Study Finds a Strange Paradox When It Comes to How We Feel About Taxing Billionaires

New psychology research has shown that most people don't want to tax billionaires as a whole, but believe they have the right to their hard-earned wealth as individuals. This paradox seems to reveal something about our ability to relate to individuals more easily than to groups.
These findings show that we are less likely to be concerned about the inequalities of wealth when they are presented in more personal terms.

Instead, we believe that a billionaire is worthy of their success and are less inclined to support redistribution. Sometimes, however, billionaires are often more desirable than the wealthy as a whole.

It seems that humans are more accepting of others in the system then of the system.

Jesse Walker, a researcher at Ohio State University on consumer behavior, says, "When there are this group of people at or near the top, that is unfair. We wonder how luck and the economic system might have played a part in how they got all the money."

"But if we look at one person at a top, we tend think that they are talented and hard-working and more deserving than all the money they make."

Research has shown that people attribute success and failures to their inner traits and aspirations more than to the collective outcomes of a group.

The 1 percent who have made it to the top of the wealthiest people in the world are more likely to be regarded as hard-working and talented than the rest.

This tendency is likely to drive some of the results in the current paper. It also drives what psychologists call the "streaking stars effect", which means that people are more inspired when they see success individually than collectively.

These findings are based on eight studies that each involved 600 participants. More than 200 participants were asked to call the study on appropriate compensation for CEOs.

The data on the CEO salaries of 350 of America's largest companies was presented to half of the group. It showed how the salaries have risen from 48 percent of the average worker's income in 1995, to 372 times today.

Half of the other read about a company whose CEO saw his salary increase to the same extent in the same time frame.

The first group of respondents agreed that the average US CEO was making more than the average employee. However, the second group of respondents believed that the CEO should make more than the average employee.

These findings show that the way billionaires are referred to as individuals and billionaires collectively has an impact on our perceptions of their wealth and whether they should be taxed more.

A second study was done to explore the idea further. 400 respondents were shown a Forbes magazine cover. Half of the respondents saw seven billionaires on Forbes' cover, while the other half only saw one billionaire.

The cover was then described briefly by each group. They were then asked to write about their opinions and how they felt about the riches of these people.

Participants believe that an individual's wealth is fairer and more deserved than the overall 1 percent.

Walker says that people in the study were more upset by the wealth of seven individuals on one cover than by any individual pictured separately.

It was even more striking that those who saw all seven billionaires were more likely than those who only thought about one rich person to support an inheritance tax.

This trend indicates that the way we present the issue can have an impact on how people think about policy. Researchers conducted a third study to see if that is true.

Participants were given the story of a Bollywood actor who was born into a prominent family with connections to the industry. The family privilege was shared with one-half of the group and the other not.

People were more open to a higher wealth tax only when they were shown the systemic factors that enabled the Bollywood billionaire's success in the first instance.

According to Thomas Gilovich, a psychologist at Cornell University, "If you want the system to change," "You have to get people to think in systemic terms."

This is not always possible in narrative-based journalism where the individual's story is often the focus of discussion.

These articles are more likely to focus on personal stories than wider issues. This individual focus on billionaires could lead to a weakening of policies that aim to reduce wealth inequalities among readers, as is the case with other billionaires.

According to the study's authors, this is why terms such as "the 1 percent" and "the super-wealthy are so effective in generating protest. These phrases encourage people to consider unfair advantages within the system.

Gilovich explains that when you think about "the wealthy" or "the 1 percent", your mind tends to gravitate towards situational attributions more easily.

"When you think about the system as rigged and the privileges they enjoy, it's much easier to support an inheritance tax to address growing income inequality.

The study was published by PNAS.