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Jun 15 2009, 10:40 am
What's the Matter With Rich Liberals?
Nancy Folbre hits on one of my favorite rejoinders to the annoying, if fading, liberal yawner that Democrats lost so many elections because millions of heartland Americans voted Republican against their self-interest. This argument, which received its most public treatment in Thomas Franks' "What's the Matter with Kansas?" posits that Republicans learned to make the class war about values instead of economics and tricked millions of poor, poor Americans into voting against their economic self-interest.
But as Folbre rightly notes, this is a very silly argument because "the most visible support for raising taxes on the rich comes from ... the rich," like the chief executive of Netflix begging the president to raise the highest income tax bracket to 50 percent. Raise my taxes! is another pretty bizarre strain of economic self-interest. Maybe we should ask: What's the matter with America?
Folbre goes on to chronicle other tax follies like this one: "The progressive group Citizens for Tax Justice observes that the percentage of households with income under $30,000 complaining that federal income taxes are too high exceeds the percentage even paying federal income taxes." That's funny, but I don't have a huge problem with it. Taxes aren't just about money, they're also about values, and my main beef is with the idea that there is something quaint and pejorative about being a values voter.
Rich liberals, like the Netflix bossman, who are willing to vote against their own short-term economic interest - ie, take a tax hike - do so in the hopes that the government will do some good with the extra dough. The belief that higher government spending will benefit, say, education might be based on some statistical survey out there (it certainly doesn't come from any study of D.C. schools!) but it is still just that: a belief. The rich liberals pooh-poohing Kansas are really not all that different from the objects of their disdain: both groups technically vote against their short economic self-interest in the hope that their party will apply the policies they value.
That doesn't sound so bad, but we still hear whispers foretelling of the rational voter, truly a fantastical creature. There's really only one way to be sure you're voting "rationally" - I guess that would mean something like assessing hard, universal facts in an exclusive and thorough manner - and by Frank's definition, I suppose it would mean choosing the party that is offering the most money. First, that's impossibly tricky (what nets more, a tax cut or health care reform?). Second, that sounds pretty much like bribery, which has to place below values-voting, right?
So embrace it and love it, people. We are all values voters. Sure, we take in new information and ideally refine our understanding of the world, but like the fermenting of wine, the distillation of the facts will always carry the taste of the barrel.
But as Folbre rightly notes, this is a very silly argument because "the most visible support for raising taxes on the rich comes from ... the rich," like the chief executive of Netflix begging the president to raise the highest income tax bracket to 50 percent. Raise my taxes! is another pretty bizarre strain of economic self-interest. Maybe we should ask: What's the matter with America?
Folbre goes on to chronicle other tax follies like this one: "The progressive group Citizens for Tax Justice observes that the percentage of households with income under $30,000 complaining that federal income taxes are too high exceeds the percentage even paying federal income taxes." That's funny, but I don't have a huge problem with it. Taxes aren't just about money, they're also about values, and my main beef is with the idea that there is something quaint and pejorative about being a values voter.
Rich liberals, like the Netflix bossman, who are willing to vote against their own short-term economic interest - ie, take a tax hike - do so in the hopes that the government will do some good with the extra dough. The belief that higher government spending will benefit, say, education might be based on some statistical survey out there (it certainly doesn't come from any study of D.C. schools!) but it is still just that: a belief. The rich liberals pooh-poohing Kansas are really not all that different from the objects of their disdain: both groups technically vote against their short economic self-interest in the hope that their party will apply the policies they value.
That doesn't sound so bad, but we still hear whispers foretelling of the rational voter, truly a fantastical creature. There's really only one way to be sure you're voting "rationally" - I guess that would mean something like assessing hard, universal facts in an exclusive and thorough manner - and by Frank's definition, I suppose it would mean choosing the party that is offering the most money. First, that's impossibly tricky (what nets more, a tax cut or health care reform?). Second, that sounds pretty much like bribery, which has to place below values-voting, right?
So embrace it and love it, people. We are all values voters. Sure, we take in new information and ideally refine our understanding of the world, but like the fermenting of wine, the distillation of the facts will always carry the taste of the barrel.










I'm pretty sure "we" are mostly just sheep voters. I know very, very few people who have ever made the effort to understand a candidates complete platform, voting record, etc, etc. Perhaps we're "values" voters, but its usually one or two (maybe three) hotbutton issues that swing most people's vote one way or another.
Generally, it just means "free of systematic bias" in social science of this ilk. Means-ends rationality in voters is in principle analyzable in isolation from self-interest in voters. Bryan Caplan's thesis on the subject is that they are neither.
Rich liberals believe the government will spend the money better and make better decisions than the poor.
Really that simple.
Poor people see the government programs first hand and yet they have the "nerve" to think they can do better.
The tax code does little to encourage rational choices. It's complex, confusing and designed to create asymmetric information. Has the Alternative Minimum Tax been simplified so everyone understands it and knows if it applies to them? What percent of Americans even know the AMT exists?
I also think the vast majority of people think "income tax" when considering taxes and completely ignore payroll taxes - far more regressive taxes. 2009's Social Security wage base is $107k. Salary above that has a lower effective tax rate.
http://en.wikipedia.org/wiki/Social_Security_Wage_Base
Agree with mdb002 too.
As a rich liberal myself, I'd suggest the rich liberals are responding rationally. While you may choose to ignore it, rich liberals probably look at places like California, where fixing property taxes at low rates has resulted in collapsing educational standards and now a collapsing state government. These problems are a drag on rich liberal business.
It is rational to conclude that while it may be painful in the short run to pay more taxes, you stay richer in the long run when society taxes itself sufficiently to pay for basic services such as education. It is easier to stay rich if your workers are competent and educated. It is easier to get rich if you do not have to pay for education yourself. I as a rich liberal should therefore want my taxes to be somewhat higher to preserve a significantly easier and higher standard of living for the long run. I as a rich liberal should also want to raise school taxes to spread the cost of educating my kids across as many people as possible.
In the even longer run, rich people should really want to make sure that society is well taken care of. Stable societies allow you to stay rich because no one declares a revolution and forces you to flee. It is no accident that rich South Americans live in Miami. They have learned the hard way that poor societies with little infrastructure tend to take from the rich during chaos. The US has provided stability that makes it less likely that you or anyone else will lose everything to an angry mob. If you want a counter example consider the Russian revolution. There the rich chose not to tax themselves and the result was getting shot. This is a fundamental lesson that rich conservatives have apparently missed. I wonder how many might have chosen taxes in hindsight.
Rich conservatives are voting against there own interest, or at least that of their children. Cutting taxes and reducing services may make life more fun today, but it may also lead to significantly higher costs for business in the future, a tougher life, and ultimately threaten instability. Therefore, it makes sense to pay higher taxes and keep life good and easy for the masses.
It may be "rational", but it is more ignorance. Since you cite collapsing property tax revenue, I assume you can produce figures showing a decline in revenue, I will stipulate that it would have to be a decline after adjusting for inflation and population growth. Similarly, can you show any evidence that the education budget has declined? Or is spending more money the cause of the collapsing education standards?
California has spending problem, not a tax problem.
mdb002, I said collapsing educational standards, not decline in revenue.
I will freely concede that the education budget is higher. The state is also bigger. However California spends less per pupil relative to the rest of the country today than the state did before prop 13, whihc is what really counts. Here is the evidence:
http://www.cbp.org/pdfs/2007/070926_how_does_ca_compare.pdf
Spending problem and tax problem are two sides of the same coin.
And what is more ignorance? That I prefer to live in a country where the infrastructure is maintained and we have minimal levels of education? I live about a mile from the bridge that recently collapsed in Minneapolis. I am perfectly willing to pay more to make sure our infrastructure does not crumble. I assume you will be willing to pay for the ferry across the river when it is needed.
Standards have nothing to do with taxes. You can have high taxes and low standards and any combination of the 2. Standards also have nothing to do with achievement, you can have any combination of the 2. Money spent and achievement are also similarly linked. The fact is California is taxing and spending more now then it did when Prop 13 passed, and the results are worse, and the standards are lower.
California raised spending to unsustainable levels during the good times, with nary a care in the world. It did not require residents to pay for the services, because they had the money NOW. If people had to pay for them when they passed, they probably would not have been popular. Unfortunately, times aren't so good and they are in trouble. If they spent responsibly there would be no tax problem. Taxing and spending problems are not the same thing.
If California is taking in more tax revenue and obviously has different spending priorities than you do, I think the question is, why do you want to give them even more money to waste?
Do you take the standard deduction on your income taxes?
Do you just lump all your earnings into fully taxed income rather than take the favored taxes for certain classes of income?
Do you add 10% to your taxes when you send them in?
Since you're "rich" have you used any "estate planning", which only lowers the estate taxes.
Who owns your car? What deductions do you take for its use if you own it? If a corporation, is the corporation deducting that as an expense?
Do you use an accountant to prepare your taxes? If so, why? The only reason is to make sure you pay less.
When I hear "rich liberal" the term "rich hypocrite" always comes to mind.
I'm hardly hypocritical. I am happy to vote in such a way that my taxes are raised. I may not be happy with my tax bill, but neither am I happy about eating a healthy diet. Both, however, are likely to be good for me in the long run.
So, I believe that in the long run we all will be better off with somewhat higher taxes. That is a "we" however, which requires everyone to be willing to pay to get the benefit. In the absence of collective action, however, I choose to protect myself. That means minimizing my taxes today. Both of these positions and actions make sense and are rational.
But hey, if you want lower taxes you can always move to Somalia.
I'm also relatively young. I want taxes higher today to close the gap in entitlement spending before all the tubby baby boomers retire and demand their subsidized viagra and heart medication.
I'm sure all the tubby baby boomers want to keep taxes low and shift the burden to the future so I can pay it when they are retired and alternating between the golf course and dialysis machine. All I know is one way or another my taxes are gonna be higher. The question is a little higher today or much, much higher tomorrow. I prefer today.
Agreed on all points, patmidd. Does the public sector waste a lot of money? No doubt. But anyone who's worked for a major corporation -- particularly as a peon -- knows that the private sector does, too. And as hard as it is for the average person to get government to be accountable for its wastefulness, it's exponentially harder to get that from a recalcitrant private business.
The rich have ways to escape taxes not generally available to the middle and lower incomes.
What percentage do they get from capital gains and dividends? Perhaps they would feel differently if they were taxed as ordinary income, including interest on savings accounts.
Maybe, if they got to pay 15.7% of every penny they made, including ALL income. into Social Security, they might feel differently.
What if trusts to avoid inheritance taxes were outlawed? I wonder how the Kennedys would like that?
Wow this has to be a very silly argument. I don't vote for higher taxes but I will vote for higher taxes if I have a say in what it is spent on. Currently the federal goverment spends 21% on defense alot of that is wasted and inefficent. However neither Republican don't seem to mind this huge waste of tax payer dollars. If there is a discussion of goverment waste and inefficent it should probably start with the Pentagon. Policing the world is a noble goal, but helping someone with healthcare or welfare is wrong.