This article was originally published by Lipton Matthews at The Mises Institute.
Criticisms of pro-market policies, such as lower corporate taxes and deregulation, are often rooted in a form of discrimination rarely acknowledged: upward classism. This prejudice against people of higher socio-economic status misrepresents the contributions of “the rich” and distorts discussions about public policy. While these policies are castigated as benefiting the wealthy, they have demonstrable benefits for broader economic growth and living standards.
For example, research by Suárez Serrato and Zidar—“Who Benefits from State Corporate Tax Cuts?”—reveals that reducing corporate taxes encourages business expansion, resulting in job creation and improved local economies. Similarly, Gordon and Young, in another paper, emphasize that efficient tax systems, including lower corporate rates, are essential for sustaining long-term economic growth. Far from being self-serving, pro-market policies are foundational to fostering an environment in which businesses and, by extension, workers and consumers, can thrive.
Nevertheless, critics berate pro-growth tax policies for favoring “rich people” on the basis that they are not paying their “fair share” in taxes, yet the evidence suggests otherwise. Between 2001 and 2020, the share of federal income tax paid by the wealthiest Americans rose from 33.2 percent to 42.3 percent, while the bottom 50 percent of taxpayers saw their share decline from 4.9 percent to 2.3 percent. Additionally, the bottom 20 percent of earners have negative tax rates—receiving more in government benefits than they pay in taxes. This dynamic underscores the disproportionate role that wealthy individuals play in funding public services, challenging the narrative that they exploit the system. Without their contributions, governments would struggle to sustain programs aimed at supporting poorer Americans.
Another popular narrative is that wealthy individuals are parasitic rent-seekers who extract value without contributing to the economy. However, in the United States—where only about 1 percent of billionaires can be described as crony capitalists—this depiction is far from accurate. Most affluent individuals create wealth through innovation and entrepreneurship, enriching consumers by providing goods and services. Moreover, contrary to stereotypes of idleness, wealthier Americans tend to work longer hours than their poorer counterparts, reflecting a shift from the leisure-centric culture of 18th-century aristocrats to one where work conveys social status.
Indeed, the issue of upward classism is not limited to the United States but is also evident in other countries, such as Jamaica. In this context, public discourse often reveals a stark inconsistency in attitudes toward policies that benefit different socio-economic groups. For example, the National Housing Trust (NHT)—a financial institution funded by mandatory contributions from Jamaican workers—recently offered a $3.5 million grant exclusively to low-income earners. This policy was widely celebrated even though the NHT is not a charitable organization but a financial entity meant to serve all contributors equally.
Contrast this with the criticism directed at the Jamaican government’s decision to remove the General Consumption Tax (GCT) from electricity. Critics argued that this measure disproportionately benefited wealthier households and small businesses, as many residential customers do not pay GCT on electricity. These contrasting reactions highlight a troubling double standard: policies favoring the poor are applauded, while those that alleviate burdens for wealthier groups are condemned. If the aim of government policy is to ease economic hardships, such efforts should be inclusive rather than selectively targeting specific groups.
Further, while pro-market policies are often criticized for allegedly favoring the rich, welfare programs are lauded for supporting the poor. However, these programs have significant limitations. Research by Alexander Bartik and co-authors demonstrates that while cash transfers boost immediate consumption, they fail to enhance recipients’ long-term prospects. Other analyses show that they decrease labor market participation and do not have a considerable effect on human capital investments. These findings highlight the risk of creating dependency rather than empowerment, perpetuating the very poverty these programs aim to alleviate. This pity-driven approach obscures the role individuals can play in escaping poverty and undermines the dignity of personal achievement. Effective anti-poverty strategies should focus on fostering self-sufficiency rather than perpetuating dependency.
The pervasive upward classism that informs criticisms of free market policies not only misrepresents the contributions of the wealthy but also perpetuates harmful stereotypes. Governments must design policies that promote economic growth without discriminating against any group, whether rich or poor. Addressing crony capitalism and wasteful welfare programs should go hand-in-hand with ensuring fairness in public policy.
By dismantling class-based biases, societies can foster a more equitable economic landscape that benefits everyone. The focus should shift from vilifying success to creating opportunities that enable individuals at all income levels to thrive.
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