Sometimes it’s easy to blame the rich. Tax the rich—after all they make so much money—at least the adage goes. Certainly, some political candidates have popularized that notion. Many people blame the rich for being greedier than the rest of us.
But is that really true?
Just recently, Benjamin Priday of Texas A&M University, wrote an article with one central question: “But are the rich really stingier than the rest of us?” Priday is a doctoral candidate of economics who studies charitable giving.
While noting that the large gifts of the rich receive ample headlines, Priday points to the many previous studies that have established the idea of the selfish rich. However, Priday and Professor Jonathan Meer performed fresh analysis of data from the University of Michigan’s Panel Study of Income Dynamics and the Lilly Family School of Philanthropy’s Philanthropy Panel Study, along with IRS data. They concluded the following:
- The Rich are inclined to give. The likelihood of donating anything at all increases with income and wealth. Someone making $400,000 per year, for instance, is 27 percentage points more likely to give than someone making $17,000.
- The Rich give more as a percentage of income. On average, families give 1.4% and 2% of their income. But the rich, as a percentage of income, are typically between 2.3% to 3.4%.
- The Rich don’t just give to museums and art galleries. One of the misconceptions is that giving for the rich is to their children’s private schools or to get their name on a building or project, whereas those of more modest means give to churches. In reality, Priday found that low-income Americans give 50% of their total donations to churches, synagogues and mosques. The rich? They gave between 35-45% of their total giving to the same groups.
Priday concludes: “At least in terms of shares of their income that they give away, we have found that the rich are at least as generous as the poor.”
Indeed, it is all too easy to look at another person’s station in life and claim that they can give more. In reality, greed and generosity are all a matter of the condition of the heart.
Photo by Anastase Maragos on Unsplash
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Published May 20, 2020
Topics: Giving Trends