Once upon a time, there was a neighborhood of 100 homes that had been built up over many years. All of the residents worked hard and as the years passed, some of the families did better than others. The result was that after many decades, some of the homes were still small and humble, some had been upgraded and had wings added to them, and there were even a few stately homes that had been rebuilt from the ground up, on the property where a smaller home used to stand.
After a few years of growth, the residents all got together and decided to create a homeowners’ association, to maintain the parks, medians and other public spaces. After some discussion about fees for this association, it was suggested that the fees should be based on the value of each home and that each resident should pay $1.00 per month, per $10,000 valuation of his home. The residents in a $20,000 home would pay $2.00 per month, while the residents in a $200,000 home would pay $20.00, and the residents in a million dollar home would pay $100. Even the wealthier residents thought that this was an equitable solution and so it was agreed.
But as the years passed, more and more of the residents stopped working, until half of the homes were occupied by those who didn’t work at all. Some had retired and lived on their retirement savings and Social Security insurance. But most of those who didn’t work, were living on some sort of government assistance that they had not paid into. You could easily tell the difference between the homes of the retirees and the homes of those who just stopped working. The retirees kept their yards and homes up, while the yards of those who just didn’t want to work were always overgrown, the shutters needed painting, and the homes were always in disrepair.
Eventually, some of the residents, led by those who chose not to work, pointed out that the park in a neighborhood a few miles away had a swing set and see-saws and that such equipment should be installed in their park, too. But the association told the residents that because their fees were so low, the association didn’t have enough money to afford such equipment. So the slackers suggested that the association raise the fees on the wealthier residents, since the wealthy could afford to pay more. After some discussion, it was agreed and the fees for the wealthier residents were raised. While the poor still paid $1.00 per month, per $10,000 valuation of their home, the wealthier residents were required to pay $1.50. The association saw their revenues increase dramatically.
But no sooner than the swings and see-saws were installed, the slacker residents went back to the association, noting that other neighborhoods had basketball goals and running paths and they demanded that such amenities be installed in their neighborhood. Once again, the association told them that they didn’t have the money for such upgrades. But the slackers persisted, claiming that the association was being unfair to them and pressed the association to further raise the fees on the wealthier residents. Then, while they were at it, the slackers whined some more, saying that that the fees for the half of the residents that didn’t work should be cut to nothing, since such fees hurt them disproportionately. After a lengthy discussion, the association agreed. Association fees for the wealthier residents were raised to $2.00 per $10,000 valuation of their home (double the original rate) and the poorest half saw their fees completely eliminated. Again the association saw their revenues increase, though not as much as before. But nobody thought much of the difference.
Contractors were hired and installation of the basketball goals and running paths began. But before the installation was complete, the slackers went back to the association, noting that some neighborhoods had swimming pools and demanded that their neighborhood park should have a pool installed. But as before, the association told the slackers that they had no money for the pool. However the slackers, now feeling “entitled,” demanded that the fees for the wealthier residents must be raised even more.
But this time, some of the wealthy residents complained that, while they were perfectly content to pay proportionately more, according to the value of their homes, as they had originally, they were now paying more than double their share, based on that valuation and that just five residents were carrying more than half the load for the neighborhood.
However, the slackers would have none of it. They began calling the wealthier residents vile names and demanded that the wealthy pay even higher fees, so they could have their pool. They also demanded that the association arrange for the lawn service that maintained the medians and parks, to maintain the yards of the residents who chose not to work or contribute to the association fund. But this time, the association stood firm. They told the slackers that it wasn’t practical to raise the fees of the wealthier residents, who were already paying double their share.
But the slackers weren’t about to let their gravy train be interrupted. So when the next election of the association board came around, they elected enough of their own to take control of the board. Also, several slackers decided to “occupy” the street in front of the homes of the wealthier residents and camped out in front of them. Eventually, the new board raised the fees on the wealthier residents, the pool installation began and the association also began upkeep of the yards of the half of residents who chose not to work.
Then suddenly, without notice, construction of the pool came to a halt and even the illegal aliens, whom the new association board had hired to maintain the lawns and public spaces, stopped coming. As it turned out, the contractors and lawn crews were not being paid, because the association had run out of money.
The slackers were furious. They told the association that they were “entitled” to a pool and having their yards kept up by the association and that fees for the wealthier residents must be raised again. The association board agreed. But they also told them that they had already raised the fees for the wealthy twice since the pool installation was approved and even so, their collections had been dropping dramatically. They attributed the drop in revenue to a recent dramatic decline in property values.
So the slackers began shouting obscenities about the wealthy, claiming that the wealthy were manipulating property values, to get out of giving them the benefits, to which they felt entitled. So the slackers and their association leaders all headed over to the homes of the wealthiest of residents, carrying signs and banners, vowing to make the wealthy pay the overdue association bills.
But when they arrived at the big homes, they found out why property values had been dropping so fast and why the association collections were down so much. The wealthy residents had all sold their homes and moved to another neighborhood. But worse, since other wealthy people didn’t want to move into a neighborhood where they were not appreciated, the wealthy were forced to sell their homes for much less than they were worth, to poor families. This of course, drove property values down for the whole neighborhood.
But the worst was yet to come. As the dejected slackers walked sadly back to their homes, they noticed that more than a few other of the productive residents had already moved as well and even more had begun putting their homes up for sale.
By vilifying the wealthy residents and demanding that the wealthy residents pay for everything through disproportionately high association fees, while non-productive residents paid nothing, the little neighborhood had driven out the residents whose generosity had funded the neighborhood’s beautification from the beginning and the neighborhood was left with nothing.
The pool sat mostly empty – only occasionally containing some rancid rain water. The park was soon overgrown and became a gathering place for drug dealers. The grass on all of the medians and public spaces died from lack of water, because the association couldn’t pay their water bill. And even all of the upper-middle class residents and many of the middle class residents eventually moved out. Because of the greed of the slackers, the area that had once been a proud “neighborhood” had earned a new title… “Slum.”
As a result of seven studies, a 2008 Zogby International report concluded that more than three million Americans relocate offshore every year. How many of them do you think are poor? How many of them do you think like being vilified for their success. How many do you think left because they were tired of being financially and verbally abused?
Ask yourself this question.
“If I had enough money that I could afford to live anywhere, would I be willing to live where I’m constantly vilified and punished for my success or would I move to a place where the jobs I provide and my generosity are appreciated, and I’m not expected to pay to support deadbeats?”
Think about it…
The answer will tell you why “Soak the Rich” will never work.