going to the top 1%, that it’s endangering our entire economic system (and our democracy). The world is crying out for help. We’ve got to pay for climate change. Formerly middle-class Americans are dying younger from disease, drugs and despair — U.S. life expectancy has declined, while the rich get richer. None of this is sustainable or healthy or “good.”

We need generosity and shared prosperity, not tech billionaires buying private islands. I want to live in a beloved community of relative equals, not a nightmarish oligarchy. People who are fantastically fortunate should be humble leaders and good citizens — and pay their taxes.