Posted by Michael Kennedy on November 17th, 2012 (All posts by Michael Kennedy)
The question about who the rich vote for is a serious one as we head for the “fiscal cliff” next year. The Republican Party has been defending the “top 2% of income groups” that Obama wants to exclude from the extension of current income tax rates. The argument is that this group, with incomes above $200,000 for individuals and above $250,000 per year for couples, includes small business owners who create most of the jobs in this country. This is probably true and the small business owners are a reliably Republican group of voters. What about the really rich ? The group whose taxes Obama wants to raise is really mostly the upper middle class. The inflation of the 1970s, and the coming inflation which will be the only result of Obama’s “budgets,” changes the income levels that determine the middle class.
Recently, there has been some discussion of the voting patterns of the “rich” and whether the Republicans are really defending Republican voters and what are the voting patterns of the rich. Bill Kristol recently wrote that the Republicans may be courting disaster by risking a trip over the fiscal cliff defending people who are not Republican voters. Data on this last election is still thin but there are a few bits of information available.
Much has been written on Digital Journal about wealthy Americans only voting for the Republicans. I realize that this perception has been bandied about in the media for decades. But is it really true?
In the blog “Election 2008: what really happened”, the author states: “As with previous Republican candidates, McCain did better among the rich than the poor.” He includes some charts that support his contention. The first chart shows that Republican vote share is very low with individuals in the lowest income groups. The Republican vote share increases dramatically as income rises. The Republican vote share peaked in the 60 to 70 thousand dollar range and then declined gradually to the 90 thousand dollar range before climbing again to 150 thousand dollars. The second chart indicates that the Republican vote share peaked again between 125 and 150 thousand dollars. After that it declined gradually as income continued to rise.
This bit of information suggests that voters with incomes above $150,000 per year are less likely to vote Republican than those with incomes below that level. There is more data here for the years up to 2010. An interesting part of this information is this.
What I found particularly interesting was that the only time the Republican vote share exceeded 50% was in relatively narrow ranges around the peaks. In 2008 the Republican vote share never exceeded 55% in any income class. The Republican vote share at the highest income level was around 47 to 48%.
Why should this be ? The highest income group, and by this I mean those with steady incomes above $250,000 per year, have other issues that influence their vote. Social issues drive a lot of the Democrat vote. Some of these issues are relatively unrelated to income. Gay marriage drives a lot of prosperous voters to vote for Democrats. I know this from my own children. Even though gays make up from 2% to 6% of the US population, the issue is one that influences many voters who do not have to worry about income. This includes many young voters whose parents make up a significant share of their income.
Hollywood and the movie industry is a prominent example of very wealthy people who are hostile to Republicans although they are well within the income levels that should influence voting patterns. In fact, they are wealthy enough to ignore economics in their voting decisions. The same applies to lawyers who have an economic interest in behavior that leads them to Democrats. Of course, the present government has a heavy participation of rent seekers who support policies, such as alternate energy sources, in the anticipation of obtaining financial benefits from the tax payers.
There are also those who, regardless of income level, have an ideological attachment to the Democrats. In this group are public employee union members, teachers (redundant I know), college professors, environmentalists who care nothing about economics and single women who may see the government as a source of support.
Why does this matter ?
Obama has run a class warfare campaign that appears to have been successful. Romney may have lost a large number of white voters who bought the argument that he is a rich man who does not care about the poor. The Republicans are now in a confrontation with Obama and the Democrats over income tax rates. Are they right to defend the tax rates of people who may not vote for them ?
To return to the above link.
A quick review of the figures presented on the Center for Responsive Politics also indicates that the perception that the wealthy prefer Republicans is not accurate for the 2009-2010 period. In their analysis they looked at donors giving more than $200 to a candidate or Political Action Committee. I believe it is reasonable to assume the wealthy were the most likely individuals to donate $200 to any candidate.
Donors giving more than $200 only to candidates gave Democrats approximately 28.3 million dollars more than they gave Republicans. The Democrats received about 6.4% than Republicans. Another interesting tidbit is the percentage of individuals donating to Democrats was higher than it was for Republicans.
As we come to the point where Democrats are determined to raise taxes on the highest 2% of the population, maybe we should be looking harder at this group. The results of the coming confrontation can be only one of three choices. Obama can give in but this is less likely. He ran his whole campaign on this issue. The Democrats could compromise but, again, Obama and they ran on this issue. The Republicans could stand firm and take us over the cliff. Or the Republicans could agree to the tax increases. We know that the tax increase will have no significant effect on the deficit. There has been talk of a “deal” with some amount of spending cuts in return for the tax increase.
It may be time to try to cut a reasonable deal if one is possible.
Mona Charen has a suggestion.
Conservatives and Republicans object to tax increases not because they favor the rich, but because they believe strongly that the government already spends way too much. The election has settled the issue, for now, in Obama’s favor. Republicans who still hold national power in the House might want to consider one idea that will help their image and expose Obama’s deception in a single blow — agree to raise taxes only on the truly rich, those earning more than $5 million annually. That’s a tax that will be shouldered almost entirely by Obama donors and supporters — those insulated from the real economy.
Sounds reasonable to me.