There is a common belief, especially in conservative circles, that billionaires must have worked very hard to make their money.
I think this belief is based on several factors:
An assumption that individuals have greater control over their incomes, choices and work/life balance than factors such as chance, their parents’ income, systemic issues like discrimination, or the overall political landscape.
The average person mostly has contacts and friends with other people in the same social / economic class. To the extent that societal forces impact everyone in such a group equally, the average person lacks direct experience of the differences in wealth that can be driven by such forces. Instead, they only see the differences within a group - i.e. within a small, similarly-situated group of people, the average person sees that the smarter, harder-working people tend to have higher incomes. They then intuitively and incorrectly extend this observation to people who have very different life situations, and who have very different incomes.
Mores concerning income that make people hesitant to discuss salaries with their friends & family, and thus less likely to be aware of unfair salaries. By limiting the information available to workers, these social and workplace rules make it harder for individuals to assess the degree of income inequality at their workplace, and harder to expose and counterbalance unfair labor practices. This contributes to perpetuating stereotypes and provides an avenue for employers to save money by underpaying some workers. In many cases, such workplace rules are illegal, but the laws against those rules are enforced less often than the rules themselves.
Propaganda specifically built to increase popular support for tax policies that favor the wealthy. This propaganda itself builds on and emphasizes assumptions that what is good for the wealthy is also good for the working class; that with hard work, someone who is not wealthy today may become wealthy eventually - and thus is helping their future selves by supporting the wealthy today, and that wealthy people know money well and thus will use that knowledge for the good of the people, rather than further enriching themselves.
Individuals may also underestimate the negative impact of income inequality on society, while overestimating economic mobility.
Today, I’m undermining the idea that billionaires work hard enough to “deserve” the immense privileges their wealth provides.
Money and the economic infrastructure serve an important societal function: Allocating resources to those who need them and rewarding those who use such resources to better society as a whole. Insofar as government is charged with improving society as a whole, it should find ways to help its citizens - individually and collectively - without overburdening the economy.
How many people could be fed and housed off the tax breaks Elon Musk got this summer? Why doesn't he have to work?
India Times estimates $3.1 trillion dollars in tax cuts for the 10 wealthiest Americans over the next decade. Assume Musk gets 1% of that per year: $31 billon. The median cost of living in the US is around $61,334 / year. So the Republican-led Congress and Trump gave Musk a gift worth keeping 505,429 people afloat.
The assertion that Musk works for that money is equivalent to saying his IQ is 10,000 times higher than the average American’s, and that he works 5 times as many hours per day, and that he works ten times harder. If he doesn't do all of those, he doesn't work hard enough to deserve that kind of money - which is just the tax cut for an average member of the 10 wealthiest Americans.
Even if he didn't get that tax break, he would have far more money than you and your 100 closest friends will earn in their entire lifetimes. The interest alone on his ridiculous fortune could keep him fed and housed in luxury, in perpetuity.
If you're trying to save the government money, tax the people who actually have it. The folks making basically minimum wage under the table aren't numerous enough or rich enough to matter to the federal budget. And for the most part, they're still just getting by.
There is no moral or ethical argument to justify the existing wealth inequality. But too many people think they're closer to the wealthy end of the spectrum, so the inequality persists. The vast majority of them are closer to poverty than to Musk-scale wealth. Millionaires are closer to poverty than to being billionaires. People don’t realize that in part because orders of magnitude are hard to imagine.
There are other arguments for lowering taxes on the ultra wealthy, and I have disputed some of them in previous posts: There’s an unfounded fear that taxing the wealthy and using the revenue to help the poor will hurt the economy. The opposite is true. Also, there’s a belief that keeping the government uninvolved with the economy will always unleash pure capitalism and maximize growth, to the benefit of all. This ignores the ability of large corporations & wealthy individuals to control the laissez-faire government & shape the economy to their own benefit. Without a strong government, responsive to the people, to enforce a rough political parity between individuals, and to keep inhumanly powerful corporations in check, the economic system will trend toward oligarchy and plutocracy, remaining “a capitalist republic” in name only.
The myth that billionaires had to work hard for their money only serves the interests of those billionaires, not the interests of the people as a whole.