Ironic left this comment on yesterday’s post on the rich being chased out of the Capital District’s cities:
A more accurate representation would be forcing the slave-owner to live on the slave plantation THAT HE OWNS.
And I think that is a SWELL idea. They too should enjoy the Good Times their immigration, welfare, and economic policies inflict on everyone else.
That would fix the problem right fast.
Oh, and their children should go to the same public schools they inflict on everyone else to.
The problem with Ironic’s statement is that it assumes that the rich people who are being most impacted by high urban taxes are the same ones who support left-wing economic policies. Wrong. For the past few years, the affluent have become politically bifurcated based on their level of wealth. Wall Street Journal blogger Robert Frank has spearheaded the reporting on this, writing last year:
In Richistan, I wrote about a new political divide emerging among the wealthy. While most Lower Richistani’s ($1 million to $10 million in net worth) were voting Republican, most Middle-and Upper Richistanis (those worth $10 million plus and $100 million plus) were voting Democrat.
Lower Richistanis tended to vote almost exclusively based on taxes. But Upper Richistanis placed a higher priority on longer-term societal issues like health care, the environment and education, which are traditional Democrat issues. Some say Upper Richistanis can afford to minimize taxes, since they have plenty of money even after the government takes its share. Others say the ultra-rich have better tax attorneys so they don’t care as much about tax rates.
Frank’s findings were backed up by a political survey:
More than three quarters of those worth $1 million to $10 million plan to vote for Sen. McCain. Only 15% plan to vote for Sen. Obama (the rest are undecided). Of those worth more than $30 million, two-thirds support Sen. Obama, while one third support Sen. McCain.
Among Lower Richistani’s, 88% cited tax policies as being “important†in making their decision. Only 11% cited the environment, 22% cited health care and 45% cited social issues.
Among the Upper Richistani’s supporting Sen. Obama, tax policies ranked last, with only 16% citing them as important. “Social issues†ranked first, with “policies dealing with wars†ranking second (67%) and Supreme Court nominations and health-care issues ranking next.
Additionally, in his review of Red State, Blue State, Rich State, Poor State: Why Americans Vote the Way They Do, Razib Khan noted both that while the rich tend to be more Republican than the poor, in wealthier states the rich are barely more Republican than the poor:
In short, as you can see, the rich in Connecticut, the wealthiest state per capita, are not much more Republican than the poor. In contrast, the rich in Mississippi, the poorest state, are much more Republican than the poor. Ohio, a middle income state, is somewhere in the middle. What Gelman et al. are showing here is that looking just at states removes critical information; class is a much better predictor of political orientation in poor states than it is in rich states. It isn’t that rich states are blue because they are rich, it is that in rich states income doesn’t matter much in relation to politics.
In blue states the wealthier counties tend to be more blue (though within these counties the rich may still be more Republican; you can see this in Manhattan where the only precincts where Republicans attain parity with Democrats are in the wealthiest neighborhoods of the Upper East Side).
Finally, another analysis from the Red State, Blue State, Rich State, Poor State blog (hat tip: Half Sigma) lends further credence to Frank’s observations:
Both Khan’s and the RSBSRSPS blog’s analyses support the idea of an expanding political gap between the merely wealthy and the ultra-wealthy. Going back to the article I fisked yesterday, the evidence is strong that it is the merely wealthy that are being hurt by urban wealth redistribution:
The Capital Region is a solidly middle-class place. The big employers — government, education and health care — provide a nice living, but make few people rich.
The census bureau estimates that 7.8 percent of households in the Albany-Schenectady-Troy metropolitan area have annual income above $150,000, while 28.2 percent are below $35,000.
Recent census estimates, combining statistics from 2006 to 2008, don’t include breakdowns for the area’s suburban towns, but close-in suburbs likely have far higher levels of wealth — as the overall metropolitan area statistic includes many lower-income cities and rural areas like Schoharie County or eastern Rensselaer County.
The data say in the city of Albany, just 3.6 percent of households — half the metropolitan rate — have income above $150,000. In Troy, it’s 2.6 percent.
Basically, the high taxation that sustains the governmental apparatus of cities like Albany, Schenectady, and Troy hurts the rich people who DIDN’T and don’t support it, while leaving unscathed the folks who do. If you’re egging on their demise, you’re opposing the wrong people.
There’s a really hilarious joke in all of this. For the past eight years, liberals whinged, whined, and beat their chests about how that evil George W. Bush was robbing the poor to give to the rich and enrich his already-wealthy compadres. The gap between the rich and poor has indeed increased in the past decade, but the primary political beneficiaries have not been the Republicans, but the Democrats. Essentially, the very trend that liberals decry is the same one that enabled their electoral success in 2006 and 2008. Now that’s comedy.
{ 15 comments… read them below or add one }
I would hazard to guess that the vast majority of the “ultra-wealthy” are not entrepreneurs either. They’re “landed gentry” (ie, got their wealthy from mumsy and daddykins who got theirs from their parents, etc.), they’re stock market gamblers (aka Wall Street) or corporate pirates (aka most executives).
I have nothing against the stock market, personally, but as far as “moral arguments” go with taxing wealth, taxing stock market earnings is morally equivalent to a sin tax on horse racing. There is virtually no difference between betting on horses or dogs and betting on companies. As far as “taxing the productive, hard-working” blah blah blah rhetoric goes, taxing people who make their money almost exclusively on shifting it between stocks is not even in the same universe as heavily taxing someone who runs a successful small business.
I don’t see why the logic of Ironic’s statement couldn’t be applied to the super-rich as well as the “merely rich”. Let’s make Soros use government health care and no other form of health care. Let’s put Section 8 housing in whatever buildings or estates Soros owns. Let’s make Soros’s grandchildren attend public schools.
You may say, I’m a dreamer, but I’m not the only one…
taxing stock market earnings is morally equivalent to a sin tax on horse racing. There is virtually no difference between betting on horses or dogs and betting on companies. As far as “taxing the productive, hard-working†blah blah blah rhetoric goes, taxing people who make their money almost exclusively on shifting it between stocks is not even in the same universe as heavily taxing someone who runs a successful small business.
Rubbish. Most people who are in the stock market are not day traders looking for a quick killing, they are people trying to save for retirement (which they have to do, since companies don’t offer pensions any more and government retirement benefits can’t be relied on). Yes, many stock-based retirement plans are tax exempt, but they still rise or fall with the rest of the stock market. If you tax gains on stocks, you are discouraging saving and making it harder for people to retire. That is bad policy as well as immoral.
There is zero moral difference between the government taxing a business and the government taxing stocks. Stealing is stealing, period. The government took no risk, the government did no work, so the government deserves none of the gain.
As long as the transaction was ethical and legal, it doesn’t matter if it seems like “paper shifting” to those who can’t understand its importance. All investments are a gamble of sorts, from small to large, from more technical and abstract to the more familiar and concrete. All function according to the same logic of risk vs reward. The financial industry and the exchanges are the machinery of capitalism. Unneccessarily or arbitrarily burdening or punishing such activity only serves to cripple the economy. This is why only reasonable and neccessary taxation and regulation makes sense.
But not all of them are gambling in the pejorative sense.
I have nothing against gambling. I just find it extremely hard to make a high-minded “moral case” for defending a gambler from paying taxes on their profits since gamblers don’t produce goods or provide services that produce wealth.
Call me a statist, but my outrage over taxation is limited to the taxation of wages, unnecessary excise taxes and investment into actual wealth producing activities (such as angel investors).
In an ideal world, every voter would personally pay for the externalities and the costs of the policies they support.
I remember reading a description of the ultra rich (those with more than $10 million) as having ‘f*ck you’ money and that’s why they vote liberal. They know they can use all sorts of loopholes to never pay higher taxes.
The disillusionment with Obama continues.. this time from the moderates.
http://dissention.wordpress.com/2009/12/15/linkfest-december-15-2009/ (The disillusionment with Obama continues..)
Mike T – to me your argument sounds like someone arguing that the engine of the car is important, but that the transmission is not. the financial industry/exchanges and the frenetic technical activity within function much like the oil and the transmission and the fuel injection, filtering and sorting resources accordingly, and like a nerve network, allowing an intelligence to work and evolve. iow, it is crucial to the capitalist system, and crippling it unneccesarily hurts economic growth and wealth creation for the system overall. im not arguing against sensible/ethical taxes and regulations on these activities (im a political centrist) just that they should not be viewed as non-productive, parasitic or immoral activity – and then unneccesarily or arbitrarily regulated/punished/taxed, while other more concrete “working folk” type activity is falsely seen as more productive or moral. the fact is that all components within the capitalist system – the abstract and the technical as well as the more tangible and concrete – are essential to making the economy work and grow. iow, hurting wall street hurts main street.
gamblers don’t produce goods or provide services that produce wealth
In that case, the stock market is not gambling, since stocks provide a service (capital) that enables companies to produce wealth.
If you a stock trader you are essentially gambling. But you are, for example, gambling on someone achieving a business venture and if he doesn’t succeed you lose out but he couldn’t do the venture without your money. So you are risking your money to enable somebody else to achieve something productive.
Its obviously far more complicated than that but my point is that the market is about funding wealth creation.
Another post
http://dissention.wordpress.com/2009/12/16/escorts-are-a-better-deal-than-real-women-01/
This post kinda blows out of the water the whole “Republicans are rich” meme that petty democrats like to toss out. The “Republicans are greedy” meme would still ring true because of their, as your numbers show, heightened concern with keeping their money away from the tax-man and their minimal interest in the “social issues”that plague our disadvantaged minorities.
I suspect the source of wealth matters more than the level of wealth.
The Red State rich are likely classic bourgeois/petty bourgeois types who make their money from business and investment, while the Blue State rich are probably members of the New Class who make their money from access to the state and its rent-producing machinery.
http://en.wikipedia.org/wiki/New_class
http://en.wikipedia.org/wiki/Rent_seeking
The former group will obviously plump for less government, while the latter will favor more because more government means more money, more power, more limits on competition, and a bigger scope for them to bustle in.
The books to read are The Managerial Revolution by Burnham, The New Class by Djilas, The State by Oppenheimer, and Our Enemy The State by Nock.
If you think this is all commie-talk then read this first:
http://www.fff.org/freedom/fd0606b.asp
(BTW, it’s occured to me lately that the New Class fits neatly with the old First Estate, or Clergy, so the history of that group can prolly shed light on the behavior of the current crowd. Without an established church we never had a First Estate in this country, thankfully, but now that the welfare state controls everything including the life of the mind we seem to be creating one. Adminstrators, mandarins, clerisy; all the same thing I suspect, though with different cover stories. The old saying hints at their modus operendi: “Partout où le vent vente/ L’Abbaye de Cluny a rente.” (“Everywhere the four winds went, the Abbey of Cluny had a rent”.))